Shaw & Anor v Logue [2014] EWHC 5 (Admin)

Case No CO/2456/2013

[2014] EWHC 5 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 13 th January 2014

Before

MR JUSTICE JAY

Between

ANDREW WILLIAM SHAWAppellants

CRAIG STEPHEN TURNBULLAppellant

GEOFFREY COLLINS LOGUERespondent

Timothy Dutton QC and Craig Ulyatt (instructed by Mayer Brown) for Appellants

John Wardell QC and Andrew Mold (instructed by RadcliffesLeBrasseur) for Respondent

Hearing Hearing dates: 10 th, 11 th, 12 th and 13 th December 2013; 13 th January 2014

Judgment

[1]This is an appeal brought as of right under section 49 of the Solicitors Act 1974 against an Order of the Solicitors Disciplinary Tribunal (“the SDT”) given on 14th February 2013 striking the two Appellants off the Roll of Solicitors. The written Findings of the SDT were given on 29th April 2013 and were filed with the Law Society on 1st May.

[2]The disciplinary proceedings arose in unusual circumstances. They were not brought by the Regulator, the SRA, but by a complainant, the Respondent to this appeal, who had been at the wrong end of hostile litigation brought by clients of the solicitors in 2010. The Respondent was ultimately successful in the underlying proceedings in the Chancery Division, and armed with documentary material obtained in parallel litigation in the US (which was later compromised) he decided, no doubt on advice, to return the fire. Much was sought to be made by Mr Timothy Dutton QC of the heterodox nature of the proceedings, of the Respondent’s possible motives for seeking to turn the tables on those representing the Respondent’s opponents in the 2010 litigation, and of the corollary constraints which afflicted the Appellants’ defence to the charges; but ultimately (as I will come to explain) this is something of a red herring. The essential issue in this appeal is whether the SDT gave an adequately reasoned series of findings in a case which was atypical for other reasons.

[3]In order to avoid unnecessary confusion – the Appellants before me were of course the Respondents in the proceedings below – I will hereafter usually be referring to the parties by their proper names.

[4]I have used the epithet ‘atypical’ because the proceedings before the SDT were extremely complex. The evidence was heard over six days, including submissions, and the underlying documentary material was voluminous and dense. It merited punctilious analysis and reflection. I have absolutely no doubt but that those representing the parties below attained the standard that these proceedings mandated (Mr Shaw and Mr Turnbull were represented by Mr Justin Fenwick QC and Mr Tom Asquith; Mr Logue was represented by the same Counsel who appeared before me). However, Mr Dutton’s Grounds of Appeal call into question the quality of the SDT’s decision making, and in order to ascertain whether that criticism is made good I will be needing to apply to this Judgment the very qualities I have recognised in all the lawyers representing the parties at all material times. These observations aside, I am not convinced that Messrs Shaw and Turnbull were as forearmed as they might have been to rebuff the forensic power of the cross examination of Mr John Wardell QC, and (to the extent relevant) the reasons for this will also need to be examined.

[5]Having paid tribute to the quality of the arguments and forensic skills on display both before me and below, I do need to introduce a mildly querulous note. The time estimate given to the Administrative Court Office, on my understanding by those representing the Appellants, was one of 2½ days with one day for pre-reading. This has proven to be a considerable under-estimate. The hearing occupied 4 full days of Court time and even that was insufficient because both parties were obliged to truncate their oral arguments on important issues leaving me to do the best I could on the basis of the written arguments. Mr Dutton was unable to complete his Reply and at my invitation provided a written document which in the event extended to 49 pages, much of which was straining at the leash of what could properly described as a ‘Reply’ within the rules; I have read it nonetheless. I have also read the Respondent’s Response document. Aside from the parties’ Skeleton Arguments, the quantity of further written arguments has been so copious that I have seen fit to list these in an Appendix to my Judgment in order to demonstrate that I have not forgotten anything. I have read all this material carefully but I have had to continue to bear in mind that the Appellants are not entitled to deliver a case on the evidence which was not advanced before the SDT. My complaint, although I do not press it forcibly because I do understand and appreciate the importance of this appeal to both parties, is that the Appellants in particular should have anticipated the manner in which this litigation would develop and have collected all their submissions in one place at an earlier stage, and that the ACO should have been given a more realistic time estimate and have been warned that the judge hearing the appeal would need several days to prepare his or her Judgment.

[6]There are six Grounds of Appeal against the findings on the misconduct allegations, and a separate sanction appeal brought by Mr Turnbull alone. But before introducing these it is necessary to set the scene.

Essential Factual Background

[7]The SDT has provided an accurate and comprehensive narrative of the lengthy history to the litigation to which I have already referred; it is clear that the Tribunal drew heavily from the Skeleton Argument filed on behalf of the solicitors. With respect to the SDT, there is an even better summary in the Judgment of Roth J delivered on 23rd July 2010 (

[2010] EWHC 1864 (Ch)

), obviating the need for me to do more than pick out the essential elements in order to make sense to readers unfamiliar with the background of what follows. I will add one or two additional points to reflect Mr Dutton’s submissions when he opened this appeal.

[8]Mr Andrew Shaw was admitted as a solicitor in 1981 and has enjoyed a distinguished career and unblemished reputation in the profession. Between 2009 and his striking off by the SDT he was a partner in the commercial litigation department at Stewarts Law LLP. Mr Craig Turnbull was admitted as a solicitor in 2006, and in 2010 was working in the commercial litigation department at Stewarts Law, insofar as is material to this case under the direction of Mr Shaw.

[9]Mr Geoffrey Logue is a British citizen and businessman who at various times has and had property interests in the US, England, France and Italy, and possibly elsewhere too. Between October 2002 and January 2005 he was involved with a number of companies incorporated in the US and described in the papers as part of the “Retreats Group”, whose president and CEO was Mr Robert McGrath. In January 2005 the two men fell out and on 24th January Mr Logue received a termination payment in the sum of $3,650,000. Litigation between the parties ensued in which serious allegations were made by both men against each other; the exact detail of these does not matter at this stage. In September 2005 the litigation was compromised and further monetary consideration passed to one of Mr Logue’s companies. Then, in July 2006, the Retreats companies filed for relief under Chapter 11 of the US Bankruptcy Code, and in due course a Liquidating Trust was set up. At the very end of the relevant Limitation period under US Bankruptcy law, the Trust issued complaints in the US Federal Bankruptcy Court against inter alios Mr Logue and one of his corporate entities alleging that there had been both fraudulent and preferential transfers in 2005: the former depended on establishing that Mr Logue had received less than reasonable equivalent value when the debtor was insolvent or became insolvent as a result of the transfers; the latter depended on establishing that Mr Logue was an ‘insider’ within the relevant preference period. On my understanding, the fraudulent transfer allegation, which was one of constructive not actual fraud, covered both the January and September 2005 transfers; the preferential transfer allegation was confined to the latter.

[10]The US proceedings were served on Mr Logue by first class post on 31st July 2008 sent to his apartment in Park Avenue, New York; and then were served personally on 23rd December 2008 on the porter at the apartment building after the process server had been unable to contact Mr Logue himself. Technically, this was valid service under US law, although it was always Mr Logue’s position that he never received these documents (this has been hotly contested but I need not investigate this issue); and in July 2009 a ‘default’ was entered in the Federal Court. After some procedural difficulties, on 5th April 2010 the Liquidating Trust issued a motion in the Federal Court for entry of a final judgment against Mr Logue quantifying damages with a request for a hearing. On about 7th April the Court ordered that the documents relied on to quantify the claim be served on Mr Logue personally by 29th April, with a quantification hearing fixed for 5th May 2010. Efforts were then made to comply with the Order by serving Mr Logue at the address where he had been validly served at the end of 2008, namely the Park Avenue apartment.

[11]In the meantime, Mr Shaw had entered on the scene. The precise sequence of events is unclear, and does not matter for present purposes, but on 16th February 2010 Mr Shaw emailed the Liquidating Trustee, Mr Douglas Evans, out of the blue to explain that they had areas of mutual interest, and ‘we would like to discuss with you possible ways in which this property [in London] and Logue’s other funds may be secured for the benefit of any judgment you are ultimately able to secure against Mr Logue’[C2/495]. In the same month Mr Shaw was contacted by Mr Christian Candy, founder of CPC Group Ltd, who had developed concerns about Mr Logue’s interest in an apartment at One Hyde Park, a Candy/CPC flagship project (albeit one technically managed by or through a Guernsey entity, PGGL). In essence, the concern apparently was that although Mr Logue through a Liechtenstein Stiftung had paid four of the deposits for the apartment, the serious allegations being made in the US proceedings might mean that PGGL could not legally accept the balance of the purchase price. This concern, at least in the form in which it was communicated to Mr Shaw, was accurately recorded by the SDT at paragraph 39 of its Findings. Candy/CPC became Stewart Law’s client although PGGL retained different solicitors, S.J. Berwin.

[12]On 19th February 2010 S.J. Berwin wrote to Mr Logue’s solicitors, Gordons Partnership LLP, giving expression to these concerns and specifically pointing out that Mr Logue was a defendant to proceedings in the US Bankruptcy Court [C2/502]. After some delay, on 19th March Gordons replied to this letter accusing Mr Candy of a blatant attempt to blackmail Mr Logue [C2/551]. Although the letter does refer to a ‘US Bankruptcy administrator’ it asserts that Mr Logue has no relationship with him whatsoever. Mr Dutton submitted that this constituted an evasive reply and that Mr Shaw, who subsequently saw the letter, reasonably concluded that Mr Logue must have known about the bankruptcy proceedings. I agree that the reply was somewhat equivocal, and could have been interpreted as Mr Shaw did.

[13]Following his self-introductory email, Mr Shaw travelled to Boston to meet the Liquidating Trustee and at least two sets of lawyers working in that jurisdiction; the principal attorney was Mr Jeffrey Wiesner of Stern, Shapiro, Weissberg and Garrin LLP. The precise sequence of events does not matter but in April 2010, in line with Mr Shaw’s first email, the strategy was developed to apply for a worldwide Freezing Order in the UK under section 25 of the 1982 Act in aid of the US proceedings. Mr Dutton explained to me the essential ingredients of a successful application under this section, and one of these was the need to prove a real risk that the defendant might dissipate his assets.

[14]It is necessary to be clear about who was acting for whom at this stage. The Liquidating Trust has its own attorneys in the US (three firms, I was told) and Stewarts Law in the UK. Stewarts Law was also acting for Candy/CPC who, to complicate matters further, had their own attorneys in the US, namely Jones Day. Moreover, Mr Dutton told me that Jones Day had some sort of advisory role as regards the Liquidating Trust. That aside, the Trust had limited assets (only $135,000 in liquid funds) and all the documentation points to the fact that Candy/CPC was funding the UK proceedings until 21st May 2010, and a few days later conditional fee arrangements were concluded.

[15]Stewarts Law’s retainer by the Liquidating Trust was not placed on a formal basis until 22nd April 2010, but by then preparations were well advanced to apply for the Freezing Order in the Chancery Division. Stewarts Law instructed Mr Jeffery Onions QC and Ms Hannah Brown of One Essex Court Chambers. I will be examining what happened in more detail later, but on 29th April 2010 the application was made without notice to Morgan J on the basis of affidavits sworn by Mr Evans, Mr Wiesner and Mr Shaw, and written and oral submissions advanced by Leading Counsel. The material placed before Morgan J was substantial and it might give a misleading impression to place too much emphasis at this stage on matters which may only have acquired real significance later on, but in order to make sense of the story it is necessary to identify the three pieces of information which it was alleged were not placed before the Court at the without notice hearing.

[16]This information comprised an email from a process server in New York, Mr Sy Kahn (his name has been consistently misspelt in the papers put before me, including by the SDT), dated 12th April 2010, an email from a private investigator in New York, Mr Mike Udvardy, dated 14th April 2010, and a report given orally to Stewarts Law by a private investigator in London, Mr Knuckey, on 15th April 2010. Taken together, this material strongly suggested that Mr Logue was no longer residing at the Park Avenue apartment, and subsequent evidence indicates that he moved out in April 2009.

[17]This information was material for this reason. The evidence adduced before Morgan J suggested that Mr Logue was evading service of the bankruptcy proceedings in New York and for that reason, amongst others, there was a risk of dissipation of assets. If in fact Mr Logue was no longer living in New York but was dividing his time between London and Italy, as the non-disclosed material appeared to show, then an important element of the Liquidating Trust’s case on the risk of dissipation was removed from the picture. But it is arguable that the risk of dissipation might still be capable of being inferred even if the non-disclosed material were included.

[18]At all events, and for whatever reason (to put the matter entirely neutrally at this juncture), this information was not placed before Morgan J and he made the Order. Service of the Order was to be effected both in New York and in London, and it was successfully served on 30th April 2010 on Mr Logue’s solicitors in this jurisdiction, Gordons. Thereafter, Mr Logue moved swiftly and made three applications: first, to vacate the quantification hearing date in the US (he was successful); secondly, to obtain fortification of the Liquidating Trust’s cross undertaking as to damages and security for costs; and, thirdly, to set aside Morgan J’s without notice order.

[19]The second application came before Norris J on 21st May 2010 by which time the proceedings were no longer without notice and Mr Logue was represented by Mr John Wardell QC, as he has been at all material times thereafter. Working on the premise, supported by evidence, that the Liquidating Trust’s readily realisable assets were confined to $135,000 less the Trust’s recent expenditure, and that to require fortification and/or security would stifle the claim, Norris J unsurprisingly decided to refuse the application.

[20]The third application came before Roth J on 6th July 2010. It was heard over three days and on 23rd July 2010 Roth J discharged the Freezing Order. At this stage all that need be said is that the learned Judge was critical of the Liquidating Trust’s failure to give full and frank disclosure at the without notice hearing.

[21]The Liquidating Trust’s claim in the US was settled in February 2012 on terms which entailed the payment of $325,000 to it by Mr Logue.

[22]As I have explained, the foregoing is an extremely abbreviated summary of the essential factual background to this litigation. At my request the parties have prepared a more detailed Chronology and this is to be found as an Appendix to this Judgment – I have included the Respondent’s suggested additions. Even this document is far from being comprehensive.

The Proceedings before the SDT

[23]On 25th May 2012 Mr Logue submitted his application to the SDT in the form of a witness statement under rule 5 of the Solicitors (Disciplinary Proceedings) Rules 2007 [2007 SI No 3588] [W1/tab 1]. The Appellants complain that this is a lengthy and tendentious document which travels over many issues with little clarity of focus, and includes some fairly exorbitant allegations: for example, that the Appellants were party to a conspiracy to harm the Respondent together with the Candys and the Liquidating Trust. Indeed, it was a consistent theme of Mr Dutton’s submissions that the whole manner in which the case was presented below was unfair and unbalanced, as it would not have been had the SRA been the prosecutor. Mr Dutton used the term ‘indecent fervour’ to characterise both the rule 5 statement and Mr Wardell’s cross examination.

[24]I will be examining this broader contention in greater detail when I come to address Mr Dutton’s sixth Ground of Appeal, but at this stage I note that although I do agree that Mr Logue’s rule 5 statement does not contain a sufficiently precise iteration of ‘the allegations and the facts and matters supporting the allegation and each allegation contained in it’ (see rule 5(2)), by the time the complaint came on for hearing in February 2013 the parties’ solicitors had been able to agree on a List of Issues which enabled proper focus to be directed to the matters which fell for decision. The Appellants did not submit to the SDT that the matters should be struck out or adjourned because they did not know the case they had to meet, and Mr Dutton did not contradict Mr Wardell’s submission that the case against these solicitors has not changed. My one additional observation would be that Mr Logue’s more intemperate allegations fell away.

[25]The structure of the SDT’s Judgment [A1/tab 6] does not exactly reflect the course of the proceedings in that Mr Wardell’s opening submissions are recorded after the evidence was set out (see paragraph 156.1ff). To be clear: the Judgment sets out the allegations; the documents considered; the preliminary matters which fell to be decided; the factual background; the evidence given by the witnesses (Mr Logue, Mr Shaw and Mr Turnbull, in that order); the parties’ submissions; and then the Tribunal’s Findings.

[26]The evidence is set out at very great length. As the SDT correctly noted, Mr Shaw in particular was subjected to a wide-ranging and extremely detailed cross examination by Mr Wardell. The evidence Mr Shaw gave has been set out, in my view faithfully, between paragraphs 79 and 128 of the Judgment, but what we do not see is the SDT’s evaluation of this evidence or of Mr Shaw as a witness – save, Mr Logue would say inferentially, in the form of the SDT’s Findings. However, after setting out the allegations, evidence and submissions etc over 67 closely typed pages, the key part of the Judgment, the Findings, extend over only 3 such pages. I am not suggesting that this in itself could form the basis of a successful appeal, but in view of the length and breadth of the allegations and the obvious complexity of the case I must say that my initial impression was to have been somewhat surprised by the brevity of the core part of this Judgment.

[27]At this stage I should explain that the allegations were to the effect that both Appellants had acted dishonestly and in breach of their duties under the Code of Conduct in the following general respects:(i) by providing misleading information and/or suppressing information at the without notice hearing as to the Respondent’s place of residence in New York;

(ii) by failing to give full and frank disclosure at the without notice hearing in relation to the involvement of Candy/CPC – the allegation was that the latter had a commercial interest in the outcome, and was funding the proceedings in the UK, and that both of these matters should have been disclosed;

(iii) by providing misleading information at the without notice hearing as to the nature of the case being advanced by the Liquidating Trust against Mr Logue in the US, in particular (and I am simplifying the matter considerably at this stage) that no case of actual fraud was being advanced;

(iv) by disclosing confidential information to Jones Day and/or Candy/CPC contained in Mr Logue’s affidavit of means;

(v) by providing misleading information, or by failing to give full and frank disclosure, in relation to the involvement of Candy/CPC at the fortification hearing;

(vi) by providing misleading information to the Court regarding Mr Logue’s New York apartment after the without notice hearing, in particular in the form of two affidavits (Mr Shaw’s seventh and eighth affidavits) sworn in July 2010 shortly before and shortly after the discharge hearing before Roth J;

(vii) by providing misleading information to the Court in relation to Mr McGrath;

(viii) by providing misleading information to the Court as to Mr Logue’s prospects of having the ‘default’ removed in the US; and

(ix) by providing an incorrect explanation as to why the HM Land Registry searches had been added to Mr Evans’ first affidavit after it had been sworn.

[28]The SDT began their deliberations on Monday 11th February 2013, and at the end of that day the Chair announced that they had made ‘good progress in considering the various allegations’. The matter was then adjourned to Thursday 14th February and it is clear from the transcripts that there were no deliberations over the intervening period. After a morning’s deliberations on 14th February, the SDT returned to the hearing room (it is not clear at exactly what time, but the Chair introduced the proceedings with the words, ‘good afternoon’) and asked the parties whether, in relation to the case against Mr Turnbull, there was any material difference between the concepts of dishonesty and deliberate misconduct. It should be explained that by this stage Mr Logue had abandoned the whole of his case that Mr Turnbull had been dishonest save in relation to allegation 6.3, which tied in with Mr Shaw’s eighth affidavit. The parties were agreed that the subjective part of the Twinsectra dishonesty test meant that there was no real difference between that and deliberate misconduct, and it is clear from paragraph 156.34 that the SDT proceeded on that basis.

[29]I am told that the SDT delivered its decision at 13:05. In short it explained that many of the allegations of dishonesty were proved against Mr Shaw and that the paragraph 6.3 allegation of dishonesty was also proved against Mr Turnbull.

[30]Mr Fenwick rose to deliver his speech in mitigation on behalf of Mr Shaw at around 14:05. He sought to contend that this was an exceptional case which did not warrant the usual sanction where dishonesty was found, namely striking off. After hearing submissions by both parties, the SDT ruled that ‘there were no exceptional circumstances in this case so as to justify a variation from the usual course’, and ordered that Mr Shaw be struck off the Roll of Solicitors. Mr Fenwick then proceeded to mitigate on behalf of Mr Turnbull, but the SDT came to the same conclusion observing that ‘he should have had the strength of character to say no’.

[31]I have already adverted to the considerable delay which then ensued between the conclusion of the oral hearings and the delivery of the written Judgment. I have to say that, particularly in view of the brief nature of the Findings, this hiatus of over ten weeks was too long. I would have been less critical if it was obvious that the Findings required considerable time to formulate, but on the face of things they could not have done. They were not significantly more fulsome than the SDT’s decision announced orally on 14th February. Grounds of Appeal

[32]As I have said, there are six Grounds of Appeal which relate to misconduct and a further Ground which relates to the sanction imposed on Mr Turnbull. At this stage I will summarise the Grounds as follows:(i) GROUND 1: error of approach in failing to identify what evidence was accepted or rejected and to link the evidence which was accepted with the conclusions.

(ii) GROUND 2: failure properly to apply the correct test of dishonesty.

(iii) GROUND 3: failure properly to set out its reasons and reasoning process.

(iv) GROUND 4: failure to make rulings on important matters of law.

(v) GROUND 5: the findings were against the weight of the evidence and/or could not be justified by reference to the criminal standard of proof.

(vi) GROUND 6: proceedings conducted in an unfair manner.

[33]Mr Dutton advanced these as discrete Grounds but in my view they are clearly interlinked. I will be addressing them in the sequence I believe makes the best sense. Ground 5 requires a close examination of the evidence but at this juncture I should point out that ‘against the weight of the evidence’ is not a valid Ground of appeal in this jurisdiction. It will need to be recast to reflect the settled jurisdiction of this Court in relation to challenges to findings of fact. Governing Legal Principles The Duty of Full and Frank Disclosure

Governing Legal Principles

[34]The duty of full and frank disclosure is ingrained in all solicitors in relation to without notice hearings. The system would break down if Courts were routinely misled by omission. The duty subsists for as long as proceedings remain without notice. For present purposes, it is sufficient to state that the duty had come to an end when Mr Logue’s applications came before Norris J on 21st May 2010.

[35]Numerous authorities set out and explain the duty. I was referred to Brink’s Mat Ltd v Elcombe and others

[1988] 1 WLR 1350

, a decision of the Court of Appeal which makes clear that the duty covers all facts which should have been known to the applicant had he made all such inquiries as were reasonable and proper in the circumstances. Furthermore, the material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the Court and not by an assessment of the applicant or his legal advisors (1356H). Here, the Court of Appeal was aligning itself with an earlier dictum of Bingham J, as he then was, in Siporex Trade SA v Comdel Commodities Ltd

[1986] 2 Lloyd’s Rep 428

at 437 – the duty requires a party to ‘… disclose all facts which reasonably could or would be taken into account by the Judge in deciding whether to grant the injunction. It is no excuse to say that he was not aware of the importance of matters he has omitted to state’. Mr Dutton drew my attention to the following passage in the Judgment of Slade LJ:

“Particularly in heavy commercial cases, the borderline between material facts and non-material facts may be a somewhat uncertain one. While in no way discounting the heavy duty of candour and care which falls on persons making ex parte applications, I do not think that the application of the principle should be carried to extreme lengths… (1359C-E)”

[36]The duty also contains within it a corollary obligation to identify possible defences and draw these to the attention of the Court. There is also a duty to furnish the Court with a fair and balanced account: see Dillon LJ in Lloyd’s Bowmaker Ltd v Britannia Arrow Plc

[1988] 1 WLR 1337

at 1348.

[37]Even more axiomatically, there is a separate duty arising at all times not to mislead the Court and, should the Court have been inadvertently misled, to correct that as soon as possible. These duties are prominent in the Solicitor’s Code of Conduct.

[38]Mr Shaw and Mr Turnbull accepted before the SDT that they were fully cognisant of these duties. Unsurprisingly, it was not their respective cases that these duties were overlooked; rather, that they had overlooked, or had not appreciated the full significance of, material which should have triggered the duty to disclose; and, in any event, that they were not subjectively dishonest.

[39]Two discrete issues arose in relation to the position of Candy/CPC. It was suggested by Mr Logue that Stewarts Law should have disclosed at the without notice hearing the commercial interest of Candy/CPC in the outcome of the UK proceedings and the fact that they were funding those proceedings. In oral argument, Mr Wardell submitted that a solicitor must disclose the fact that he is also acting for a party who is in acrimonious dispute with the defendant, is funding the action, and has a commercial interest in the outcome, however indirect. To do so would correct any impression the Court might otherwise have that the proceedings were being brought dispassionately. Secondly, a solicitor must also disclose the existence of a third party funder because that matter is relevant both to the cross undertaking in damages which is usually required as the price for giving the Order without notice, and likely issues as to security for costs.

[40]In support of these submissions, Mr Wardell referred me to Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 AER 534, Sinclair Investment Holdings SA v Carlton Ellington Cushnie and others

[2004] EWHC 218 (Ch)

and Ian Frances (Liquidator of Arab News Network Ltd) v Somar Al Assad and others

[2007] EWHC 2442 (Ch)

. In Keary the Court of Appeal pointed out that in assessing whether the ordering of security for costs would stifle a valid claim the Court would need to consider whether the claimant company could raise the money from ‘other backers or interested persons’ (540G-541B). In Sinclair, Mann J made clear that the same principles applied to the cross undertaking as to damages (see paragraphs 19-21, and see also paragraph 81 of Ian Frances).

[41]I have little hesitation in agreeing with Mr Wardell that the presence of a third party funder is a relevant matter which must be disclosed at a without notice hearing because it is directly relevant to the exercise of the Court’s discretion as regards fortification of the cross undertaking in damages. My own slight hesitation stems from the fact that Mr Wardell did not show me any appellate decisions in support of such a principle, and (when I come to address the fortification hearing) the matter did not proceed quite on that basis. I consider that Mr Wardell’s broader submission based on the third party funder’s commercial interest in the outcome is slightly more difficult: the correct answer is, probably, that it depends.

[42]In setting out the position in this way I should make it clear that a solicitor cannot say that the reason why he is not disclosing the existence of a third party funder is because to do so would be to breach solicitor/client confidence. Although the solicitor does not have to identify the funder by name (in the absence of instructions to do so), he does have to inform the Court that a funder exists and that he is or is not prepared to fortify the cross undertaking; the Court may then decide how to proceed. Frankly, this is, or ought to be, entirely obvious to a reputable commercial lawyer. Furthermore, I do not consider that the abuse of process line of cases (e.g. Abraham v Thompson [1997] 4 AER 362 and JSC BTA Bank v Ablyazov (No 6)

[2011] 1 WLR 2996

) are relevant to the foregoing questions, nor is the argument addressed in Abraham to the effect that third party funding questions should usually be addressed at the s.51 SCA 1981 stage and not before: this line of authority has nothing to do with material non-disclosure. Again, all of this is, or ought to be, obvious to a reputable commercial solicitor. But by expressing the matter in these terms I am recognising that whether Mr Shaw applied his mind to these questions, or deliberately decided not to do so, raises separate, subjective issues which deserve independent consideration. Legal Professional Privilege

[43]Mr Logue did not have power to compel Mr Shaw to disclose privileged documents: c.f. the position of the Law Society exercising powers under s.44B of the Solicitors Act 1974. It follows that, at least in principle, the SDT were precluded from examining documents which were caught either by legal advice privilege or litigation privilege. In the context of applications for wasted costs orders the House of Lords in Medcalf v Mardell

[2003] 1 AC 120

emphasised the difficulties under which the respondent to such an application would be likely to be operating – the privilege in question is not one for the lawyer to waive, it belongs to the client. Lord Bingham stated that the Court should make ‘full allowance’ for the inability of the practitioner to tell the whole story, and should not make a wasted costs order without satisfying itself that in all the circumstances it is fair to do so (135D-H). Lord Hobhouse explained that the Court should take care to examine whether privileged material might have a possible relevance; and, if so, to give the practitioner the benefit of the doubt (see paragraphs 62-63). I interpret him as saying that the position cannot be considered entirely in the abstract and that some regard must be had to the particular context.

[44]These principles were fully explained to the SDT and are without controversy. Mr Fenwick urged the SDT to show condign caution although he did not correlate that submission with any specific evidential question or issue. The point becomes more problematic when one adds to the mix two factors: first, that it is clear that some privileged documents were disclosed in error to Mr Logue in the US proceedings by Jones Day (Mr Wardell submitted that there were unlikely to be any Jones Day documents which had not been disclosed in this manner); and, secondly, that three pages of highly relevant emails, on the face of things clearly privileged, were placed before the SDT by the Appellants. I will need to return to these issues in due course.

Standard of Proof

[45]The SDT operates a criminal standard of proof: see paragraph 155 of its Judgment.

Dishonesty and Good Character

[46]The law in this respect is well-settled. In Twinsectra Ltd v Yardley and others

[2002] 2 AC 164

the House of Lords explained that there were two limbs to dishonesty, the first objective and the second subjective. The first limb raised the question of whether the solicitor had acted dishonestly by the ordinary standards of reasonable and honest people; the second limb raised the question of whether the solicitor had himself been aware that by those standards he was acting dishonestly. Lord Hoffmann emphasised that these principles required more than knowledge of the facts which made the conduct wrongful: ‘they require a dishonest state of mind, that is to say, consciousness that one is transgressing ordinary standards of honest behaviour’ (see paragraph 20).

[47]The House of Lords did not refer specifically to the objective and subjective limbs of the test, in the sense that they did not use this terminology, but no one could have failed to understand the position. In any event, such nomenclature was applied to these separate limbs by the Divisional Court in Bryant and Bench v Law Society

[2009] 1 WLR 163

at 202, a decision referred to in Mr Logue’s Skeleton Argument below (see [W1/tab 4/para 10]). That authority also deals with the application of the criminal standard of proof and the relevance of good character: the latter (whether or not supported by affirmative evidence adduced through testimonials) is germane both to propensity and to credibility.

Reasons

[48]Rule 16(5) of the Solicitors (Disciplinary Proceedings) Rules 2007 provides:

“The Tribunal may announce its decision and make an order at the conclusion of the hearing or may reserve its decision for announcement at a later date. In either case the announcement shall be made in public and in either case the Tribunal shall as soon as is practicable deliver to the applicant and to the respondent its detailed written findings which shall include its reasons and conclusions upon the evidence before it.”

[49]There was considerable debate at the Bar as to the scope of the rule 16(5) duty, and I was taken to numerous authorities on the topic. Some of these are of general application; some are applicable to this specific context of SDT decision-making.

[50]My point of departure is to note that the epithet ‘detailed’ qualifies ‘findings’ and not ‘reasons and conclusions upon the evidence’. In oral argument I suggested that this meant that the written judgment had to be detailed but not the reasons and conclusions appearing at the end of it. Upon further reflection, I have concluded that this is not right, and that the reference to ‘findings’ is to that part of the judgment which contains the heart of the decision and in the instant case starts at page 67 under the rubric ‘the Tribunal’s Findings’. Nonetheless, the reasons need not be detailed; they need to be sufficient to explain the SDT’s findings on the various allegations which have been made, and the conclusions on the evidence also need to be set out. I take this as meaning that any necessary findings of fact have to be expressly stated, because a conclusion on the evidence is a finding of fact, although reasons for such conclusions may not be essential.

[51]The locus classicus in this area is the decision of the House of Lords in South Bucks DC v Porter

[2004] 1 WLR 1953

, where Lord Brown of Eaton-under-Heywood gave the leading opinion. Paragraph 36 is key:

“The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the ‘principal important controversial issues’, disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or important matter or by failing to reach a rational decision on relevant grounds. The reasons need only refer to the main issues in the dispute, not to every material consideration. … A reasons challenge will only succeed if the party aggrieved can satisfy the Court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision.”

In my judgment these principles apply to SDTs. In other words, there is nothing in rule 16(5) which requires either a higher or a lower standard of decision-making.

[52]Another case of high authority is Gupta v GMC

[2002] 1 WLR 1691

where the Privy Council made clear that there was no general duty on a disciplinary tribunal to give reasons for its decisions on matters of fact, particularly where its decision depended essentially on resolving questions of witness credibility and reliability. In such instances it would usually be sufficient for the tribunal to say that it preferred witness A to witness B. This is because the allegations which have been found proved ‘will usually mean that the practitioner will have a very good idea what evidence the committee has accepted’ (1698A/B). And, as Lord Rodger went on to explain:

“In this way, in cases involving issues of credibility and reliability, the structured determination of the committee dealing with the various heads of charge, will in itself reveal much about its reasons for reaching its decision. …[T]he fact that the practitioner can study a transcript of the hearing, including not only the evidence but the submissions on the evidence by the respective parties, further assists the practitioner in understanding not only which witnesses’ evidence the committee accepted and which it rejected, but why it did so.”

[53]These observations apply with equal force to the practice of the SDT where the evidence and submissions are set out in greater detail than is the habit of fitness to practise committees of the GMC. That said, there are two important qualifications to the made. First, Lord Rodger’s observations are directed to the paradigm case of issues of fact turning on the credibility and reliability of witnesses, where (for example) one witness says X and the other says Y or not-X; they are not intended to cover all conceivable cases. Secondly, care is needed to distinguish between matters of primary and secondary fact, and cases (in the second category of inferential fact) where certain anterior findings of fact may be necessary before the relevant conclusion is reached. I am thinking in particular of a finding of dishonesty made in a complex case where, in the absence of an admission by the witness, the conclusion will typically be an inferential one attained after consideration of several layers of evidence.

[54]I was taken to other authorities which are along similar lines. In the Matter of a Solicitor (Jiwayi) (CO/2646/99), a decision on a previous version of the Solicitors Disciplinary Tribunal Rules, seems to be to be no different from Gupta: in the particular context of that case, the Lord Chief Justice held that the factual findings spoke for themselves to anyone with a working knowledge of the Rules. Muscat v HPC

[2008] EWHC 2798 (QB)

is an application of South Bucks and Gupta, as is Beresford v SRA and the Law Society

[2009] EWHC 3155 (Admin)

, although in that case it should be pointed out that the level of reasoning displayed is considerably higher than that which one may discern in the instant case.

[55]Mr Dutton placed particular reliance on Quinn v BSB [15/2/13], English v Royal Mail Group [EAT, 3/7/08] and Duthie v NMC

[2012] EWHC 3021 (Admin)

. In Quinn the tribunal stated no more than it found the facts proved; it did not set out its reasoning process in respect of various documentation, including attendance notes, to which it had referred. The Visitor held that this was insufficient: this was not a case where the tribunal was essentially making a choice between the evidence of two witnesses. In English, the tribunal plagiarised the respondent employer’s written argument without acknowledging it. In Duthie the problem was not that the tribunal gave inadequate reasons but rather that the reasons it did give were illogical. In my view these authorities do not assist.

[56]Mr Dutton drew my attention to decisions of other SDTs where much fuller reasons have been given. This was more helpful because it served to help rebut Mr Wardell’s submission that what we see in the instant case is standard practice. However, ultimately these decisions cannot assist me in determining the instant case, for two reasons. First, the issue here is the minimum requirement consistent with rule 16(5), not the ideal requirement, and other constitutions of the SDT may have exceeded that minimum requirement. Secondly, and here I am addressing Mr Wardell more than Mr Dutton, what is or is not ‘standard practice’ is not the issue; the issue is whether in the circumstances of the instant case this SDT has complied with rule 16(5).

[57]In that regard, I cannot improve on what Lang J said in Adesemowo v SRA

[2013] EWHC 2020 (Admin)

, at paragraphs 71-73. In short, ‘the standard of the reasons required depends upon the nature of the tribunal, the task it is performing and the provisions requiring it to give reasons’, and it is a permissible approach to read the conclusions in tandem with the relevant paragraphs of the evidence and the submissions. Even so, I would add that adhering to this approach will not always enable the losing party to understand why he has lost and on what basis; and if that be the position a more expansive approach will be required.

[58]Finally in this regard, I draw on two further authorities. At paragraph 118 of his judgment in English v Emery Reimbold & Strick Ltd

[2002] 1 WLR 2409

, Lord Phillips MR (as he was then) said this:

“…while it is perfectly acceptable for reasons to be set out briefly in a judgment, it is the duty of the judge to produce a judgment that gives a clear explanation for his or her order. The second is that an unsuccessful party should not seek to upset a judgment on the grounds of inadequacy of reasons unless, despite the advantage of considering the judgment with knowledge of the evidence given and submissions made at the trial, that party is unable to understand why it is that the judge has reached an adverse decision ”

I do not read Lord Phillips MR as saying anything in conflict with the final sentence of paragraph 36 of South Bucks, but Mr Wardell placed reliance on this passage in riposte to Mr Dutton’s submissions in Reply. Mr Wardell also drew my attention to paragraph 26 of English where the Court of Appeal made clear that in the event that the appeal Court should decide that the reasons given were inadequate, the choice is between deciding whether itself to proceed to a rehearing or to direct a new trial. I will continue to bear this choice in mind throughout my consideration of this, the key issue in this appeal.

[59]The second authority to which I would like to refer is one which was not cited to me by the parties (but which does not warrant an adjournment for further argument), namely the decision of Sedley J as he then was in R v Solihull MBC, ex parte Simpson

[1993] 26 HLR 370

, where he said this:

“[Giving reasons for judicial decisions] is a fundamental aspect of good public administration, underpinned increasingly by law, because it focuses the decision-maker’s mind on exactly what it is that has to be decided, within what legal framework and according to what relevant evidence and material”

[60]I touched on this aspect of the matter in oral argument without managing to emulate Sedley J’s clarity and precision. The reasons for a decision are not some optional extra nor (in all cases) is it to be predicated that the decision-maker must have harboured the reasons which do not readily spring out from the page. Particularly in a difficult case, the very process of explicitly articulating one’s reasons in a systematic way with reference to the governing law and the available evidence produces a decision of better quality than would or might otherwise have been the case; and, moreover, which might be of a different outcome.

The Approach of this Court on a Section 49 Appeal

[61]The SDT is a specialist tribunal which has the benefit of seeing and hearing witnesses give evidence, here over a number of days. This Court exercises a review rather than an original jurisdiction, and – should the reasons given by the tribunal below be inadequate – will only embark on a rehearing of the case if, in exceptional circumstances, it is fairly able to do so.

[62]The parties are agreed that I should only intervene (and here I am addressing Ground 5) if satisfied that the SDT’s decision was ‘wrong’, which means in reality, ‘plainly wrong’. A plethora of authorities exists to support these elementary propositions of law, and I was referred only, but sufficiently, to Gupta v GMC

[2002] 1 WLR 1991

(paragraph 10), Biogen Inc v Medeva Plc

[1997] RPC 1

(page 50) and McGraddie v McGraddie and another

[2013] 1 WLR 2477

(at paragraphs 1-6, 26-35). It is unnecessary for me to say anything more about this issue. Analysis of the Factual Issues

Introduction

[63]Unfortunately it is necessary for me to analyse the factual issues in this case in some detail, for two reasons. First, and as I have made plain, Mr Dutton seeks to persuade me that the SDT’s conclusions on the issues of dishonesty were ‘plainly wrong’ having regard to the incidence of the criminal standard of proof. I believe that I have already made clear that Mr Dutton must face an uphill task in this regard, but this did not deter him from undertaking a punctilious analysis of the evidence, both oral and documentary, and similarly does not deter me from grappling with the material in the same spirit. That said, Mr Wardell submitted that Mr Dutton’s approach to the evidence was selective, and it is in the nature of appeals of this sort that neither party attempted to cover the whole ground, nor could they. This is yet another reason for this Court applying a self-denying ordinance, and should also be a sound basis for my abstaining from turning over all the stones. Secondly, and perhaps more promisingly from Mr Dutton’s perspective, the Court has to wrestle with the material in order to assess whether the SDT’s brief reasons did justice to it. I should make clear that I am not intending to cover all the various allegations on which the SDT made findings. Counsel confined themselves to the key matters, and so will I.

The Without Notice Hearing: Non-Disclosures in relation to the New York Apartment

[64]Following the Order made by the US Bankruptcy Court that Mr Logue be personally served, preparations were made to serve him at his Park Avenue address [C2/618; C2/632] although there was some doubt as to whether he would be physically present [C2/637; C2/642].

[65]On Monday 12th April 2010 the process server, Mr Sy Kahn, emailed Mr Wiesner with the news that he had spoken with the doorman at the apartment at 7pm on Friday evening, that the doorman was unfamiliar with Mr Logue’s name and the latter was not on the tenant list, and that the listed telephone number for Mr Logue was no longer in service [C2/643]. Ten minutes later Mr Wiesner forwarded this email to Mr Shaw and to Mr Turnbull, suggesting that an investigator be found to locate Mr Logue (presumably in the US) and inquiring as to whether there was an address for him in England. There is another copy of what appears to be the same email at [C2/642A].

[66]Efforts were made to identify a PI or ‘skip tracer’ in the US, and a conference call was set up to discuss the issues. Mr Shaw was copied into most of the relevant emails.

[67]On 13th April Mr Mike Udvardy was earmarked as the ‘skip tracer’ [C2/661] and Mr Shaw was copied into the relevant email. It is clear, on the assumption that he read and ingested the email, that Mr Shaw knew why Mr Udvardy was being engaged [C2/662-663].

[68]On 13th April Mr Turnbull emailed Ms O’Neill of Jones Day asking her to provide him with the ‘final version of the documents which the process server recently attempted to serve on Logue’[C2/664]. Mr Wardell submitted, and I agree, that this could only have been a reference to the Kahn email. But I note that Mr Shaw was not copied into the Jones Day email.

[69]Later that day Ms O’Neill emailed Mr Turnbull, not copied into Mr Shaw, with the information that the documents that the process server had recently attempted to serve on Mr Logue had also been posted to him but were returned as ‘undeliverable, under separate cover’[C2/664]. The ‘track and confirm’ document, which Mr Shaw did not see, stated that the package was ‘undeliverable as addressed’[C2/638].

[70]On 14th April 2010 Mr Wiesner emailed Mr Shaw and Mr Turnbull with the news that ‘initial info from location is that Logue moved out about a year ago no other info’[C2/667]. The source of that information was ‘Mike’ who was described as ‘the investigator’, in other words the Mike Udvardy referred to in the previous day’s email. A consistent picture was clearly emerging of Mr Logue no longer being present in New York.

[71]On 15th April 2010 Mr Turnbull emailed Mr Wiesner and Ms O’Neill (but not Mr Shaw) with the news that ‘our UK investigator has spoken to Logue, and was told that he [Logue] was spending 2 days a week in London (usually Thursdays and Fridays) with the remainder of his time in Trieste, Italy … the investigator is going to make some further inquiries and serve Logue with the motion, request, and notice of hearing today’ [C2/667]. This information rather fortified the conclusion that Mr Logue was no longer present in New York and was dividing the entirety of his time between London and Italy. The PI in London was Mr Knuckey and I will be returning to him in due course.

[72]All these matters were addressed in Mr Shaw’s first affidavit sworn for the purposes of the without notice hearing, not in Mr Evans’ or in Mr Wiesner’s. The Boston lawyer could well have covered the evidence ‘from the American end’, as it were, but for whatever reason he did not. Mr Shaw’s first affidavit was sworn on 28th April 2010 [C3/999ff] although by 19th April it was already ‘at an advanced stage’[C3/712A]. As the SDT well understood, because it was standard practice, Mr Shaw did not prepare his affidavit himself; it was a team effort, which included Mr Turnbull, other junior solicitors (probably) and Counsel, the latter no doubt working off solicitors’ drafts. Mr Shaw was ultimately responsible for the contents of his affidavits, and would be expected to read the drafts carefully to remove known errors; but it would not ineluctably follow that a mistake, a misleading statement or a suppression of relevant evidence must have been dishonest.

[73]Paragraph 8 of Mr Shaw’s first affidavit stated: ‘Mr Logue, a British citizen, who is, or was formerly a resident of the State of New York’[C3/1002]. Mr Dutton submits that this demonstrates that Mr Shaw was giving full and frank disclosure but I disagree, as did Roth J at the discharge hearing. More importantly, because the decision on this issue is neither mine nor Roth J’s, the SDT could not have agreed either, presumably because one would need to read the whole affidavit to gain a complete picture.

[74]Looking at Mr Shaw’s first affidavit on this holistic basis, I can see that there is no express reference to Messrs Kahn or Udvardy by name, and that although Mr Knuckey is mentioned this is not in the context of Mr Turnbull’s email of 15th April. The final sentence of paragraph 11 states that ‘it has not been possible to obtain further information about Mr Logue’ [C3/1003]. Paragraphs 39 and 42 state that what might be described as ‘Plan A’ is to serve Mr Logue ‘at his address in New York’ [C3/1016-1017] which appears to skate over the recent evidence. Paragraphs 45 and 46 refer to Mr Knuckey’s evidence but not to the conversation recorded in the email at [C2/667] but to different evidence which I will be addressing in a moment and suggestive of evasiveness on Mr Logue’s part.

[75]Paragraph 47 of Mr Shaw’s first witness statement gives rise to particular concern. Sub-paragraph (i) states that private investigators in both the US and England ‘have experienced (and continue to experience) particular difficulties in locating Mr Logue’. This can only be a reference to what Stewarts Law had been told by Messrs Udvardy and Knuckey, but it is partisan and selective. Mr Udvardy had ascertained that Mr Logue was likely no longer to be living at the New York apartment and Mr Knuckey’s first conversation of 15th April indicated that Mr Logue divided his time between London and Italy. Sub-paragraph (ii) is also misleading in suggesting that the return of mail from the New York address was in some way suspicious, and is premised on the basis that Mr Logue was still living at that address. Both of these sub-paragraphs, amongst others, are deployed in support of the proposition that ‘there are good grounds to suppose Mr Logue is seeking to evade service’, both in New York and in London.

[76]This proposition was deployed by Mr Shaw in his first affidavit for two purposes: first, to seek the Court’s permission to serve Mr Logue at two alternative addresses; and secondly, to buttress the Liquidating Trust’s case that there was a real risk that Mr Logue might dissipate his assets as and when he learned about the 5th May hearing date.

(i) of Mr Shaw’s first affidavit which provides:

‘he also appears to be attempting to evade service of further documents in the US proceedings’

. Mr Dutton sought to persuade me that this sentence is clearly a reference to Mr Knuckey’s evidence alone, but in my judgment that cannot be right: it is clearly a reference to paragraph 47 of the affidavit and the evidence of both Mr Knuckey and Mr Udvardy. Furthermore, paragraph 53(i) establishes the inextricable link between evidence bearing on the evasion of service issue and evidence bearing on the dissipation of assets issue. I see these as being Venn diagrams, or as one being the stepping stone to the other, as would any reasonably competent solicitor.

[77]I have read carefully the transcript of the without notice proceedings before Morgan J on 29th April 2010 [C3/1056-1087]. The relevant references have been helpfully collected at paragraph 70 of Mr Wardell’s Skeleton Argument, and I agree that the Court was given the clear impression during the course of Leading Counsel’s submissions that the New York apartment was where Mr Logue still resided (see [C3/1082/lines 17-18]), and that he was evading service there. Morgan J gave a short judgment which reflected the evidence which was before him.

[78]I should add that after the Order had been made Mr Shaw gave a second affidavit on 5th May 2010 [C3/1137] which exhibited a report from Mr Knuckey giving further information as to the latter’s contact with Mr Logue on 16th April 2010. This report had been emailed to Mr Turnbull late on 28th April and, although its existence was obviously known about, it was not available to be put before the Court the following day. The report was consistent with paragraph 46 of Mr Shaw’s first affidavit and gave the strong impression that Mr Logue was being evasive, if not slippery, in the UK. But both of Mr Shaw’s affidavit failed to make any reference to the Knuckey conversation with Mr Turnbull of 15th April which gave a somewhat different impression.

[79]Standing back from all this material, it is clear to me that any reasonably competent and honest solicitor would and should have put the additional Kahn/Udvardy/Knuckey material before the Court if he or she had known about it. Accordingly, the key questions for the SDT were: what did the Appellants know, and what is or are their explanation(s) for not placing this additional material before the Court?

[80]Mr Shaw’s witness statement filed for the purposes of the SDT hearing extended to 69 pages [W1/tab 2] and provided a series of explanations which I interpret as follows. First, he contended that the Kahn email was ‘overlooked’ (see paragraphs 69.3.2 and 173), placing reliance on a later series of emails dated July 2010. Secondly, and on the face of things inconsistent with his primary case, Mr Shaw contended that he was sceptical about the information received by his firm to the effect that Mr Logue had moved out of his New York apartment (see paragraph 165, which cross referenced with paragraph 69). This scepticism, read in conjunction with his feeling ‘not entirely confident’ that the information obtained from the doorman etc. could be trusted, appeared to indicate that the Kahn email had not been overlooked at all. Thirdly, on my reading of Mr Shaw’s witness statement he was not contending that the additional Udvardy/Knuckey material had been overlooked.

[81]Mr Turnbull’s witness statement filed for the purposes of the SDT proceedings [W1/tab 3] was considerably less expansive than Mr Shaw’s and merely sought to rely on the July emails in support of the proposition that the Kahn email had been ‘overlooked’ (paragraphs 49-52). But when he was cross examined at the SDT hearing it became clear that Mr Turnbull had not in fact overlooked this email [A3/tab 3/30-32]: he did not believe that it was determinative although (at least on one view of his evidence) he agreed that it showed that Mr Logue probably was no longer living at the Park Avenue apartment. Mr Turnbull also agreed that there was a conference call with Mr Wiesner and Mr Shaw during the course of which it was ‘highly probable’ that the Kahn email was discussed. Given the timing and context of the email setting up the conference call, it seems to me that the Kahn email must have been on the agenda.

[82]The evidence Mr Shaw gave in cross examination is less easy to summarise because he did not always furnish direct answers to Leading Counsel’s questions. He accepted that the information contained in the Kahn email should probably have been in his first affidavit although ‘actually the evidence would have been quite helpful to us if we properly analysed it’, and it ‘wasn’t a particularly relevant issue’ [A2/tab 2/99-100]. When Mr Wardell returned to the issue the following day [A2/tab 3/27-39] Mr Shaw stated that he could not recall reading the email amongst the hundreds he received every day but accepted that he may have glanced at it. He claimed that Morgan J had been told that Mr Logue was no longer living in New York and was now in London, although he then immediately accepted that the Court was informed that the New York apartment was Mr Logue’s last known address. On the other hand, Mr Shaw appeared to accept in cross examination that he knew that Mr Logue was no longer physically present in New York [A2/tab 3/37/line 20; A2/tab 3/39/lines 15-18]. That said, the only piece of information which he claimed was lodged in his brain was that Mr Logue could not be served in New York, and he had therefore to be served in London. The information about moving out a year beforehand and the ‘phone being disconnected did not lodge in his mind. Mr Shaw also accepted that he could not have overlooked the entirety of the Kahn email.

[83]I have already referred to paragraph 165 of Mr Shaw’s witness statement filed for the purposes of the SDT proceedings, but I need to return to one aspect of it which acquired particular prominence in the SDT’s Findings. It is clear from paragraph 165 that at the time Mr Shaw’s third affidavit was sworn, which was on 12th May 2010, he was aware of the fact that Mr Logue’s ‘phone number at the New York apartment was no longer in service. Mr Wardell latched onto this in cross examination and put to Mr Shaw that the only source of his information was the Kahn email. Mr Shaw’s answer was:

“you may or may not be right, I really don’t know [A2/tab 3/35/line 23]”

Mr Dutton suggested that Mr Shaw was clearly ‘bounced’ by the question and did not do justice to it, not least because there may have been an alternative source of this information which was privileged. I do not understand that to have been Mr Fenwick’s submission to the SDT. However, what might have been submitted was that, although Mr Wardell was quite entitled to make what forensic advantage he could about a witness statement sworn in October 2012, by that stage Mr Shaw clearly did know about the Kahn email and might have been doing himself a disservice in trying (and failing) to put himself back into the mindset which he had when the events covered by paragraph 165 were occurring, namely when the third affidavit was being prepared in May 2010.

[84]I fully accept the possibility that Mr Shaw was simply unprepared for the extremely detailed and persistent cross examination which he faced from Mr Wardell, and that he did not do full justice to himself when he gave evidence before the SDT. Bending over backwards to help Mr Shaw I can see that when he was throwing his mind back to the events occurring nearly three years beforehand he might not have been taking sufficient care to differentiate between what his firm knew on the one hand and what he knew on the other. However, unless Mr Dutton is able to satisfy me that the cross examination was unfair or oppressive, the existence of this possibility scarcely avails Mr Shaw on this appeal. The answers he gave under cross examination constituted a significant shift of ground when compared with his witness statement. On any view, Mr Shaw appears not to have overlooked the whole of the Kahn email and on one view he overlooked none of it.

[85]Turning now to the Udvardy email, my understanding of Mr Shaw’s witness statement filed for the purposes of the SDT proceedings was not that it had been overlooked (see paragraph 69.3.3) although his case in oral evidence was not entirely clear [A2/tab 3/45/lines 16-17]. Mr Shaw was cross examined on the significance of the term ‘undeliverable’ which does appear in the Udvardy email. However, further cross examination on the phraseology ‘undeliverable as addressed’,which was based on the tracking information from the US postal service [C2/638], a document which Mr Shaw was highly unlikely to have seen, was probably founded on a false premise [A2/tab 3/42-44]. On the other hand, the statement in paragraph 47(ii) of Mr Shaw’s first affidavit that documents had been returned from the New York address as ‘undelivered’ could only have emanated from Mr Udvardy. Mr Shaw accepted that his first affidavit contained no express mention of the Udvardy email which suggested that Mr Logue was no longer living at the New York apartment, whereas the reference to ‘considerable difficulties’ in paragraph 47(i) of that affidavit could only have been to Mr Udvardy. Mr Shaw further accepted that the adjective ‘considerable’ was hyperbole [A2/tab 3/54/lines 8-10].

[86]As for the Knuckey material, the issue was whether Mr Shaw had deliberately suppressed the existence of the conversation Mr Turnbull had with him on 15th April 2010 [C2/667]. Again, Mr Shaw’s witness statement did not appear to suggest that he was unaware of this conversation (paragraph 69.3.4), although as I have already pointed out he was not copied into the relevant email. I have looked carefully at the transcript of Mr Shaw’s cross examination (in particular [A2/tab 2/90-102; A2/tab 3/10-62] but nowhere is there any clear acknowledgement by Mr Shaw that he had in mind the 15th April Turnbull/Knuckey conversation, as opposed to the 16th April conversation, in relation to paragraphs 47(i) and (ii) of his first affidavit. Mr Wardell suggested to me that Mr Shaw’s answer at [A2/tab 3/39/lines 16-18] is a clear reference to the 15th April conversation but I cannot agree. On the other hand, Mr Turnbull did appear to accept that Mr Shaw knew of this first conversation [A3/tab 5/47-48]. Furthermore, there is force in the contention made by Mr Wardell that Mr Shaw must have had this first conversation in mind at the time he swore his second affidavit which was intended to give the Court the full picture as regards the information coming from Mr Knuckey.

[87]In setting out the sequence of events and evidence in this way, I recognise that I am considerably simplifying the complexity of the matter and am in danger of making it appear that Mr Shaw in particular clearly had relevant material in or near the forefront of his mind and then deliberately decided to suppress it. This is not the impression I am seeking to give; what I am seeking to do is to condense the voluminous material which was placed before me in order to present a reasonably economical narrative in the context of a Judgment which cannot be permitted to range over hundreds of pages. I should make clear that the evidence was not free from nuance or differential interpretations, and that Mr Fenwick’s closing submissions on the evidence were both intricate and copious. I focus on his submissions at this stage before turning subsequently to the way in which the appeal was advanced before me.

[88]Mr Fenwick advanced a series of submissions of a general nature as to the pressures under which commercial solicitors operate when making without notice applications of this sort in often rushed circumstances, the need to avoid hindsight judgments, the impact of legal professional privilege, and the good character of his clients. I will be addressing these submissions in the context of the first ground of appeal. But in relation to the Kahn/Udvardy/Knuckey material, Mr Fenwick submitted as follows:• paragraph 8 of Mr Shaw’s first affidavit was factually accurate (see paragraph 156.54 of the SDT’s decision).

• it was unclear where Mr Logue was domiciled (paragraph 156.55).

• the Court was accurately appraised of the Knuckey investigations (paragraph 156.56).

• his clients accept that the failure to disclose the information in the Kahn email was an omission on their part, although the Appellants were entitled to conclude that Mr Logue was evading service (paragraph 156.57).

• in any event, there was no deliberate attempt to suppress relevant information: ‘it would have been quite easy to have overlooked the relevant part of the Kahn email as it had been one email amongst many others and 16 days had elapsed between the date on which it was sent and the time that the First Respondent had sworn his affidavit … Mr Fenwick asserted that it would be quite impossible for the Tribunal to be satisfied that the First Respondent had remembered the email at the time that he had sworn his affidavit and then decided to deliberately fail to mention this to the Court’ (paragraph 156.58).

• in paragraphs 40-62 of his written note on the evidence [A4/tab 2], Mr Fenwick made a series of detailed submissions on this material directed in particular to demonstrating that the Appellants did not have it at the forefront of their minds for clear and understandable reasons, and that there was absolutely no intention to suppress anything. For example, as regards the Knuckey ‘phone call of 15th April, the reason why it was not mentioned was because it did not feature in Mr Knuckey’s notes of the conversation with Mr Logue which took place the following day (see paragraph 62(d)).

[89]On my understanding Mr Fenwick put in issue both limbs of Twinsectra although he appeared to place greater emphasis on the second, subjective limb. As I have already pointed out, the issue of subjective dishonesty and/or deliberate suppression of evidence was inextricably bound up with the issue of what Mr Shaw knew.

Non-Disclosures in relation to Candy/CPC

[90]Candy/CPC was a client of Stewarts Law in the UK and of Jones Day in the US. It was common ground that Candy/CPC was funding the litigation in this jurisdiction between 22nd April and 21st May 2010, although what happened both before and after these dates was in dispute. The Appellants’ case was that Candy/CPC did not pay any fees, save Counsels’ fees, after 21st May (and only then to ward off an application being made against Candy/CPC under s.51 of the SCA 1981), and that a CFA was entered into with the Liquidating Trust on 27th May [C4/1411-1425]. As for Counsels’ fees, a bill for their fees covering the period 18th May 2010 to 2nd July 2010 was not paid by Candy/CPC until February 2011 (it is unclear whether Counsel were paid for their attendance at the hearing before Roth J; and, if not, why not). Paragraph 70 of Mr Dutton’s Reply gives a somewhat unclear and convoluted explanation regarding this – on my understanding, there was never any question of Counsel agreeing to act on a CFA, and the fact that Mr Logue was keenly contemplating going after Candy/CPC for his fees has nothing to do with Candy/CPC paying Counsels’ fees.

[91]An issue arises as to the nature of the Candy/CPC retainer, and my attention was drawn to the letter from Jones Day dated 22nd April 2010 [C2/732]. This was addressed to the Liquidating Trustee and confirmed that ‘our clients’ would amongst other things fund the trustee’s costs of pursuing enforcement proceedings before the High Court in London. Somewhat surprisingly, the clients were not named in the letter but their identity is quite clear from surrounding evidence. As soon as the Liquidating Trustee had received that assurance, he counter-signed Stewart Law’s retainer [C2/735]. I draw attention to these materials because Stewarts Law have sought to give the impression that there was no binding commitment by Candy/CPC to pay the legal costs consequent on the application for the Freezing Order and that their munificence was nothing other than a ‘pure gift’, but I remain deeply unimpressed by this speciousness. Clearly, as any commercial solicitor however hard-pressed would have known, Candy/CPC was legally bound to pay the costs referable to the application: the consideration for the contract was the Liquidating Trust acting to its detriment in authorising the making of the application.

[92]There was also considerable dispute between the parties regarding the nature of Candy/CPC’s commercial interest in the outcome of the proceedings in this jurisdiction. I propose to take this point fairly briefly. Stewart Law’s case is that its client was concerned about ‘tainted funds’: in other words, that the balance of the purchase price on the apartment at One Hyde Park might be derived from a source which could place the recipient in breach of the anti-money laundering regime. There is some contemporaneous documentary evidence which supports that proposition, notwithstanding its apparent implausibility – at least, as the sole reason for agreeing to expose itself to this level of litigation risk. Candy/CPC could have obtained the requisite degree of comfort by other means, and this alleged concern does engender the corollary inference that Candy/CPC was intending to share in confidential information gleaned from Mr Logue through his having to provide an affidavit of means under compulsion. However, this is not an irresistible inference and the point made by Mr Shaw at paragraph 45 of his first witness statement filed for the purpose of the SDT proceedings [W1/tab 2] meshes with the known chronology. On the other hand, there is a considerable body of evidence, some of which is set out in the Appendix to this Judgment, which strongly indicates that Candy/CPC’s concern went considerably beyond the anti-money laundering issue. Had judgment been obtained against Mr Logue then Candy/CPC would have been entitled to forfeit the deposits he had paid (see clause 27 of the Agreement for the Lease, [C1/390-391]), and would have benefited from the increase in the value of the apartment over the intervening period.

[93]During the course of his cross examination Mr Shaw advanced a slightly different explanation for Candy/CPC’s interest in this litigation, namely that it wanted some sort of assurance from the Liquidating Trust, albeit one of a non-binding nature, that it would not take enforcement action against Mr Logue’s apartment (see paragraph 98 of Mr Wardell’s Skeleton Argument). This was completely implausible, as Mr Shaw was almost constrained to accept [A3/tab 4/8/lines 14-15]. It was also Mr Logue’s case that Stewarts Law sought deliberately to conceal Candy/CPC’s interest in this litigation, but it is unnecessary for me to comment on that matter because the SDT made no finding on that basis.

[94]Mr Shaw’s first affidavit sworn on 28th April 2010 made no reference to the interest or involvement of Candy/CPC. Instead, paragraph 56 at [C3/1026] under the heading ‘Cross Undertaking as to Damages/Financial Position of the Liquidating Trust’ stated that the assets of the Trust were limited to $135,000 in cash together with two properties in the Bahamas. Viewed objectively, I cannot accept that this gave full and frank disclosure of the position; viewed subjectively, it would also constitute deliberate suppression of relevant facts unless Mr Shaw was honestly of the view that the financial involvement of Candy/CPC was legally irrelevant to the issue of fortification of the cross undertaking.

[95]Unsurprisingly, the issue acquired an even sharper profile during the course of the without notice hearing itself. Morgan J asked about the cross undertaking as to damages as set out in the draft Order which he was being asked to make, and he observed:

“But I should not reject it or require it to be fortified in a case of this kind. This is similar to the case of an office holder pursuing people who owe money which should then be available for distribution to creditors [C3/1075]”

[96]Mr Onions QC had just told the Court that ‘it is simply the assets of the trust that will be available’. It is unthinkable that he would not have made that representation had he known of the true position. In my view, simply putting the matter in these terms serves to demonstrate the materiality of the information which was withheld from the Court.

[97]Mr Shaw’s explanation in his witness statement for failing to disclose(a) the commercial interest of Candy/CPC in the outcome of the proceedings (however that interest be characterised), and

(b) the fact that Candy/CPC was bankrolling the litigation, is set out at paragraphs 84-103 of his first witness statement filed for the purpose of the SDT proceedings. I confess that I have not found these explanations easy to follow, nor have I been remotely persuaded by Mr Fenwick’s submissions advanced before the SDT or Mr Dutton’s submissions advanced before me. It is convenient to address all of these compendiously at this stage.

[98]Mr Shaw accepts that the Candy/CPC commercial interest could, with the benefit of hindsight, be seen as relevant to the Court’s assessment of the evidence of Mr Candy which is directly relied on in paragraph 27 of his first affidavit. As Mr Shaw himself puts the matter, ‘I could have gone on to explain his involvement in the matter in more detail … in order to make the Court aware that the information provided by Mr Candy may have been coloured by that dispute’ (paragraph 86, [W1/tab 2]). Mr Shaw’s explanation was that this did not occur to him at the time, and that most of the information attributed to Mr Candy was substantiated by other sources. Additionally, although this was a point which emerged more through legal submission, the Liquidating Trust may have believed that it had good grounds for pursuing a claim against Mr Logue regardless of any overlapping motives or grounds held by a third party.

[99]I remain unimpressed by these explanations although I can see that the matter is not entirely free from doubt. That said, any doubt dwindles to virtually zero if the conclusion is reached that Candy/CPC wanted to engineer a state of affairs whereby the deposits paid by Mr Logue could be validly forfeited. I emphasise the conjunction if because, when I come to consider the SDT’s core Findings and reasons, it becomes apparent that no such clear conclusion on this issue was ever reached. In any event, I should also emphasise that even had such a conclusion been attained it would not inevitably follow that Mr Shaw was subjectively dishonest.

[100]The issue is less free from doubt in relation to the funding issue. Mr Shaw’s states that ‘my view at the time, and it remains my view, is that the existence of this informal arrangement was not a relevant factor that ought properly to have been disclosed’ (paragraph 99, [W1/tab 2]). I have already indicated that this represents a complete misapprehension of fairly basic legal principles. Further, Mr Shaw could not properly hide behind the fact that the identity of his other, funding client may well have been confidential (see paragraph 42 above), nor do I see any merit in the argument that there is or may be a difference between professional funders and pure funders within the context of s.51 of the SCA. Fortification of the cross undertaking raises separate questions from s.51; and, in any event, I note that as soon as a s.51 application was threatened in early 2011, Candy/CPC paid up without demur.

[101]Looking at the issue in the round, it seems fairly clear that Mr Shaw had a whole host of reasons for not wanting to disclose the Candy/CPC involvement either to Mr Logue or to the Court: as regards the former, that would have given him every opportunity to launch a robust counter-offensive, and as regards the latter, that would have dispelled the suggestion that the Liquidating Trustee was acting solely for the benefit of the creditors, and would have strengthened the case for fortification of the cross undertaking. It might also have caused the Court to look more closely at the merits of the Liquidating Trust’s case. Had either Mr Onions or Morgan J known of the true position, it is not difficult to imagine what their reaction would have been. Certainly as regards the funding issue, I have no doubt but that the first limb of Twinsectra is satisfied, and it therefore follows that no reasonable SDT could have thought otherwise. Notwithstanding my observation at the commencement of this paragraph regarding Mr Shaw’s likely state of mind, I should not be interpreted as having concluded that the second limb of Twinsectra must also have been fulfilled.

[102]I have not covered the evidence Mr Shaw gave under cross examination at the SDT hearing. It is convenient to do so when I come to consider what happened at the fortification hearing on 21st May 2010.

Misleading Information Regarding Allegations of Fraud in the US Proceedings

[103]I consider that I am able to address this quite briefly at this stage; Roth J has covered it extremely fully in his Judgment delivered on 23rd July 2010 (

[2010] EWHC 1864 (Ch)

). Furthermore, Mr Wardell accepted in oral argument that his client would not have pressed this allegation had it not been for the other, more serious, matters.

[104]The essence of the case against the Appellants is that the Court was misled at the without notice hearing because the affidavits filed by Messrs Wiesner and Evans were contending that the claim against Mr Logue in the US proceedings was founded on actual as opposed to constructive fraud. Aside from the obvious imperative to ensure accuracy in these matters, the distinction is clearly an important one inasmuch as the greater Mr Logue’s fraudulent intent, the greater would be the risk of dissipation of assets were he to learn of the quantification hearing.

[105]The manner in which Mr Logue advanced his case against the Appellants was that they deliberately overstated the gravamen of the US proceedings by(i) suppressing the fact that the Liquidating Trust had carried out no actual investigation into the issues, and that the claim was founded on pleaded allegations alone, and

(ii) failing to draw attention to Mr Logue’s possible defences to the claim, in particular that he might have given reasonable value for the January 2005 payment and that the settlement agreement was a bona fide compromise brokered by lawyers with full knowledge of the charges made by their respective clients.

[106]I was taken by Mr Wardell to the contemporaneous documentary evidence indicating that the Appellants were, or ought to have been, well aware that the Liquidating Trust was not in a position to vouch the truth of the case against Mr Logue (although I infer that the professional obligations of lawyers in the US must be broadly similar to those practising in this jurisdiction, and that a case cannot be pleaded unless there is some basis for the contentions being advanced). I also recognise that, although the Appellants were hardly experts in US Federal Bankruptcy law, they must have well understood the difference between actual and constructive fraud in this context.

[107]On the other hand, it should be recognised (and, as I will be observing in due course, should have been recognised by the SDT, at least to the extent of expressly genuflecting to the point in its reasons) that this was an area where the US lawyers had a key input. Although there were arguably misleading statements about the merits of the Liquidating Trust’s claim made in the affidavits of Messrs Wiesner and Evans, these were drafted by Stewarts Law (and clearly not by Mr Shaw) on instructions from the Americans. Moreover, the original draft of Mr Wiesner’s affidavit [C2/756-782] did draw a distinction between actual and constructive fraud (see paragraphs 28 and 30) but this was collapsed by Mr Wiesner, and not by Stewarts Law, in the tracked changes version which he returned.

[108]I highlight this one matter although I recognise that there are others. I also accept that Mr Wardell’s Skeleton Argument, as elaborated in oral submission, demonstrates that this was sufficient in the contemporaneous materials to sound clear warning bells in Mr Shaw’s mind had he been paying attention to what the latter described in evidence before the SDT as the ‘granular detail’ of the case. But there is a clear indication that he did not, or rather left the minutiae to his team and to Counsel. To my mind, Mr Logue’s case against the Appellants was at its weakest on this particular issue, a factor which I will need to bear closely in mind when I turn to address Grounds 3 and 5.

Disclosure of Confidential Information

[109]The facts in relation to this allegation were not substantially in dispute, and the SDT made no finding of dishonesty.

[110]Mr Logue was required by the without notice Order to provide a statement of his assets; this is, of course, standard practice. Mr Logue complied with this Order through his solicitors providing information between 6th and 8th May 2010, and he provided an affidavit on 10th May [C3/1188]. Pursuant to CPR r.31.22 the Liquidating Trust and its advisors were impressed with duties of implied confidence in relation to this information: in short, it was axiomatic that it could not be disclosed to third parties. Yet it appears from Mr Turnbull’s email timed at 2:25pm on 10th May 2010 [C3/1171] that the information contained in Mr Logue’s solicitors’ letters was transmitted to two lawyers at Jones Day who were included in a group email sent to a number of others who did have a legitimate interest in this material. Mr Shaw was not copied into it.

[111]Mr Wardell points out that Mr Turnbull’s email was sent with Mr Shaw’s approval (see paragraphs 142-145 of [W1/tab 2] and paragraph 37 of [W1/tab 3]). His contention was that Jones Day were legitimate recipients of this information as ‘part of the Trustee’s US legal team.’ Yet elsewhere in his first witness statement filed for the purposes of the SDT proceedings (see paragraph 85) Mr Shaw made clear that Jones Day’s role was limited to advising Stewarts Law and the US Attorneys as to ‘US law and procedure’ – this must be a reference to bankruptcy law, which I understand to be the specific expertise of the two Jones Day lawyers I have previously mentioned. In that limited role it is difficult to see what interest Jones Day had in this information. Furthermore, it ought to have been obvious to Mr Shaw that Jones Day were wearing two hats and, at the very least, a risk arose that the confidentiality of this information would not be safeguarded in that it might be transmitted to Candy/CPC (in the event, this risk did not mature).

[112]Mr Wardell sought to go further and to suggest that it was hardly surprising that this information was passed on to Jones Day, with a view to onward transmission to Candy/CPC, because that was the principal (or, at least, an important) reason or motive for applying for the freezing order in the first place. I have already commented on this issue, but additional support for Mr Logue’s justifiable suspicions is to be found in Stewarts Law’s letter to Withers dated 30th July 2010 [C4/1711] in which it was stated:

“CPC decided to assist the Liquidating Trust to determine through the disclosure provisions in the application for the Freezing Order whether the funds to be provided by Mr Logue, through Hayden, to PGGL were tainted and could not in such circumstances be accepted.”

[113]I can see that this could be interpreted as cutting both ways (on the one hand, if it is to be taken at face value, it supports the tainted funds thesis) but it does constitute reasonably clear evidence that Candy/CPC were hoping or expecting to learn about Mr Logue’s assets if a Freezing Order were made. That said, it should be recognised that there is no available evidence that either Jones Day or Stewarts Law ever passed on any confidential information to Candy/CPC, although those of a suspicious mind might point out that if such evidence existed it would be cloaked by privilege. The SDT proceeded on the basis that there was no evidence of onward transmission, and (although neither Counsel drew this to my attention) concluded that allegation 4.3 (namely, the allegation that the application for a Freezing Order was pursued with the avowed motive that information about Mr Logue’s and Hayden’s assets should be passed onto Candy/CPC) was not proved to the requisite standard (see paragraph 156.77).

[114]Mr Fenwick’s submission on these matters was there had been ‘an arguable mistake’ which was venial, because Jones Day were assisting the Liquidating Trust. He also submitted that the information would cease to lose any implied confidence attached to it when it passed into the public domain at the fortification hearing (see paragraph 156.64).

Misleading Statements at the Fortification Hearing

[115]This issue merits detailed examination because it gives rise to particular concern.

[116]Mr Logue gave an early indication of his intention to apply to set aside the without notice Order of Morgan J, but given the time estimate for the hearing and the obvious need to prepare for it there would be some delay. In the interim, Mr Logue applied on notice to fortify the Liquidating Trust’s cross undertaking as to damages, which is a fairly standard litigation strategy in this sort of case. The Liquidating Trust’s defence to the application was that(a) it did not have any significant assets (I have previously specified these), and

(b) to require fortification would be to stifle a legitimate claim. It is in this context that the potential relevance of the existence of an entity funding the litigation becomes, or ought to have become, apparent.

[117]Although Mr Logue was put on notice of the proceedings shortly after they had been served on his solicitors, Gordons, on 30th April 2010, it is trite law that the without notice phase continued until the moment the application for fortification of the cross undertaking was called on before Norris J on 21st May. At that point the duty of full and frank disclosure ceased, but those advising the Liquidating Trust owed pre-eminent duties not to mislead the Court. All of this is fairly elementary, but I set it out in the light of Mr Dutton’s submissions on paragraph 156.78 of the SDT’s decision.

[118]Mr Logue’s complaint against the Appellants possessed a number of aspects. First, he contended that the Appellants were in breach of their duties of full and frank disclosure as regards the evidence filed for the purposes of the fortification hearing (i.e. during the without notice phase). Secondly, it was said that ‘Mr Shaw and/or Mr Turnbull’ dishonestly permitted Leading Counsel to make misleading statements to the Court regarding the third party funding position in the knowledge that such statements were incorrect (see paragraph 5.4 of the List of Issues). Thirdly, it was contended that the Appellants or either of them failed to correct any incorrect or misleading statement or statements as soon as they should have done.

[119]On 20th May 2010 Mr Shaw filed his first witness statement for the purposes of the fortification hearing [C3/1300]. I have read this statement with appropriate care. It is plain that Mr Shaw’s basic thesis was that the Liquidating Trust only had limited assets and that to require fortification would stifle a genuine claim. I am particularly troubled by footnote 12 at [C3/1312] which states that ‘the US Attorney’s [sic] for the Claimant are acting on a contingency fee basis’. Although this statement was correct, the footnote was made in the context of a general assertion that the Trust was (by implication, otherwise) meeting its legal fees from its limited cash reserves. Furthermore, at the time Mr Shaw was giving his witness statement Candy/CPC was continuing to foot the bill for Stewarts Law, and it would continue to do so for Counsel until early July.

[120]At the hearing before Norris J, Mr Wardell did some basic arithmetical calculations and could see that there was insufficient cash at hand to pay for the panoply of lawyers arrayed against his client. He then submitted [C3/1341]:

“It has not been suggested that they are on a CFA or that they were having to defer their fees. Their fees will no doubt already exceed the cash in the bank, and we are entitled to ask how they are being funded. If someone is paying them, there is no reason why that person or persons should not put up security for costs …”

[121]It is true that Mr Wardell did not add – ‘and fortify the cross undertaking’, but on my understanding of his oral argument he was treating the two applications as congruent for this purpose [C3/1336/lines 9-15], although Norris J later came to treat them as distinct. Mr Wardell’s submission prompted Mr Onions to take instructions, and the evidence is that he did so from Mr Turnbull. Having done so, Mr Onions told the Court this [C3/1350/lines 13-20]:

“And I am also instructed that there is no third party funding these proceedings. MR JUSTICE NORRIS: Are you instructed as to how they are funded? MR ONIONS: Yes, my Lord, using the $135,000. Those instructing me are considering the possibility in the future of a CFA, but that is not the position at the moment. Those in the US are acting on a contingency fee …”

[122]Norris J asked a straightforward question and received a straightforward answer. The learned Judge was not interested in any sort of factitious distinction between a professional and a pure funder; he simply wanted to know whether there was anyone paying the legal fees. He was told that there was not. Had Mr Onions known the true facts he would have given the Court an entirely different answer. Furthermore, although much has been made in Mr Dutton’s further written arguments concerning the role of counsel, the fact that Mr Onions needed to seek and obtain instructions from his solicitors regarding third party funding during the course of the hearing conclusively proves that he had not been instructed of the position beforehand. If the Appellants, in particular Mr Shaw, were in any doubt as to their obligations in this respect, they should have sought advice from Leading Counsel. I must say that their failure to do so is extremely surprising.

[123]Further explanation as to what happened before Norris J is provided by Mr Turnbull’s second witness statement filed for the purposes of the SDT proceedings [W1/tab 13]. Mr Turnbull’s recollection is that Mr Onions asked him during the course of the hearing whether the funds were coming or came ‘out of cash’ (the tense is not clear from Mr Turnbull’s witness statement), and he said ‘yes’ or nodded in the affirmative (paragraph 6). Mr Turnbull was then unsure whether he had answered Mr Onions’ question correctly ‘since it was not entirely clear to me whether it related to existing or future funding’ (paragraph 7) and he was troubled that the Court may have been given the wrong impression. I must say that his instincts were self-evidently correct. Mr Turnbull confirmed in his evidence before the SDT that he felt uncomfortable after he had given these instructions to Mr Onions [A3/tab 5/122-123].

[124]Mr Shaw arrived in Court after the exchange between Norris J and Mr Onions had taken place but before Judgment was given. Mr Turnbull’s evidence is that he gave Mr Shaw two notes regarding this exchange: the first read, ‘Counsel told Court legal fees coming from cash’ (paragraph 9 of his second witness statement); the second read, ‘Counsel told Court no third party funder’ (paragraph 10 of his second witness statement). The fact that Mr Turnbull felt it right to scribe two notes must give some indication as to his level of concern. Mr Shaw’s evidence to the SDT was that he had forgotten both notes when he came to return to the issue in the summer of 2010. In all the circumstances I find that extremely surprising, particularly in the light of the final sentence of paragraph 11 of Mr Turnbull’s second witness statement and, I regret to say, ordinary common sense.

[125]Returning to the course of events before Norris J on 21st May 2010, the learned Judge proceeded to give a brief extempore Judgment without rising for a break. In Mr Shaw’s presence and hearing Norris J said this [C3/1356/paragraphs 12 and 13]:

“The evidence on the other side is that the use of the fund for that purpose will have the effect of stifling the claim, because that is the fund out of which legal fees to pursue protective measures in this jurisdiction are currently being met, pending the putting into place of a possible CFA to continue the proceedings … I have of course to look beyond the mere cash fund and consider what else might be made available, whether there are others who could be prepared to stump up security for costs. So far nobody has done so …”

[126]I should add that it seems clear from paragraph 9 of Mr Turnbull’s second witness statement that Mr Shaw heard this from the Judge’s lips after he had read the first of Mr Turnbull’s notes (the position is less clear-cut in relation to the second note).

[127]There was extensive cross examination before the SDT as to exactly when Mr Shaw arrived at Court. It was Mr Wardell’s ambition to demonstrate that he was present during the initial stages between Mr Onions and Norris J. To my mind, it is clear that Mr Wardell would not have pressed this point had he known, or been told, that Mr Shaw was not present, and I have noted the vehemence of Mr Shaw’s answers in cross examination in this regard. The evidence is that Mr Shaw arrived shortly before Judgment was delivered: when he was asked how he could be sure of that, he said this [A3/tab 4/46]:

“Well I just do know because, had I been there throughout the submissions, at least when the subject matter of third party funding had been raised, the questions would have been directed at me, not Craig, and I would have given different answers.”

[128]This answer is particularly revealing for a number of reasons. First, it shows that Mr Shaw must be right about the timing of his arrival. Secondly, Mr Shaw’s acceptance that had he been there he would have given different answers demonstrates that the Court was given misleading information by Mr Turnbull. By this answer Mr Shaw was surely accepting that it was misleading to have informed the Court that the Liquidating Trust’s assets were effectively limited to the $135,000 (less the amount spent by the trustee on other matters); and, I would add, that there was or had been no third party funder standing behind the Claimant. I am choosing my tenses with care because if it was truly Mr Shaw’s position that a distinction fell to be drawn between past and future funding he would not have given different answers on this hypothetical basis (c.f. paragraph 156 of his first witness statement filed for the purposes of the SDT proceedings [W1/tab 2]). Furthermore, the same logic would appear to cover the distinction, which in my view is a synthetic one in the light of Norris J’s clear question, if not more generally, between so called pure and professional funders. In reaching this conclusion I am not overlooking Mr Shaw’s further evidence given under cross examination where he succeeded both in muddling the issue and contradicting himself in the space of one answer [A3/tab 5/64-65]:

“… there is a difference, a very big difference actually between pure funders and commercial funders when it comes to section 51. I won’t go into that but that’s not the confusion that occurred here. The confusion that occurred here was third party funding in respect of past costs, i.e. obtaining the freezing order and third party funding going forwards, relating to the discharge proceedings. And the application, as I understood it, for security for costs was in support of your client’s application for the discharge, all of which had been served on the same day which I think was the 18th May. So that’s where the confusion lies, it’s not in the definition of third party funding. And there clearly is a distinction between pure funders and commercial funders. I think the misunderstanding comes with regard to funding going forwards or not.”

[129]When Mr Wardell pointed out to Mr Shaw that Norris J had asked a precise question which related to the present state of affairs, Mr Shaw returned to his earlier theme [A3/tab 5/65]:

“I don’t disagree with you that there was a muddle and misinformation was given to the Court. It’s very, very regrettable that it happened. If I could’ve avoided it happening I would’ve avoided it happening. I wasn’t there, it wouldn’t have happened if I’d been there so it’s my fault, I should’ve been there but there we are, it happened”

[130]Mr Wardell also cross examined Mr Shaw on his first witness statement dated 20th May 2010 in which he stated at paragraph 26 that the Liquidating Trust’s legal fees were being paid out of its cash reserve. I agree with Mr Wardell that the answer he gave to the SDT was less than frank [A3/tab 4/43/lines 12-16]:

“Q. Well litigation costs and legal fees, anyone reading this would think that the Liquidating Trust was using and going to have to use its limited cash reserves to fund Stewarts Law and counsel, would they not? A. Not necessarily. I mean, I don’t specify which legal fees. It was used on some of those costs to cover legal fees in, connected with the English proceedings.”

Mr Shaw was apparently referring to disbursements in the US. I cannot accept that this is a remotely tenable interpretation of paragraph 26 of his first witness statement which clearly refers to Stewart Law’s fees.

[131]I have taken time to set out much, albeit not all, of the relevant detail surrounding what happened in front of Norris J if only to demonstrate the troubling nature of the picture which emerges from this material, including I have to say somewhat disingenuous and evasive answers given by Mr Shaw under cross examination. In view of Mr Dutton’s attempt to persuade me that the SDT’s findings were plainly wrong, I am clearly entitled to express a view about the strength of the underlying case against his main client. But, in doing so I should not be interpreted as coming to any definitive conclusion on the merits.

[132]If this material were not troubling enough, I have to say that my concerns were only magnified when Mr Wardell took me to the subsequent inter partes correspondence.

[133]On 2nd June 2010, Withers LLP wrote to Stewarts Law raising a number of matters including requiring clarification as to the precise position in relation to the sum of $135,000 and Stewarts Laws’ costs [C4/1437]. In particular:

“During the hearing Mr Onions QC informed Mr Justice Norris that this amount had been used in order to pay the legal costs to date … has it in fact been used to pay your legal fees as the Court was informed? If not, please explain how it has been spent and clarify how your client proposes to fund counsels’ fees and other legal fees in respect of the hearing of our clients’ application to discharge the Freezing Order.”

[134]On 9th June 2010 Stewarts Law replied [C4/1486]. At paragraph 14 it was stated, and I paraphrase, that the original fund of $135,000 had been substantially depleted to cover ‘ongoing legal fees and disbursements’ and that a further amount had been set aside for Counsels’ fees. As for the future, Stewart Law’s fees were now being covered by a CFA. Stewarts Law chose not to address Withers’ concerns regarding the information given to Norris J. This was a regrettable omission.

[135]On 19th July 2010 Withers wrote again to Stewarts Law [C4/1680] asking them to confirm whether ‘part of the trustee’s costs in this matter have been funded by Christian Candy’. Roth J’s Judgment was about to be handed down but Stewarts Law did not reply immediately, as I believe they ought to have done. Instead, there was a chasing letter from Withers dated 21st July requiring a response by 2pm the following day [C4/1684]. None was forthcoming. By paragraph 5 of his Order dated 23rd July 2010, Roth J ordered that ‘the Claimant shall disclose the names and addresses of any third party funders that have provided direct or indirect funding for the defence of the application to set aside the Freezing Order’.

[136]On 30th July 2010 Stewarts Law wrote in response to paragraph 5 of Roth J’s Order but without referring to the earlier correspondence. They pointed out that the short answer to paragraph 5 was that no funds had been provided by any third party for the defence of the application. That answer was correct as regards the solicitors’ fees which had been catered for by a CFA dated 27th May 2010 with effect from 24th May. As regards Counsels’ fees, this statement was incorrect: paragraph 70 of Mr Dutton’s Reply concedes that these were paid by Candy/CPC in respect of the period 18th May to 2nd July 2010, in February 2011. I have already said that the s.51 SCA 1981 point is a red herring, and it is extremely difficult to accept that the author of the letter dated 30th July 2010 could have thought that the $30,000 referred to in the penultimate paragraph on the first page would be sufficient to cover the fees of Leading and Junior Counsel over a six week period. In the event, we know that this amount was insufficient.

[137]The letter dated 30th July 2010 continued:

“Please note, although not relevant to the request for disclosure concerning third party funding for the defence of the application to set aside, it is the case that some of the Liquidating Trust’s initial costs incurred in investigating and obtaining the Freezing Order were provided by a third party, namely CPC … Much of the work required to prepare the case for the application for a Freezing Order was carried out in the US … however, funds were provided by CPC to cover costs incurred in the UK. It must, however, be pointed out that there was not and is no third party funding agreement in place between CPC (or any other third party) and the Liquidating Trust. CPC provided the assistance on a completely discretionary basis, free of charge, and no obligation or expectation of getting repaid. It was, in effect, a pure gift to the Liquidating Trust. … No direct or indirect benefit has or could have accrued to CPC in return for the assistance rendered, save that if Mr Logue’s evidence is accurate, there would appear to be sufficient ‘untainted’ funds available to proceed with the purchase of the property … In view of this, and because it also became apparent, on or about 18th May 2010, that Mr Logue and Hayden would in fact be proceeding with an application to set aside the Freezing Order, no further assistance, directly or indirectly, has been provided by CPC.”

[138]Mr Wardell was extremely critical of this letter, and frankly so am I. I confine myself to three matters. First, I am really struggling to understand how the retainer letter of 22nd April 2010, which I would add Stewarts Law must have wished would never see the light of day, could be characterised by anyone as ‘a pure gift to the Liquidating Trust’. Why Candy/CPC, with obligations to their shareholders, would ever have thought it right to distribute such largesse, with concomitant risks under s.51 of the SCA 1981, defeats me, as does the legal analysis underpinning this portion of the letter. This was a binding commitment by Candy/CPC to underwrite the Liquidating Trust’s costs in the UK and could only be withdrawn on reasonable notice to the trustee. Moreover, I agree with Mr Wardell that Candy/CPC would have been entitled to reimbursement by the Liquidating Trust had any costs been recovered from Mr Logue. Secondly, the assertion that ‘no direct or indirect benefit could have accrued to CPC’ defies common and commercial sense. Thirdly, aside from the question of Counsels’ fees, the letter gives the false impression that Candy/CPC’s involvement ceased on 18th May 2010. Candy/CPC funded the application before Norris J which took place three days later.

[139]Clearly dissatisfied with this response, on 5th August 2010 Withers wrote back saying, amongst other things [C4/1724]:

“We have reviewed a transcript of the 21st May hearing. At this hearing Mr Onions QC informed Mr Justice Norris that the Liquidating Trust’s funds to pay legal costs were ‘now less than $135,000 …’ Mr Onions QC also stated that he was ‘instructed that there is no third party funding these proceedings’. Mr Onions QC further informed Mr Justice Norris that the Liquidating Trust had been funding the UK proceedings ‘using the $135,000’ and that Stewarts Law ‘are considering the possibility in the future of a CFA, but that is not the position at the moment’. Your firm was aware that CPC had been providing substantial funding and assistance to the Liquidating Trust. Therefore, given that the Liquidating Trust had access to funding over and above the $135,000, it would seem that you were aware that the Court was being misled.”

[140]When this letter was put to Mr Shaw in cross examination, he explained that his ‘sensitivity’ concerned the applicability or non-applicability of s.51 of the SCA 1981 [A3/tab 4/17]. In my view, he was focusing on the wrong issue. Withers, with considerable ammunition to support them, were politely suggesting that Stewarts Law had misled the High Court, and a very careful and accurate response to that accusation was merited.

[141]The response came on 13th August 2010 [C4/1776]. Stewarts Law repeated the thoroughly bad point about Candy/CPC being a gratuitous funder. I suspect that by this stage Mr Shaw was trying far too hard to protect his clients’ position in relation to s.51. The letter continued:

“The way in which you have interpreted the words of Mr Onions does not fully accord with our recollection of what was discussed. Our understanding is that the Court was concerned to understand the availability of funds for defending the application to set aside. The Liquidating Trust had less than $135,000 in its account to meet future and other expenses, although it was made clear that it did have property assets in the Caribbean (albeit not in liquid funds). The unsecured creditors would not provide funding going forward, nor was there any third party funding available.”

[142]My reaction in Court when this letter was read out to me by Mr Wardell was somewhat intemperate, although I suspect that Mr Justice Norris would share some of these sentiments were he ever to read this Judgment. But to be fair to Mr Shaw I need to place any residual feelings I might now retain to one side and examine the available evidence with complete dispassion.

[143]Mr Turnbull was closely cross examined at the SDT hearing about this correspondence [A3/tab 5/124ff]. His answers are not altogether easy to follow because Mr Turnbull tended to adopt the tendency which he exhibited throughout his cross examination of interrupting Mr Wardell’s questions before they were completed. However, one does receive the sense that Mr Shaw took charge of the correspondence with Withers, that Mr Turnbull did at some stage express his concerns to Mr Shaw as to whether the Court had been misled, and that he may well have reviewed the transcript, but if he did he cannot recall when.

[144]Mr Dutton has put in issue the receipt by Stewarts Law of any transcript. I find this somewhat surprising in view of paragraph 157 of Mr Shaw’s first witness statement filed for the purposes of the SDT proceedings and the answer given by Mr Shaw at [A3/tab 4/67-68], including his admission that he ‘could see that the Court had been misled and I had to address it at that point and I did’. For the avoidance of any doubt, Mr Shaw accepted in cross examination that there came a point when he saw the transcript of the proceedings before Norris J, he married this up with the Judgment, and came to the conclusion that the Court had been misled [A3/tab 4/71/lines 20-23], or as he chose to characterise it, there had been a ‘misunderstanding’. This occurred in August [A3/tab 4/72/line 4]. To my mind, this must have been before 13th August since there is no other August correspondence in the bundles before me. I accept that the SDT made no finding on this issue, and I will be addressing in due course the significance of that, but in my judgment, and contrary to Mr Dutton’s submission to me, Mr Shaw must have seen the transcript before he wrote to Withers on 13th August. It follows that Mr Shaw did nothing to correct the misunderstanding on that date; instead, he chose to compound it.

[145]Mr Wardell pressed Mr Shaw as to what he did to correct the position. I was told that as soon as a s.51 application was threatened against Candy/CPC in January 2011 Mr Logue’s costs were paid immediately. Mr Shaw’s answers to Mr Wardell’s persistent questioning are revealing, and speak for themselves [A3/tab 4/72]:

“Q. But you are an officer of the Court and you are duty bound, if the Court has been inadvertently misled, you are professionally bound to make sure it is corrected. A. And it was corrected. I made sure it was corrected. I made sure that your client was not out of pocket. Q. But you never corrected- A. It was sorted out”

[146]I have re-read Mr Fenwick’s closing submissions on this issue as recorded by the SDT at paragraphs 156.65 and 156.66, but – with respect to his best efforts – I remain completely un-persuaded.

Misleading Information Regarding Mr Logue’s New York Apartment Provided in July 2010

[147]The evidence in relation to this issue also merits very careful attention.

[148]Mr Logue applied to set aside the without notice application on various grounds including that the Liquidating Trust had been in breach of its obligation of full and frank disclosure. For obvious reasons it was unnecessary for Mr Logue’s purposes to seek to allocate blame within the Trust or those advising it. One of the points Mr Logue took was that the Liquidating Trust had failed to disclose the information contained in Mr Kahn’s affidavit dated 30th April 2010; at that stage, Mr Logue had not seen a copy of the Kahn email. This application was heard by Roth J between 6th and 8th July 2010.

[149]Mr Shaw swore his seventh affidavit on 6th July [C4/1595]. This was directed to a number of issues including the suggestion that Mr Kahn had deliberately misdated his affidavit: the fax header produced automatically by the fax machine on the copy of the affidavit which was made available bears the date ‘04-17-10’. There has been some discussion about ‘backdating’ but, if anything, the fax header tends to suggest that the affidavit had been forward-dated. I should add that this issue was subsequently resolved in Mr Kahn’s favour in the sense that the error was not his but his fax machine’s, although this evidential nuance was not unearthed until after the seventh affidavit had been sworn.

[150]The material part of Mr Shaw’s seventh affidavit, paragraph 6, provided [C4/1595]:

“My firm was not aware of Mr Kahn’s affidavit or its contents but it is accepted that the Liquidating Trust should have had access to Mr Kahn’s affidavit prior to the ex parte hearing. I apologise on behalf of the Liquidating Trust for the fact that the Court was not made aware of the contents of Mr Kahn’s affidavit.”

[151]Paragraph 6 needs to be considered with some care because context and perspective is all. If (but only if) Mr Shaw deliberately misrepresented the position in his first affidavit served for the purposes of the without notice hearing, it would almost inevitably follow that his seventh affidavit contained a deliberate untruth. If, on the other hand, he did not, then this paragraph 6 would seem to be innocuous. As far as Mr Shaw would be concerned, on this hypothesis at least, the only reason for having to apologise to the Court on behalf of his clients was on the basis of the inference to be drawn from Mr Kahn’s fax header that the Liquidating Trust or those representing it in the US had seen the Kahn affidavit on 17th April 2010. Furthermore, on this hypothesis too (but not otherwise) the reference to the contents of the Kahn affidavit would also be unexceptionable. If, on the other hand, Mr Shaw deliberately misrepresented the position in his first affidavit, then the claimed ignorance of the contents of the Kahn affidavit would, as it were, be doubly misleading because there was no material difference between the affidavit and the email.

[152]After the seventh affidavit had been served, there was further email traffic between Mr Turnbull and Mr Wiesner which the Appellants chose to place in evidence before the SDT [C4/1585-1586]. Mr Wardell points out that the Appellants had been selective about the privileged material they sought to rely on, and I am inclined to agree. I have seen no evidence that the Liquidating Trust agreed to waive its privilege in these emails, and Mr Dutton did not seek to explain why the SDT had seen these documents and not others (although he did inform me during the course of his Reply that the disclosure of the 6th July emails was on Mr Fenwick’s advice). I raise this last point because at the end of the hearing Mr Dutton informed me that a partner at Stewarts Law had recently identified other emails passing between that firm and Mr Wiesner on and after 6th July 2010. I do not doubt Mr Dutton’s instructions, reiterated in his Reply document, but I cannot place any weight on materials which were not sought to be placed before the SDT and whose contents cannot be speculated about.

[153]At 20:32 on 6th July 2010 (I believe that this must be UK not US Eastern Standard Time) Mr Wiesner emailed Mr Turnbull with the news that Mr Kahn had solved the mystery on the fax dating issue: his fax machine produced a date 13 days behind. It followed that Mr Kahn’s affidavit dated 30th April was indeed signed on that date, which was after the without notice hearing. Mr Turnbull asked Mr Wiesner to provide Stewarts Law with an affidavit explaining the position. He also said:

“Please also make the point that you had no prior conversations with Mr Kahn about failed service.”

This request might be interpreted in one of two ways. Either in July 2010 Mr Turnbull had genuinely forgotten about the earlier Kahn or he was asking Mr Wiesner to depose to a fact which he, Mr Turnbull, knew to be untrue. The latter appears implausible.

[154]Mr Wiesner emailed back at 20:58 that evening stating:

“I cannot say that I had no prior conversations with Mr Kahn about failed service. I knew that the service failed, which is why we went hunting for Logue in England. I am happy to do the rest.”

[155]Mr Turnbull’s reply timed at 21:19 states:

“Our concern is that this knowledge should have been disclosed to the Court. When did you speak with Kahn? Did you discount the significance of what he told you because by the time of the conversation we already believed that Logue was in London? I do not recall instructing Knuckey on the basis that there had been a failed service in NY.”

Again, the more plausible explanation for this email is that in July 2010 Mr Turnbull had honestly forgotten about exactly what had happened in April. In fact, the reason for Mr Knuckey’s instruction was indeed that there had been a failed service in New York, but if Mr Turnbull did not believe that to be so this would have been a rather cack-handed lie to another lawyer who, as it happens, was making it clear that he wanted to tell the Court the truth. On the other hand, and as I shall be explaining, this email, and others, could be interpreted in a different way.

[156]At 21:50 on 6th July 2010 Mr Wiesner replied:

“I received an email from Kahn on about April 12. I exchanged emails with you and Jennifer O’Neill (as well as phone calls with Jennifer) around that time as to whether Logue had been served. Because Logue was no longer at his address we discussed hiring a skip tracer and an investigator to find him. I believed that everyone was aware at that time that Logue was no longer living at Park Avenue, which is why we were having those conversations. At that point an investigator was already at work in England and we believed he would be served.”

[157]Finally, at 22:22 on 6th July 2010 Mr Turnbull reverted to Mr Wiesner as follows:

“Thanks for the clarification. It looks like we have overlooked your email on 12 April and as a result need to deal with why this is not mentioned in your affidavit. In the circumstances, could you please provide us with an affidavit confirming that: 1. the alleged post-dating is wrong by reference to the test sheet. 2. you received an email on 12 April from Kahn confirming the matters set out in the affidavit. 3. you did not refer to the email in your first affidavit because by the time you swore your affidavit you believed as a result of information provided by Mr Knuckey that Logue was in London rather than NY and that the Trust’s belief that Logue was in London rather than in New York had been communicated to the Court. Thank you.”

Mr Turnbull confirmed in evidence that by the time he sent this email he had reviewed his saved emails and had located the Kahn email of 12th April [A3/Tab 5/76/line 5]. My interpretation of the evidence is that he had also spoken to Mr Shaw. Thank you.”

[158]It is at this stage that Mr Turnbull’s better judgment had clearly deserted him. Mr Wiesner had made clear that as far as he was concerned there had been no mistake or overlooking within his firm. Given that Mr Turnbull was accepting that Stewarts Law had erred, it was illogical, indeed misleading, to suggest that Mr Wiesner should correct the position and admit that he had erred. Furthermore, Mr Wiesner’s first affidavit had not covered these matters at all (although I suppose that it might be said that Mr Turnbull and/or Mr Shaw had forgotten that too), and more seriously the Court had been told in Mr Shaw’s seventh affidavit sworn that very day that Stewarts Law had not been aware of the Kahn affidavit or its contents. This statement needed urgent correction. The suggested explanation set out within bullet point three was problematic for the foregoing reasons and because if Mr Turnbull and/or Mr Shaw had troubled themselves to review Mr Shaw’s first affidavit it would have been apparent to them that emphasis was being placed on the fact that Mr Logue was evading service in New York and that, accordingly, there was a risk of dissipation of assets.

[159]It is clear to me that in the thirty-two minute period between these key emails the seeds of disaster were sown, and the professional careers of Messrs Shaw and Turnbull were placed in clear jeopardy. I appreciate that this was quite late in the evening and that it had been a long day, but at the very least we see evidence here of serious errors of judgment. On the face of things the Appellants’ instincts were to cover their own backs rather than to tell the Court the truth and apologise. Had they done so the discharge hearing might have been resolved more rapidly in Mr Logue’s favour – with all the concomitant grief in relation to Stewart Law’s CFA and the potential exposure of Candy/CPC to an application under s.51 – but these were or ought to have been collateral considerations.

[160]I return to the wording of Mr Turnbull’s 22:22 email – ‘it looks like we have overlooked your email on 12 April’. This was the fragment of evidence which both Appellants deployed before the SDT in support of their case that the Kahn email was overlooked at the time of the without notice hearing. I have made the point that earlier emails in this chain are well capable of being interpreted as supportive of the Appellants’ case, but the 22:22 email is more problematic. It is part of an email which gives rise to very considerable concerns. Mr Turnbull might have forgotten about the 12th April email in July (before he refreshed his memory about it), but it would be difficult for him to say that he had overlooked the Wiesner email on 12th April (I am not ignoring the use of the perfect rather than the pluperfect tense in the email itself) given all that is said in Mr Wiesner’s email timed at 21:50 and what is set out in bullet point 3. The latter is more consistent with Stewarts Law having overlooked the significance of the email rather than the fact of it having been sent.

[161]In the meantime, the proceedings before Roth J were going badly. The trial bundle only contains the transcript for 8th July and I have read that carefully. Unsurprisingly, the learned Judge was, as the Americans would say, fully onto the case. At [C4/1607] Roth J was critical of Mr Wiesner for not setting out in his first affidavit the recent attempts at service in New York. Specifically:

“MR JUSTICE ROTH: I know he does not say that he is evading service now. That is said by, I think, Mr Shaw. It deals with specifically the service that was attempted in New York in 2008 and it does not deal with the later attempt at service, but as an affidavit which expressly acknowledges the obligation of full and frank disclosure, I would have thought that any lawyer, albeit an American lawyer, would realise that this may be relevant. MR ONIONS: My Lord, the position is, I am instructed, that Mr Wiesner understood that the Court was going to be told that Mr Logue was in London, and in those circumstances did not consider that he had told Mr Shaw that the postal service had been returned as ‘undeliverable.’”

[162]Although the subordinate clause in Mr Onions’ reply to the learned Judge is difficult to follow, the main part of this sentence tracks bullet point three in the 22:22 email, and in my view was incorrect. Furthermore, although judicial concerns were directed at Mr Wiesner, these were no doubt predicated on what had been said in Mr Shaw’s seventh affidavit that his firm was not aware of the Kahn affidavit or its contents. By 8th July Mr Turnbull knew that to be incorrect, but he did nothing to correct, as opposed to perpetuate, that error in giving the instructions which he did to Leading Counsel.

[163]The need for urgent correction of the position ought to have become acutely obvious to Mr Turnbull in the light of the following judicial observations [C4/1608-1609]:

“Clearly Mr Shaw would not have done that [depose to paragraph 47(ii) of his first affidavit] if he had known, which I fully accept he did not because he was not told, about what had happened with service. … To rely on that as supporting the proposition that there are good grounds to suppose Mr Logue is seeking to evade service without telling the Court that, on the other hand, what happened on the attempted service does seem to me to be withholding material evidence. I accept Mr Shaw did not know that, but to say that it is not material and it therefore need not have been placed before the Court and it does not shed a different light upon what he has said about Mr Logue’s attempt to evade service, I find that very hard to swallow”

[164]This ought to have set the alarm bells ringing very loudly indeed. Roth J, equipped only with Mr Shaw’s seventh affidavit, was expressly exonerating the English solicitors and heaping all the blame on Mr Wiesner, and Mr Turnbull was in Court at all material times.

[165]Mr Shaw’s eighth affidavit was not sworn until after the hearing before Roth J had concluded and judgment was reserved. I have commented on the need for the urgent correction of the seventh affidavit, and in my view no satisfactory explanation has been given for the delay.

[166]The eighth affidavit served a number of purposes, one of which was to provide ‘further clarification’ of Mr Kahn’s fax dated 30th April 2010. It appears that Mr Shaw’s primary ambition was to prevent serious adverse inferences being drawn against the Liquidating Trust from the date on the fax header. Paragraph 15 of the affidavit reads [C4/1655]:

“I understand from Mr Wiesner that despite not receiving the fax on 17th April 2010 he was told by Mr Kahn in mid-April 2010 of the facts set out in Mr Kahn’s affidavit dated 30th April 2010. I am told by Mr Wiesner that the reason why he did not mention this in his first affidavit is because he thought it was sufficient that the Court had been told that it was believed that Mr Logue was by then in London.”

[167]This was untrue. The first sentence contains a mealy-mouthed explanation, and on the face of things it is an almost irresistible inference that this was deliberate. Mr Wiesner was not given this information orally by Mr Kahn on an uncertain date in mid-April 2010; he received an email on 12th April which was forwarded to Stewarts Law twice and then formed the subject-matter of a conference call. Mr Shaw was not suggesting that Mr Wiesner had overlooked what he had been informed by Mr Kahn; rather, he was suggesting that Mr Wiesner took a deliberate decision not to appraise the Court of this information because he thought it would be sufficient that the Court had been told that Mr Logue was in London. But the email timed at 21:50 on 6th July [C4/1585] is inconsistent with Mr Wiesner possessing that belief, and we know from bullet point 3 in Mr Turnbull’s email timed at 22:22 that the source of this retrospective explanation was Stewarts Law and not Mr Wiesner at all. It was Mr Shaw who, at best, had overlooked the Kahn email and it was incumbent on him to correct what he had said in his first affidavit about Mr Logue evading service in New York (with the corollary inference that Mr Logue might dissipate his assets) and in his seventh affidavit about his firm being unaware of the Kahn affidavit and its contents. At this stage Mr Shaw could not honestly take the point that there was or could be a distinction between the Kahn affidavit and its contents on the one hand, and the Kahn email, which exactly replicated the contents of the affidavit, on the other. Indeed, he was not taking that point in relation to Mr Wiesner’s state of mind. Even assuming that Mr Shaw did not attend the Roth J hearing, he must have understood that the effect of his seventh affidavit was that all the blame would be heaped on Mr Wiesner rather than his firm, which is exactly what happened when Judgment was handed down (see paragraphs 31 and 32 of the Judgment at [C4/1685]). To this day, no letter of apology has been sent by Stewarts Law to Mr Justice Roth.

[168]Mr Turnbull accepted before the SDT that Mr Shaw’s seventh affidavit was incorrect [A3/tab 5/72], that he discussed the matter with Mr Shaw [A3/tab 5/74], that when he dug out the 12th April email on 6th July he realised that the Court had been misled in Mr Shaw’s first affidavit [A3/tab 5/page 76], and that [A3/tab 5/78/lines 16-19]:

“-obviously I’d spoken to Andrew about this and the view was taken is you know, ‘we hadn’t’, you know, we had overlooked it, hadn’t appreciated the significance of it. Mr Wiesner, you know, he was…we sent him the affidavit, he could have flagged it up for us”

[169]Thus, ‘overlooked’ really meant, ‘had not appreciated the significance of’. Mr Turnbull subsequently accepted that the Court needed to be given an urgent, honest and accurate explanation of the true facts [A3/tab 5/80/line 5]. I need to set out the critical part of the cross examination in full:

“Q. But you must have been feeling deeply uncomfortable about this? A. Well, I … you know, I went to Andrew about it, I mean … Q. So the truth is that you bowed to his greater experience? … A. I deferred to him to decide what to do, I mean – I think as any person in my position would have done that. Q. Yes, and was it his idea that Mr Wiesner should be asked to say something that really wasn’t fair on Mr Wiesner and wasn’t quite accurate? If you go to 1586- A. Yes. Q. Your point three is really not on, is it, so far as fairness to Mr Wiesner is concerned … A. I think that’s true isn’t it. He did believe he was in London rather – he said that … A. Well, I mean, I think I understood it was by the time he … he could have mentioned … it is clearly the thought processes rightly or wrongly … Jeff could have mentioned it because he was the person dealing with the process servers or Mr Kahn. Why didn’t he mention it in his affidavit? He didn’t mention it when he signed his affidavit in … 26th April or whenever it was because he already thought Mr Logue was in London because of what Mr Knuckey had told him Q. But it’s not an honest explanation. A. I- Q. Looking at it now, it’s not an honest explanation, is it? A. I don’t really think it’s wholly dishonest, but you know, that’s for the Tribunal to decide. It’s not … I don’t think it’s for me to decide. Q. It’s disingenuous isn’t it? A. Again that’s something for the Tribunal to decide. Q. Well I’m asking you Mr Turnbull. A. Possibly, but you know I could see … I could see the logic at the time. It’s in retrospect far from good. I’ve tried to explain the situation.”

[170]Mr Turnbull was also asked whether he felt uncomfortable in Court on 8th July during Roth J’s exchanges with Mr Onions, and the better view of his evidence is that he did [A3/tab 5/87].

[171]Unsurprisingly, Mr Wardell subjected Mr Shaw to a persistent and forceful cross examination on these issues. Mr Shaw accepted that his seventh affidavit was incorrect [A2/tab 3/85/line 3] although he did not accept that he knew this at the time it was sworn. When he was taken to the Wiesner/Turnbull emails, Mr Shaw first of all suggested that he did not see them at the time [A2/tab 3/96/line 9]. This was a surprising answer: even if the emails were not forwarded to him by Mr Turnbull, the latter must have communicated the gist of them, and we have seen from Mr Turnbull’s evidence that they were definitely discussed. Mr Shaw later accepted that he did have a conversation with Mr Turnbull [A3/tab 3/98]. He attempted to suggest that Mr Wiesner had accepted the blame during the course of discussions with Mr Turnbull [A3/tab 3/98/lines 11-13]. The following pages in the transcript need to be considered in full. Mr Shaw was clinging to his case that, although his eighth affidavit was expressed ‘in a rather cack-handed manner’, it was not misleading. When it was put to him by Mr Wardell that he should have written to Roth J to put the record straight, Mr Shaw returned to his theme that he was ‘still thinking in terms of Mr Kahn’s affidavit’. Mr Shaw did accept that Roth J had been misled, but he denied that this had occurred deliberately.

[172]Reading the transcript and not having the advantage of seeing and hearing Mr Shaw testify, all I can say is that I am unimpressed by the sophistry of some of his answers. The SDT would have been entitled to conclude that his evidence was obfuscating and evasive. And what would Mr Onions and Roth J be thinking if they knew of the true position?

[173]In his closing submissions to the SDT on this issue, Mr Fenwick did his utmost to extricate both his clients from the pickle in which they now found themselves (see paragraphs 156.60-156.62 of the SDT’s Judgment). Mr Fenwick submitted that Mr Turnbull had simply been trying to do his best in the short period of time during which the 6th July email exchanges had taken place. As for the eighth affidavit:

“Mr Fenwick said that with the benefit of hindsight the First Respondent would have realised that the error should have been corrected but the fact that he had not done so did not mean that he had decided to be dishonest and risk his reputation of 30 years. Mr Fenwick stated that if the Tribunal believed that there had been a conspiracy then the situation would be different. He asked the Tribunal to note that the Second Respondent’s admission in evidence that he had suggested to Mr Wiesner had not been ‘wholly dishonest’ must be seen in context. He had been answering questions at the end of a long and arduous cross examination and he had been looking at the situation now rather than at the time.”

Analysis of the

Grounds of Appeal

[174]Having considered the Appellants’ Grounds of Appeal, Skeleton Arguments, further written submissions (see the Appendix) and detailed oral arguments, I propose to adopt a slightly different sequence than that prefigured in paragraph 32 above. Mr Dutton decided to present his case in a certain order and manner for entirely understandable forensic reasons, but for my purposes at least it is more logical to address the points of principle raised by this appeal before considering what might be called the fact appeal and then, finally, the reasons appeal. I indicated in argument that the reasons appeal interested me the most, and having considered the matter with great care my provisional impressions have been entirely borne out.

[175]So, having regard to paragraph 32 above, my preferred pathway through this appeal is as follows:• Misapplication of the correct test of dishonesty and the criminal standard of proof (ground 2).

• Failure properly to address and/or wrongly to address: the Appellants’ good character; the difficulties created by LPP; the relevance of Roth J’s judgment; the role of counsel; separate charges; the withdrawal of the allegations of dishonesty against Mr Turnbull save in relation to the eighth affidavit (grounds 1 and 4).

• Unfairness in the conduct of the appeal (ground 6).

• Findings ‘plainly wrong’ (ground 5).

• Failure to identify what evidence, and submissions, were accepted and rejected, to link the evidence which was accepted with the conclusions, and properly to set out its reasons and reasoning process. Linked to these matters is Mr Dutton’s subsidiary point that the SDT failed to identify which limb of the relevant provisions in the Code of Conduct was breached (grounds 1 and 3).

• The appeal against sanction brought by Mr Turnbull alone.

Misapplication of the Correct Test of Dishonesty and the Criminal Standard of Proof

[176]At paragraph 156.16 of its Judgment the SDT recorded Mr Wardell’s submission in opening that the criminal standard applied to these proceedings, and the two stage test laid down in Twinsectra, including the subjective limb. This was echoed in Mr Fenwick’s submission (paragraph 156.39). None of these matters could properly have been in issue; it was so elementary.

[177]If there were any doubt as to the SDT’s correct apprehension of the subjective limb, this would be dispelled by paragraph 156.34 of the Judgment (see paragraph 28 above).

[178]The SDT correctly directed itself as to the application of the criminal standard of proof (see paragraph 155). The SDT also correctly recorded Mr Wardell’s submission in relation to Mr Turnbull and dishonesty, in particular that he should be given the benefit of the doubt save in relation to the eighth affidavit (paragraph 156.33). The references to ‘requisite standard’ in paragraphs 156.77, 156.80 and 156.82 can only be to the criminal standard of proof in the context of the subjective element not being satisfied. In my judgment, it is not arguable that the SDT failed to apply the correct standard of proof, failed to have proper regard to the second, subjective limb of Twinsectra, and failed to apply the criminal standard to that second limb.

[179]The Appellants’ complaint (see the final sentence of paragraph 51 of their Skeleton Argument) that the SDT has failed to set out or explain how – in respect of each of the Findings comprising the core of its Judgment - the subjective limb has been satisfied to the requisite standard, goes to the separate issue of the quality of the SDT’s reasons, to which I will be coming. Various Failures of Approach Good Character

Various Failures of Approach

[180]Mr Shaw had a long and distinguished career in the profession, and there were no disciplinary findings recorded against him. Two eminent Leading Counsel supplied character references in his support [W1/114/1-3]. Mr Turnbull, although very much more junior in practice, also had an unblemished career and was an aspiring litigation lawyer. A testimonial in his support was provided by a senior litigation partner at Stewarts Law. Plainly, the good character of the Appellants was relevant to the issues of both propensity and credibility, but the SDT made no express references to these, or to the testimonials, in its Findings. Mr Dutton submits that it is to be inferred that the SDT paid no or no adequate regard to these important matters.

[181]Mr Fenwick drew the attention of the SDT to the two character references for Mr Shaw, and he invited the SDT to read them carefully [A3/tab 6/9]. He did not expressly invite the SDT to bear in mind the relevance and significance of his clients’ good character, particularly when supported by affirmative evidence vouching its presence. At paragraph 156.44 of the Judgment, Mr Fenwick is recorded as having submitted that, generally speaking, experienced solicitors acted honestly and would need to have a good reason for acting dishonestly, even if so inclined.

[182]The issue on this appeal is whether there is a substantial doubt as to whether the SDT bore Mr Fenwick’s submissions in mind and had regard to the good character of the Appellants as relevant to the issues of credibility and propensity. In my judgment, there is no such doubt. The SDT is an expert, professional jury which does not need the sort of ‘good character direction’ one sees in criminal trials (and neither counsel sought to give one), and does not need to have demonstrated that it took the Appellants’ good character into account by express reference to these trite principles in the body of its Judgment. It is obvious to anyone experienced in this line of work that the SDT, in the light of both Appellants’ history and the inherent unlikelihood of an experienced solicitor such as Mr Shaw seeking to place his career in jeopardy, would be very slow to find subjective dishonesty, unless driven by the evidence to do so. Put in these terms it may be appreciated that Mr Fenwick was right to emphasise these cogent commonsense factors (see paragraph 156.44) rather than the testimonial evidence, which in my judgment added very little to the overall picture.

Legal Professional Privilege

[183]At paragraph 156.40 Mr Fenwick is recorded as having reminded the SDT that the case of Metcalf v Mardell is authority for the proposition that ‘the role of the lawyer who was subject to the privilege of others had to be looked at with great care’. Mr Dutton’s submission is that there is no indication that the SDT was loyal to this approach in relation to its key Findings.

[184]Mr Fenwick did not tether his submission to any particular evidential area; his approach was to allow an aura of uncertainty to hover over the evidence, to his clients’ forensic advantage. To my mind, this was a perfectly legitimate strategy, not least because Mr Fenwick would not necessarily have been aware of the privileged material, if any, which had not already been disclosed in the proceedings. I have already referred to the fact that Jones Day disclosed a mass of privileged material in error in the US proceedings, and it is not altogether clear what else might have existed. That said, I have in mind that communications between the lawyers which were not copied to Jones Day, as well as communications between Jones Day and Candy/CPC, probably did not see the light of day.

[185]Mr Dutton strongly submitted that Mr Shaw may well have had another, privileged source for the information set out in his third affidavit dated 12th May 2010 relating to the disconnection of the telephone at Mr Logue’s Park Avenue apartment, and in answer to my question asked at the start of his Reply he mentioned privileged communications between Mr Wiesner and Mr Turnbull in July 2010 (no mention of the existence of these was contained in Mr Dutton’s Skeleton Argument). But in my judgment there is very little I am able to make of these matters. Mr Fenwick did not advance specific submissions on this basis, and the highest the point may be put is that the SDT should have been looking at the available, disclosed evidence with great care. That does not mean that the SDT was bound to assume that there might be further, privileged material which would have availed the Appellants, in which case they must be given the benefit of the doubt. All that it does mean is that the SDT should be appropriately cautious, and there is nothing to indicate that it was not. Had Mr Shaw said, in reply to any of Mr Wardell’s questions, that he could not furnish the answer he would have wished to in the light of solicitor/client privilege that would, in my judgment, have provided a sounder spring-board for Mr Dutton’s submissions; but in the absence of such evidence Mr Dutton was really forced back to the way Mr Fenwick chose to put the case at the SDT hearing. I am not entitled to speculate beyond pointing out that if valuable evidence really has remained covered by the cloak of privilege then Mr Shaw has only himself to blame by failing to prepare himself properly for the SDT hearing, and to draw attention to the existence (but not the contents) of relevant privileged material at the appropriate time.

The Relevance of Roth J’s Judgment dated 23rd July 2010

[186]Roth J’s Judgment given on 23rd July 2010 was not a final judgment and therefore could not constitute prima facie evidence of any facts upon which the judgment was based for the purposes of rule 15(4) of the Solicitors (Disciplinary Proceedings) Rules 2007: by definition, Roth J did not find any facts.

[187]Mr Fenwick made an accurate submission to the SDT about the evidential status of the Roth J Judgment (see paragraph 156.38) and Mr Wardell did not return to the point in his submissions in reply.

[188]Mr Dutton submitted that Mr Wardell and Mr Logue made numerous references to Roth J’s Judgment during the course of the hearing, and this approach only served to prejudice the SDT against the Appellants. I refer to the Addendum document which was supplied to me during the course of these proceedings.

[189]However, it was not Mr Wardell’s submission that the SDT should have regard to anything falling from Roth J for the purposes of rule 15(4), and reading this judgment with care, as I have done, discloses nothing which constitutes any explicit criticism of Stewarts Law. Roth J was concerned only with the position of the Liquidating Trust as a whole, an entity which would have included its servants or agents in this context. In any event, as we have already seen in relation to the eighth affidavit of Mr Shaw, any blame which should have been accepted by the English solicitors was successfully deflected across the Atlantic Ocean. Accordingly, insofar as Roth J made any criticism of anyone, this was confined to Mr Wiesner and did not extend to Stewarts Law. There is nothing that the Appellants can latch on for present purposes.

[190]It is true that the SDT expressly referred to Roth J’s judgment in the context of the HM Land Registry searches (paragraph 156.82), but this was on the basis that it agreed with the learned Judge’s opinion rather than being indicative of a slavish approach.

[191]In my judgment, Mr Dutton’s submission on this aspect of the appeal fails.

The Role of Counsel

[192]This aspect has acquired greater significance on appeal than it did below.

[193]Neither Mr Wardell nor Mr Fenwick submitted to the SDT that Counsel were or might have been at fault in any way, and it is entirely right that I should record that this remains the case as far as Mr Dutton and I are concerned. Mr Fenwick submitted both orally and in writing that it should be recognised that the solicitors were acting under the guidance and advice of Counsel, that all important affidavits and witness statements must have been settled by Counsel, and that an experienced solicitor would reasonably expect Counsel to take the lead in identifying potential defences to the Court at any without notice hearing.

[194]To be fair to Mr Dutton, the document he submitted after the conclusion of this hearing did not seek to draw attention to any new material; at its highest, it sought to attach greater significance to the role played by Counsel in preparing the evidence and in presenting the case in front of three High Court judges.

[195]In my judgment, none of this goes anything like far enough to avail the Appellants. If it had been demonstrated that Counsel had somehow failed to make use of evidence which was drawn to their attention (for example, the Kahn email had been shown to Counsel but a decision was made not to refer to it), that would clearly be a strong point on which the Appellants might have been able to rely for the purposes of rebutting subjective dishonesty; but that was not how the case was advanced before the SDT or, indeed, on appeal. On the contrary, the irresistible inference is that Counsels’ advice on critical issues was never sought, and that that they were kept in the metaphorical dark. Why else would Mr Onions have asked Mr Turnbull for instructions about third party funding at the fortification hearing on 21st May 2010? Is it seriously being suggested that Counsel knew about the 6th July emails and the genesis of the eighth affidavit? Would the involvement of Candy/CPC have been kept away from the Court at all material times had Counsels’ advice been sought? And would Mr Shaw have written those letters to Withers in July and August 2010 had he sought a second opinion?

[196]Having spent very many hours considering the complex issues raised by this appeal, I keep asking myself the question why the Appellants did not seek Counsels’ advice on these critical issues. I understand all the pressures that solicitors may be acting under, but that is a greater, not a lesser, reason for seeking a second opinion, a sense check, from an independent source. This was particularly hostile litigation and the Appellants were no doubt convinced that Mr Logue was a tricky customer, and that the Liquidating Trust was going to win. This might explain why Counsels’ advice on the matters which ended up before the SDT was not sought, but whatever the explanation the solicitors have paid the price. Separate Treatment of the Allegations and the Withdrawal of the Majority of the Allegations of Dishonesty against Mr Turnbull

[197]Mr Fenwick invited the SDT to consider the allegations against each Appellant separately, having regard to the differences in the evidence against each of them and all the circumstances (see paragraphs 156.39 and 156.40). The way in which the SDT’s key Findings are organised demonstrates that the SDT was loyal to this approach. The SDT found some of the charges of dishonesty proved but not others. Furthermore, although the SDT was entitled to have deployed a sure finding of dishonesty on one allegation as evidence in support of a finding of dishonesty on other – on the basis that this was an alleged course of conduct – there is no express indication that this was the approach that the SDT in fact followed.

[198]Mr Dutton strongly submitted that the SDT did not follow through the logic of Mr Logue abandoning almost the entirety of his case on subjective dishonesty against Mr Turnbull: if the solicitor with day-to-day conduct of the litigation was not subjectively dishonest, so the submission ran, how could the supervising partner be?

[199]Mr Fenwick ran a similar submission before the SDT although it was not expressly referred to in the Judgment. Mr Wardell’s answer to this submission was that Mr Turnbull’s evidence was to the effect that he was acting at all material times under the direction of Mr Shaw, who adopted a hands-on approach. Mr Wardell’s submission below was that Mr Turnbull had in the main done his best to assist the SDT when answering questions in cross examination, but the same could not be said of Mr Shaw.

[200]The difficulty with Mr Dutton’s submission is that it clearly does not have force in relation to the areas which have given me the greatest concern, namely the non-disclosure of the Candy/CPC involvement at the without notice hearing, the handling of this issue after the fortification hearing, and the preparation of the eighth affidavit. Furthermore, although Mr Shaw said on many occasions that he had not been aware of the fine detail, this was plainly a matter for the SDT to weigh up and to assess; this is not a point of law for the High Court on a section 49 appeal. Mr Logue’s willingness, for whatever reason, to give Mr Turnbull the benefit of the doubt did not mean that Mr Shaw’s conduct and accompanying state of mind had to be regarded in like manner: Mr Logue’s concession might have availed Mr Shaw, but it was not essential that it did. Ultimately, I see no logical inconsistency between Mr Turnbull being free from subjective dishonesty but Mr Shaw being guilty of it. Further, the SDT’s question to Mr Turnbull, and the latter’s answer confirming that he had not been responsible for strategy in the case (see paragraph 154 of the SDT’s Judgment), is strongly indicative of the SDT being fully cognisant of the solicitors’ respective roles and responsibilities.

Unfairness in the Conduct of the Appeal

[201]I have read the transcripts of the evidence with care, and have come to the conclusion that there is no merit in this ground of appeal. Mr Wardell’s cross examination of Mr Shaw may be described as robust, persistent and fairly unrelenting, but I do not believe that it came close to being unfair. The SDT Chair interrupted Mr Wardell on a handful of occasions in order to enable Mr Shaw to answer the question put, and Mr Fenwick dealt with a limited number of concerns as the lengthy cross examination progressed. However, it was not Mr Fenwick’s contention at the conclusion of the evidence that his clients had been browbeaten into submission, nor could it have been.

[202]Had this been an in-house prosecution conducted by the SRA, it is possible to imagine a slightly less combative and vigorous approach. Mr Wardell’s client had been at the wrong end of extremely hostile litigation and no doubt regarded these proceedings as the opportunity to right the wrongs which had been done to him over a number of months. That having been said, I would entirely reject any suggestion that Mr Wardell somehow allowed the energy and focus of his client to distort the forensic process and the rules of fair play which underline any professional cross examination in any forum. SDT’s Findings ‘Plainly Wrong’ The Appellants’ Case

SDT’s Findings ‘Plainly Wrong’

[203]The high watermark of Mr Dutton’s submissions was that the SDT’s Findings on all the allegations were ‘plainly wrong’ or unsustainable.

[204]In support of this contention Mr Dutton advanced a number of submissions of general application which overlap with other Grounds of appeal. He submitted that it was inherently implausible or unlikely that the Appellants could have been acting in the deliberately dishonest manner contended for by Mr Logue. They had no clear motive, and would not have risked their careers and reputations for little or no obvious gain. Mr Shaw, in particular, was an extremely successful and busy solicitor with simultaneous conduct of a large number of cases and could not be expected to have been aware of all the fine detail; his role was more strategic and panoramic. He would expect Mr Turnbull and Counsel to grasp the minutiae. It is vital in any case of this nature to consider the Appellants’ respective states of mind at the time, not as these might appear after the event. The Appellants were entirely convinced that Mr Logue had been guilty of sharp practice in the US in 2005, and that he had been elusive in 2008/9 and then again in April 2010. There were reasonable grounds for believing from the February 2010 correspondence that Mr Logue knew all about the US proceedings. The Appellants were hampered and hidebound by solicitor/client privilege throughout. Given that the criminal standard of proof applied, it was simply untenable to hold that the second limb of Twinsectra could be satisfied. There is all the difference in the world between errors of judgment and subjective dishonesty.

[205]Turning to each set of allegations, Mr Dutton made the following points. I shall concentrate for these purposes on four areas. What follows is a summary of the Appellants’ case.

[206]In relation to the without notice hearing and the New York apartment, Mr Dutton contended that paragraph 8 of Mr Shaw’s first affidavit made clear that there was an element of doubt as to whether Mr Logue was still in New York. The affidavit suggested that he could well be in London, and the position was not misrepresented. The email chain dated 6th July 2010 shows that the Kahn email had been ‘overlooked’; it is not plausible that Mr Turnbull could have dreamt up a mendacious explanation to Mr Wiesner in circumstances where it could never have been anticipated that these emails would subsequently be scrutinised by a disciplinary tribunal. Mr Shaw did not accept that the reference in his third affidavit to Mr Logue’s ‘phone having been disconnected in his New York apartment could only have come from the Kahn email. Mr Shaw had been surprised by the question and gave an inconclusive answer. There is little evidence that Mr Shaw was aware, or at least took due cognisance of, the matters set out in Mr Knuckey’s first conversation of 15th April 2010: Mr Turnbull alone had been party to it, Mr Shaw had not been copied into Mr Turnbull’s email sent to the US, and the relevant matters did not form the subject of Mr Knuckey’s report dated the following day. It is entirely plausible that Mr Shaw lost sight of the Udvardy email in the morass of detail which was swamping this case at the material time, in the hurly-burly of this, and other, complex commercial litigation.

[207]Mr Dutton made much of the point that Mr Shaw was clearly ‘compartmentalising’ issues in his mind, inasmuch as he (honestly) failed to bridge the links between apparently discrete segments of evidence. I refer to Mr Dutton’s separate Note on this issue and the various transcript references bearing on the point. Contrary to Mr Logue’s case, both the Liquidating Trust and Stewarts Law were very keen to serve Mr Logue wherever he was, in order to retain the Quantification hearing date. During the course of the without notice proceedings Mr Onions told Morgan J that ‘there is some evidence to support the proposition that Mr Logue is trying to evade service of documents in the US proceedings – that is Mr Knuckey’s evidence and we are concerned that he becomes aware of the injunction as soon as possible’ [C3/1084]. This indicates that the Liquidating Trust was focusing on London rather than New York, and was not seeking to rely on evasiveness in New York regarding service. In any event, separate compartments formed in Mr Shaw’s mind between difficulties surrounding service on Mr Logue in New York, difficulties surrounding service in London, and the risk of dissipation of assets. In short, it was said that Mr Shaw’s mind was fixed on the notion that Mr Logue could not be served in New York and therefore had to be served in London, and that he never made the conceptual link between the issue of evasion of service in New York and the risk of dissipation of assets. Looking back on it now, it may be easy to discern this nexus, but at the time this was not Stewarts Law’s collective or individual state of mind at all.

[208]In relation to the failure to disclose the involvement of Candy/CPC, Mr Dutton submitted that ‘the assumed proposition of law, that a solicitor is bound to disclose that a third party may have an interest in the outcome of litigation, is wrong or at least doubtful’. In any event, whatever may be the strict position on the authorities, the Appellants honestly believed cases such as Ablyazov were authority for the proposition that it was not incumbent on a party, pursuant to its duty of full and frank disclosure at a without notice hearing, to divulge the existence of a third party who may have an interest in the outcome. Secondly, Mr Shaw’s first affidavit did refer to Mr Christian Candy’s concerns that the deposit moneys ‘were possibly tainted by illegality’ (see paragraph 29 at [C3/1011]). Thirdly, and consistently with the principle in Abraham v Thompson, Mr Shaw considered that the appropriate stage for details of funding to be disclosed was at the point that costs orders were being considered under s.51 of the SCA 1981, if that point ever arose. Given that this was clearly Mr Shaw’s state of mind at the relevant time, the second limb of Twinsectra could not possibly be satisfied.

[209]In relation to the fortification hearing, Mr Dutton submitted that it was clear that the duty of full and frank disclosure ceased to subsist on 21st May 2010. By the time Mr Shaw served his first witness statement on the previous day, the involvement of Candy/CPC was about to end and arrangements were being set in train for a CFA agreement to be entered into between the Liquidating Trust and Stewarts Law. At the very least, these were important considerations insofar as Mr Shaw’s state of mind was concerned. It is quite clear on the evidence, Mr Dutton submitted, that Mr Shaw did not arrive at Court until after Mr Turnbull had given instructions to Mr Onions. Mr Turnbull’s notes to him were entirely consistent with the Court having been informed that there would be no third party funding going forward, and it followed from this that there was no reason for Mr Shaw to have taken the view that the Court might have been misled. In relation to the post-hearing correspondence, Mr Shaw was quite understandably concerned to ensure that Candy/CPC would not be exposed unnecessarily to the risk of an adverse order under s.51 of the SCA 1981, and he did not see the transcript of the proceedings at which he had not been present. Overall, Mr Dutton submitted that there was no basis for a finding of subjective dishonesty and, as it happens, the SDT did not in fact make one in relation to what occurred after 21st May.

[210]Finally, in relation to Mr Shaw’s seventh and eighth affidavits, Mr Dutton submitted that the seventh affidavit could not have been dishonest if his first affidavit was not, and in any event nearly three months had elapsed between the two. The focus of the seventh affidavit was not the Kahn email but rather the far more serious allegation made by Mr Logue concerning the timing of the Kahn affidavit. As regards the eighth affidavit, Mr Dutton drew a distinction between what he called Mr Logue’s ‘knowledge complaint’ (see paragraph 99a of his Reply document) and his ‘explanation complaint’ (see paragraph 99b). The contemporaneous email chain demonstrated that nobody at the time turned their mind to whether Mr Wiesner was the right person through which the explanation should be given: the intention was simply to convey the knowledge of the Liquidating Trust and to explain the omission in Mr Wiesner’s first affidavit. I set out paragraphs 118 and 119 of Mr Dutton’s Reply in full:

“Thus, Mr Shaw was focusing on the Kahn Affidavit and documents attempted to be served which had been returned as undeliverable under separate cover. At paragraph 14 of Mr Shaw’s Eighth Affidavit [C4/1654] he faithfully relays the fact that Mr Wiesner had carried out further investigation and that the reason why there is an inconsistency between the date of the fax and the date of Mr Kahn’s Affidavit is because Mr Kahn’s fax machine recorded the date of the fax incorrectly and that the fax in question was received on 30 April 2010. This, together with the allegation relating to “and returned under separate cover as undeliverable” was the focus of the evidence. In the next paragraph (15 at C4/1655) Mr Shaw says that he understands from Mr Wiesner that despite not receiving the fax on 17 April he was told by Mr Kahn in mid-April of the facts set out in Mr Kahn’s Affidavit dated 30 April. The last sentence “I am told by Mr Wiesner that the reason why he did not mention this in his First Affidavit is because he thought it was sufficient that the Court had been told that it was believed that Mr Logue was by then in London”

. Although Mr Wiesner had sent the email at [C4/1585] it does not follow that his failure to mention this in the First (Wiesner) Affidavit is not for the reason given. If the parties had been working on the basis that Mr Wiesner was to deal with the question of service and had, as the contemporaneous material tended to indicate, overlooked the contents of the Kahn Affidavit, then what is said in paragraph 15 is not wholly inaccurate, but in any event is not subjectively dishonest. In all the circumstances the Finding in 156.79 is unsustainable” In all the circumstances the Finding in 156.79 is unsustainable”

My Conclusions

[211]The foregoing is a brief summary of the detailed and comprehensive submissions which Mr Dutton put before me, both in writing and orally. I have read those submissions at least twice (not merely in relation to the four specific matters I have covered, but more generally), and have also considered with equal care the written and oral submissions (as transcribed) of Mr Fenwick.

[212]It should be recognised that in an earlier section of this Judgment I have not set out all the documentary and oral evidence which was adduced before the SDT. I have done my best to summarise much of it, and I have provided a commentary as I have gone along. My summary has been selective (it could not have been otherwise) and I obviously cannot exclude the possibility that my commentary contains my own interpretation of the evidence. There is no such thing as an entirely objective interpretation – everything depends to some extent on the eye of the beholder, and I would expect both parties reading this Judgment will have been disappointed by some of the things I have said. If that is right, I can take comfort in the fact that I have achieved a modicum of balance.

[213]The issue at this stage is whether the SDT’s key conclusions that Mr Shaw was dishonest in a number of respects and that Mr Turnbull was dishonest in one specific, albeit important, respect are ‘plainly wrong’. My function is to review the evidence and to apply to it a strict yardstick; it is not to second-guess the SDT’s Findings or to substitute my views for theirs even if, for example, I were of the opinion that the conclusions are probably wrong (for the avoidance of doubt, I do not hold that opinion). ‘Plainly wrong’ imports a higher onus of persuasion, and for good reason: the reviewing Court does not see and hear the witnesses.

[214]Strictly speaking, Mr Dutton’s bombardment of the Court with detailed oral and written submissions on the evidence itself entails an impermissible exercise, because the correctness or otherwise of the SDT’s conclusions must turn on the submissions that were advanced by the Appellants’ then Leading Counsel, not on any new and additional arguments that another legal team has been able to fashion out of the copious documents and transcripts of the oral evidence. In the main, Mr Dutton has not advanced any entirely fresh points; the differences between his submissions and Mr Fenwick’s are more of style and emphasis than of substance. In the circumstances of this appeal I have been prepared to consider all the submissions that have been advanced by Mr Dutton whether or not they are to be reflected in Mr Fenwick’s submissions put forward below. I would not wish the Appellants to feel that a point that Mr Fenwick might have taken but did not has made all the difference to the outcome. In the event, full reference to Mr Dutton’s submissions has not altered the result.

[215]In short, I do not agree with Mr Dutton that any of the SDT’s conclusions are unsustainable or ‘plainly wrong’. My reasons are as follows.

[216]At this stage the focus is not on the SDT’s expressed reasons (I will be coming to these later) but primarily on whether the SDT, having seen and heard the Appellants being cross examined over a number of days, was entitled to conclude that each was dishonest in the respects found. I recognise all the points Mr Dutton made about the criminal standard of proof, the good character of his clients, the inherent implausibility of either of them acting dishonestly, the role of counsel etc, but in my judgment there was a sufficient evidential basis for the core Findings in the sense that it is possible for this Court to see and understand how the SDT could have concluded, in particular, that the Appellants were subjectively dishonest.

[217]Mr Dutton’s submissions effectively asked me to re-try the case against his clients, but that is not my function on a section 49 appeal. His submissions also effectively asked me to conclude that all of his clients’ explanations given to the SDT in evidence were sufficiently compelling that they should have been accepted by the SDT at face value, or at the very least that there was a reasonable doubt as to their being honestly-held explanations. Mr Fenwick was quite entitled to adopt this approach at first instance but in my judgment it is an impermissible one on appeal: the issue for me is whether the SDT, properly directing itself as to the law, could have rejected the Appellants’ explanations that they were honest and could have concluded that they were dishonest. I do not see how on the material before me I could come properly to the view that the SDT were not entitled to reach the conclusions they did.

[218]I might have come to such a conclusion if I had thought that there was no prima facie case against the Appellants but that was far from being the position, and Mr Fenwick made no submission to that effect. I might have been quite sympathetic to Mr Dutton’s submissions if I had thought that the case against the Appellants was weak, but that is not my view either. As ought to be apparent from the lengthy section of this Judgment entitled ‘Analysis of the Factual Issues’, after Mr Wardell’s thorough cross examination of them the case against the Appellants in relation to the various allegations before the SDT ranged in my judgment from being overwhelming at its highest (as regards the eighth affidavit of Mr Shaw) to fair at its lowest (as regards the alleged misrepresentation of the strength of the Liquidating Trust’s claim in the US proceedings, and the prospects of setting aside the default), with much intermediate territory. I should make clear that I am evaluating the case in this manner taking into account the application of the criminal standard of proof. But even a case which looks only ‘fair’ to a reviewing Court is sufficient to justify a finding of dishonesty by a tribunal which has seen and heard the witnesses and come to its own conclusions. Furthermore, at this stage the reviewing Court is able to bear in mind that a tribunal could treat a sure finding of dishonesty on one allegation as supporting a finding of dishonesty on another.

[219]To some extent the strength of the case against the Appellants overlaps with the adequacy of the SDT’s reasons. I will therefore be re-examining a number of Mr Dutton’s specific submissions in relation to this Ground of appeal under the rubric of the following Ground of appeal, to which I will now turn.

The Reasons Challenge

[220]Mr Dutton’s essential complaint was that the SDT has conspicuously failed to set out what evidence it has accepted or rejected, as well as its key findings of fact on the main issues of knowledge and dishonesty. In the result, what we see in the three short pages of the SDT’s Judgment headed ‘The Tribunal’s Findings’ is a series of conclusions on each of the allegations and sub-allegations previously itemised rather than a properly reasoned progression from(a) the evidence that is accepted or rejected, to

(b) the essential factual findings flowing from the above and leading to

(c) the basis on which the inferential conclusion of subjective dishonesty is reached. The Appellants are substantially prejudiced because they are left essentially in the dark as to why their explanations were rejected and consequently why they were struck off.

[221]Mr Wardell submitted that the Appellants’ claimed ignorance of the reasons for their being disbelieved is almost completely synthetic. Having being thoroughly cross examined over a number of days, and having heard the submissions advanced by both sides, the Appellants well knew what view the SDT was likely to have made of their evidence in the light of the admittedly short reasons they gave, and why they were accepted as neither credible nor reliable witnesses. Moreover, it was not incumbent on this expert tribunal to give reasons for its factual findings. The case of Gupta is authority for the proposition that it is sufficient for a tribunal such as this to set out the evidence and submissions in detail, and then to set out its conclusions on the various allegations: all the necessary reasoning is apparent from the marrying up of all these matters. On analysis, Mr Wardell contended, the key issue running across almost all the allegations was that of subjective dishonesty – all the other issues fell clearly to be resolved in Mr Logue’s favour – and that was a straightforward question of fact for the SDT as the expert professional jury to resolve. Furthermore, it was Mr Wardell’s consistent submission that the case against Mr Shaw in relation to the allegations which were found proved against him was overwhelming, as was the case against Mr Turnbull in relation to the eighth affidavit. Accordingly, Mr Wardell submitted that the Appellants are quite unable to show that they had been prejudiced by the quality of the SDT’s reasons.

[222]The SDT dealt with the various allegations in chronological order. I will follow the same approach, although I will be addressing paragraphs 156.76 and paragraphs 156.81-156.82 at the very end. The first allegation, or set of allegations, fell under the heading, ‘The Disclosures regarding the New York Apartment at the Without Notice Hearing’, and at paragraphs 156.73 and 156.74 the SDT found as follows:

“The Respondents had provided misleading information to the Court as to whether the Applicant still lived at the New York apartment, had suppressed information regarding the Applicant’s place of residence and had failed to disclose other relevant information relating to the questions of whether the Applicant was evading service and likely to dissipate his assets. They had failed to disclose the existence of the Kahn and Udvardy e-mails and had not told the Court about Mr Knuckey’s telephone conversation with the Applicant on 15 April 2010. There had been a particular need for the Respondents to comply with their duty of full and frank disclosure at the Without Notice hearing and they had failed to do so. Accordingly, the Tribunal found allegation 1.1 to be substantiated against both Respondents. The Tribunal did not find the First Respondent’s explanation for “overlooking” the Kahn e-mail to be convincing. In particular, the First Respondent had admitted, at the time of swearing his third affidavit, that he was aware that the Applicant’s telephone number was no longer in service and he could only have obtained this information from the Khan e-mail. This amounted to dishonest conduct on the part of the First Respondent and accordingly the Tribunal found allegation 1.2 proved against the First Respondent. The Tribunal also found that the Respondent’s failings constituted a breach of the Code of Conduct and therefore found allegation 1.3 to be substantiated against both Respondents.”

[223]My initial reaction when first reading these paragraphs was that the reasoning they contained, such as it was, was unacceptably brief, and having now been taken through copious reams of documentary and transcribed oral evidence, and having reflected on the matter subsequently, that has become my considered view. I should explain why.

[224]My point of departure is that this was far from being a run-of-the-mill case. I say that for two reasons. First, the evidence was extremely complex and dense (Mr Wardell accepted the aptness of this second epithet), and merited a considerable degree of sifting, weighing and analysis. Secondly, the case was unusual inasmuch as it did not depend on the SDT preferring the evidence of witness A over witness B, in circumstances where the conflict between these two witnesses might have been obvious; it turned almost entirely on what view the SDT took of the Appellants’ (in particular, Mr Shaw’s) explanations for what they did and why, as given under sustained cross examination, with reference to the documentary base. It was necessary to establish what exactly the Appellants knew, when and by what means, what significance or salience they attributed at the time to what they knew, and whether the presentation of the case through affidavit evidence to the Court was deliberately misleading, either expressly or by implication (because relevant matters were consciously suppressed).

[225]Mr Wardell submitted that his client’s case was overwhelming in relation to the allegations currently under scrutiny, but I would not go that far. My assessment is that Mr Wardell had established a reasonably strong case through the force of his cross examination, but it was not so strong that it effectively explained itself. If I were the fact-finder, I would have sought constantly to have borne in mind the dangers of attributing what may appear obvious in hindsight to the states of mind of the Appellants, in particular Mr Shaw, as events unfolded in April 2010 and subsequently. In these circumstances, in my present capacity as the reviewing Court, I would have liked to see some indication that the SDT was aware of these dangers, and some indication that it fully understood the Appellants’ contrary arguments and had grappled with them.

[226]Looking now at paragraph 156.73, the SDT appears to focus specifically on the Kahn and Udvardy emails, and the Knuckey telephone call of 15th April. This must have been in the context of allegation 1.1.2 that evidence was suppressed regarding Mr Logue’s place of residence. I doubt whether this adds materially to the allegation in paragraph 1.1.1 that misleading information was given as to whether Mr Logue still lived at Park Avenue: this information was only misleading in the light of the three pieces of evidence indicating to the contrary. Yet, it would have been preferable for the SDT to have made this absolutely clear. More importantly (because this lack of clarity would not, by itself, amount to sufficient of a case), the SDT also found that the Respondents ‘failed to disclose other relevant information relating to the questions of whether the Applicant was evading service and likely to dissipate his assets’. Paragraph 66.3 of Mr Wardell’s Skeleton Argument filed for the purposes of these proceedings suggests that this must be a reference to the Knuckey/Turnbull conversation, but that was not how the case was opened by him to the SDT, and this conversation of 15th April surely forms part of the suppression of information sub-allegation. Paragraph 22.3 of Mr Wardell’s Skeleton Argument [A4/tab 4] relied on the package being returned to the sender on 12th April 2010 as ‘undeliverable’ rather than as ‘undeliverable as addressed’, but we see no reference to this in the SDT’s Findings, notwithstanding that it was a distinction on which Mr Logue placed some reliance. Paragraph 22.6 complains that Mr Shaw and/or Mr Turnbull failed to inform the Court that Mr Candy had encountered no problem in contacting Mr Logue. The SDT made no reference to this evidential nugget, or the inferences which might be drawn from it, and in my judgment it cannot be assumed that it constituted some sort of basis sub silentio for the conclusion that allegation 1.1.3 was proved.

[227]Paragraph 156.73 only makes sense if it is predicated that both Appellants, and in this context we really need to focus on Mr Shaw, had knowledge of the matters which the SDT found to have been suppressed. Without entering into philosophical territory, by ‘knowledge’ I mean – had sufficiently in mind and appreciated the significance and salience of. To my mind, the SDT somewhat glossed over this issue by(a) treating both Appellants in exactly the same way (‘the Respondents had provided misleading information’ etc),

(b) failing to make precise findings of fact as to exactly what Mr Shaw knew and when, and

(c) appearing to assume that the first limb of Twinsectra must have been satisfied leaving only the second limb. If knowledge was made out then so would the first limb of Twinsectra, but I would have preferred to have seen a much more systematic approach to the evidence and to the issues.

[228]Instead, the second limb of Twinsectra is addressed in a perfunctory way in paragraph 156.74. The issue was far more complex than the SDT makes it appear. Turning first to the Kahn email, Mr Wardell’s submission to the SDT was that Mr Shaw’s explanation had changed during the course of the proceedings. His first explanation (per the 6th July 2010 emails) was that the Kahn email had been ‘overlooked’; his second explanation, as it emerged under cross examination, was that the significance of the Kahn email had not been fully and properly appreciated. Either way, there was no deliberate intention to mislead. In my judgment, it was incumbent on the SDT to examine Mr Shaw’s case with considerably more precision than is exhibited by paragraph 156.74. Although it is clear to me that the SDT was entitled to reject Mr Shaw’s explanation or explanations (see my conclusion on the previous Ground of appeal), Mr Shaw himself is entitled to complain that he is left in the dark as to exactly what the SDT found, and why.

[229]Taking the matter in stages, Mr Shaw relied on the 6th July 2010 emails to demonstrate that it was his and Mr Turnbull’s collective view at that stage that the Kahn email of 12th April had been overlooked. In my judgment, although I take Mr Wardell’s point that these emails were not contemporaneous, they do provide some support for that proposition, and ought to have been addressed in that context. I have sought to analyse the 6th July emails in my own way but there is no basis for supposing either that this is the only way these emails could be interpreted in the light of other evidence, or that the SDT analysed the emails in that way. The objective reader simply does not know. It is not as if the issue were so obvious that the correct analysis goes without saying. In short, the SDT should have taken time to explain, however succinctly, what it made of these emails. It did not, and this is a serious failing.

[230]Even if it became tolerably clear that Mr Shaw had not entirely overlooked the Kahn email at the time he swore his first affidavit, in the sense that he had not forgotten its existence and some of what it said, one interpretation of the evidence was that he (abetted by Mr Turnbull) had overlooked its significance. I have already suggested that this is how the 6th July emails could be interpreted – in other words, Mr Shaw’s case did not change as such; it was clarified. Mr Shaw’s essential point is that he did not deliberately mislead the Court by commission or omission because he thought that the message was being conveyed by his first affidavit read as a whole that Mr Logue was known to be in London.

[231]In my judgment, it was beholden on the SDT to address this core plank of Mr Shaw’s case: that there is a difference between ‘overlooking’ simpliciter, and ‘overlooking’ in the sense of failing fully to appreciate the significance of. But the only factor which the SDT expressly addresses is Mr Shaw’s third affidavit and his alleged admission that by 12th May he was aware that Mr Logue’s ‘phone number had been disconnected, and the only source of his information was the Kahn email (I read the second sentence of paragraph 156.74 as saying that Mr Shaw admitted that he could only have obtained the information about the telephone from the Kahn email. If that is not how it should be read, the SDT is at fault in not explaining itself more clearly). In my judgment, this was likely to be placing undue weight on one piece of evidence alone, and in any event Mr Shaw did not in fact make the clear admission which is imputed to him.

[232]The SDT made no findings about the Udvardy email and the Knuckey/Turnbull telephone conversation, and in my view it should have done. Contrary to the impression given, the issue was not free from dubiety or complexity. Mr Shaw was not copied into the Turnbull/US email of 15th April, and it is certainly plausible that he focused on Mr Knuckey’s subsequent report. One can see how the 15th April conversation might have been lost in the metaphorical wash.

[233]Most troubling is the third sentence of paragraph 156.74, introduced by the pronoun ‘this’. The SDT appears to be saying that it is clear beyond reasonable doubt that Mr Shaw deliberately suppressed the contents of the Kahn email, and that conclusion may be safely inferred from his admission that by 12th May 2010 he was aware of the email and its contents. The use of the pronoun ‘this’ means that the conclusion cannot be expressly linked to anything else. I have already referred to the absence of any clear admission along those lines. But even if that were wrong, this one piece of evidence would not readily justify the conclusion that Mr Shaw deliberately and consciously sought to give the Court a misleading picture in all the respects alleged against him. In my judgment, one would need to link that his evidence with other evidential strands in order to build up a more convincing picture, but that exercise has not been undertaken.

[234]It should be clear from my conclusion on the previous Ground of appeal that I agree with Mr Wardell that there is, or was, sufficient evidence available to justify a conclusion of dishonesty, and I have referred to some of the highlights. The problem I have with the SDT’s reasons is that insufficient reference is made to that evidence, insufficient findings of fact are made, insufficient reference is made to Mr Shaw’s case as advanced in submission by Mr Fenwick, and the overall impression given is that the SDT has glided too rapidly and too easily between finding the first limb of Twinsectra satisfied to proof of the second limb.

[235]I need to address Lord Rodger’s point made in Gupta that it may be possible to correlate the decision-maker’s admittedly brief findings of fact with the evidence as set out and the parties’ submissions in order to understand how the adverse decision was in fact attained. In this context I must return to my opening, general observation that this was an unusually complex case. Although issues of credibility and reliability obviously arose, they did so in the context of assessing the weight to be given to Mr Shaw’s explanations given at various times, their consistency with the contemporaneous documentation, and the light they threw on this state of mind at the critical time, which was back in April 2010. I regret that I do consider it unsatisfactory in a case of this nature for the SDT to spend so long in its Judgment uncritically and un-analytically rehearsing the evidence and the parties’ submissions in the belief or expectation that the losing party, and if necessary the reviewing Court, can then cherry-pick their way through the maze of detail with a view to working out what the decision-making process might have been. This is not the sort of case in which the relevant evidence and submissions accepted or rejected by the SDT gleam like golden threads: to my mind, they needed to be highlighted by the SDT and then woven together into a coherent tapestry.

[236]Overall, my conclusion is that paragraphs 156.73 and 156.74 fall a considerable way short of being adequately reasoned. I am not suggesting that the SDT needed to undertake the sort of lengthy and punctilious exercise to be expected by a judge of this jurisdiction, but considerably more was required. In the light of this conclusion I need not express a view on Mr Dutton’s separate submission directed to the final sentence of paragraph 156.74.

[237]At this stage, I say nothing about the consequences of my conclusion on the reasons ground in the respect I have just outlined.

[238]The second set of allegations fell under the rubric, ‘Disclosures Regarding the involvement of Candy/CPC at the Without Notice Hearing’. These were addressed by the SDT at paragraph 156.75 of its Findings, as follows:

“The Respondents had been under a duty to provide full and frank disclosure at the Without Notice hearing and so information regarding the involvement of Mr Candy/CPC should have been provided to the Court. It was not for the Respondents to be selective as to what material should or should not be disclosed, if arguably, this was likely to influence the Court. Accordingly, the Tribunal found allegations 2.1 and 2.2 to be substantiated against both Respondents on the basis that matters pertinent to the funding of the litigation were not disclosed to the Court nor [sic] that third parties might have an interest in the outcome of the Without Notice hearing. The Tribunal considered that the failure to disclose these matters amounted to dishonest conduct on the part of the First Respondent and therefore found allegation 2.3 proved. The allegation of dishonesty in respect of allegation 2.3 was not being pursued against the Second Respondent. The Respondents’ conduct did amount to breach of the Code of Conduct and accordingly the Tribunal found allegation 2.4 to be substantiated against both Respondents.”

[239]It is necessary to read this paragraph in close conjunction with paragraph 2 of the allegations, which paragraph is set out at the start of the SDT’s Judgment. The SDT clearly came to the conclusion that the financial assistance Candy/CPC was giving the Liquidating Trust in relation in particular to the UK proceedings was a matter which should have been disclosed at the without notice hearing (see allegation 2.1.3), as was the commercial dispute relating to the apartment at One Hyde Park (see allegation 2.1.4). I have already concluded that, as a matter of law, the funding position ought to have been disclosed because it was relevant to whether the Court would require fortification of the cross undertaking, and Morgan J asked questions of Mr Onions which must have been directed to that issue. Accordingly, the SDT’s failure to explain its conclusion regarding allegation 2.1.3 could not be said substantially to prejudice the Appellants. In any event, this was the sort of issue which could be addressed by cross referencing the SDT’s conclusions with Mr Wardell’s submissions: it was not bristling with the layers of complexity which afflicted the previous set of allegations. I am slightly more troubled by allegation 2.1.4, if only because the issue is not quite as clear-cut (see paragraphs 99 and 101 above), and I would have preferred to see a greater level of legal analysis on the matter. Nonetheless, ultimately this is a point of law where Mr Wardell’s submissions were probably right, and the Appellants well know what his submissions were from the Judgment read as a whole.

[240]The SDT’s one sentence dealing with allegation 2.3 and the issue of dishonesty is far more problematic. The same essential concern arises as before: the SDT appears to have moved almost seamlessly from a conclusion that the first limb of Twinsectra was satisfied to proof of the second limb. But this was scarcely a small and straightforward step; it was quite a jump, and although I am quite satisfied that the SDT was entitled to make that leap I am far from satisfied that it has done enough to demonstrate that it fully understood and grappled with Mr Shaw’s case. He might have made fairly basic errors of law and practice in this jurisdiction, but these mistakes were not so egregious that they did not merit some words of explanation and a reasoning process for all to see and understand. Without this process having been expressly and systematically undertaken, the reader is left in substantial doubt as to whether the inferential conclusion of dishonesty was drawn from a deductive process no more complicated than:

‘an experienced commercial solicitor ought to know better, therefore this solicitor was dishonest’

. That is not good enough in my judgment, and – notwithstanding my unease about all that happened regarding Candy/CPC and the serious errors of judgment Mr Shaw made – I am bound to uphold Mr Dutton’s submissions on this Ground.

[241]The next set of allegations fell under the heading, ‘Use of Confidential Information Regarding Mr Logue’s Assets’. Paragraph 156.77 of the SDT’s Findings reads:

“The Tribunal agreed that the disclosure of confidential information regarding the Applicant’s assets did amount to a breach of an implied obligation of confidence and/or implied undertaking to the Court and constituted a breach of CPR 31.22. Accordingly, the Tribunal found allegation 4.1 substantiated against both Respondents because they were satisfied that such confidential information had been disclosed to Jones Day and must therefore have been at risk of being further disclosed by them to their clients, Mr Candy/CPC, although such further disclosure was not found by the Tribunal as a matter of fact. The Tribunal did not consider that allegations 4.2 and 4.3 had been proved to the requisite standard and the allegation of dishonesty was not pursued against the Second Respondent in respect of allegation 4.2. However the Tribunal did consider that the First Respondent’s conduct in relation to allegation 4.2 (but not the Second Respondent’s) had shown a reckless disregard for his duty as an officer of the Court. The Tribunal also found that the First Respondent’s and the Second Respondent’s failings amounted to a breach of the Code of Conduct and therefore found allegation 4.4 substantiated against both Respondents.”

[242]Again, this paragraph needs to be read in conjunction with paragraph 4 of the allegations set out at the start of the SDT’s Judgment. It is important to state that the SDT did not find dishonesty (allegation 4.2), and also did not find to the requisite standard that the application for the Freezing Order was pursued with the avowed intention that information as to Mr Logue’s assets would be passed on to Candy/CPC (paragraph 4.3). So, the SDT confined itself to a finding that Mr Shaw had shown a reckless disregard for his duty as an officer of the Court placing him in breach of various provisions of the Code of Conduct.

[243]Although the email to Jones Day was not sent by Mr Shaw, I have referred to the evidence showing that this was done with Mr Shaw’s approval (see paragraph 111 above). In my judgment, this was a straightforward issue which did not require any more reasoning than that which fell from the SDT, although its elliptical style of expression is not to be commended. This information should not have been transmitted to Jones Day, and although the finding of ‘reckless disregard’ was somewhat excoriating, it was within the SDT’s range of permissible responses as an expert disciplinary tribunal. No further words of explanation would have assisted Mr Shaw in understanding the nature of the criticism of his professional conduct, notwithstanding that he does not accept it. In my judgment, these actions placed Mr Shaw in breach of rules 1.01, 1.03 and 1.06 of the Rules of Conduct. I am less clear about rules 1.02 and 10.05, but do not believe that these really add to the gravamen of the criticism.

[244]The next series of allegations is covered by the rubric, ‘Disclosures Regarding the Liquidating Trust’s Funding at the Fortification Hearing’. Paragraph 156.78 reads as follows:

“The Tribunal agreed that the statements given by Mr Onions at the Fortification Hearing had been misleading and that the evidence filed for the hearing had also been misleading by failing to mention that Mr Candy/CPC had provided funding to the Liquidating Trust. The Tribunal considered that this failure constituted a breach of the Respondents’ obligations to provide full and frank disclosure and of their duty not to mislead the Court. Accordingly, the Tribunal found allegations 5.1, 5.2 and 5.3 proved to the requisite standard. The Tribunal considered that the First Respondent had been dishonest in permitting Mr Onions to give the statements referred to and found that he had been dishonest in his affidavit and accordingly found allegations 5.4 and 5.6 to be substantiated against the First Respondent. The allegations of dishonesty were not being pursued against the Second Respondent. The Tribunal agreed that the Respondents had failed to correct the incorrect and misleading statements given by Mr Onions and therefore found allegation 5.5 proved against both Respondents. The Respondents’ conduct amounted to a breach of the Code of Conduct and accordingly the Tribunal found allegation 5.7 to be substantiated against both Respondents.”

[245]Again, this paragraph needs to be read in close conjunction with the companion allegations set out at the start of the SDT’s Judgment. Mr Dutton was particularly critical of this paragraph during the course of his oral argument, and I share many of his criticisms. I come to this conclusion with no particular enthusiasm because many of the strongest, justifiable strictures against Mr Shaw’s professional conduct are reserved for this area of the case.

[246]Mr Dutton submitted first of all that the SDT may well have been confused about exactly when the without notice phase of the proceedings ended, and may therefore have been proceeding under the false apprehension that it subsisted during the course of the fortification hearing itself. I do not accept that submission. The allegations have been unhelpfully drafted in failing to deal with matters in strict chronological order, and the SDT has clearly tracked the allegations, but in my judgment there is nothing to indicate that it fell into error in holding that the duty of full and frank disclosure somehow continued after the case was called on before Norris J. Indeed, the SDT took care to differentiate between the contention that the Appellants misled the Court (relevant to allegation5.1 ), and the contention that they did not give full and frank disclosure (relevant to allegation

5.2 ), a matter which was of relevance to the affidavit Mr Shaw swore the day before the fortification hearing.

[247]The SDT clearly found that the Appellants should have disclosed the fact that Candy/CPC was funding the Liquidating Trust (allegation 5.2). This raises exactly the same point as allegation 2.1.3, and is well-founded for exactly the same reason. However, I have the same criticism to make about the complete dearth of reasoning and explanation regarding the brusque finding that Mr Shaw was dishonest in this regard (see allegation 5.6): more was required hereabouts, and paragraph 240 above is repeated.

[248]The SDT’s Finding that ‘the First Respondent had been dishonest in permitting Mr Onions to give the statements referred to’ has given me great cause for concern. Either it is based on an elementary misconception as to Mr Logue’s case in closing argument, or it is plainly wrong. I have referred at length to the evidence concerning the arrival of Mr Shaw at the hearing. The only tenable view must be that he arrived after Mr Turnbull had given the relevant instructions to Mr Onions. At paragraph 156.27 the SDT record Mr Wardell as having submitted that ‘the evidence is inconclusive as to whether the First Respondent had been present’. However, Mr Wardell did not abandon this aspect of his case, and Mr Fenwick is recorded as having submitted that ‘there was not a shred of evidence to make such an assertion’ (paragraph 156.65). Mr Wardell submitted to me that, if evidence is inconclusive, it must follow that the burden of proof has not been discharged – and that the SDT understood that to be the position. The first part of Mr Wardell’s submission is of course correct, but he did not formally withdraw his client’s case in this respect. If the intention was to withdraw allegation 5.4, this should have been clearly stated. The upshot is that the SDT appears to have misread Mr Wardell’s overly subtle submission and to have proceeded to make a finding in his client’s favour on this very issue. That finding was plainly wrong. It could not seriously have been in dispute that Mr Shaw arrived after the instructions had been given by Mr Turnbull. Had Mr Shaw been there, no notes would have been written and he would have given the instructions to Leading Counsel. In his absence, there is no other basis on which Mr Shaw could have permitted Mr Onions to give the statements referred to, but even if there was, the SDT has erred in failing to explain it. On any footing, the SDT’s approach to allegation 5.4 is completely unsatisfactory. It is so significant and egregious an error that it causes me to question the SDT’s conclusions elsewhere, although at the end of the day I have concluded that it would not be right for me to do so.

[249]Moving on in time beyond the fortification hearing itself, the SDT laconically stated that it ‘agreed that the Respondents had failed to correct the incorrect and misleading statements given by Mr Onions’. In my judgment, this seriously skates over some of the most troubling evidence in this case, including that touching on the correspondence with Withers in the summer of 2010. Maybe the SDT felt that, given the finding of dishonesty in relation to what happened on 21st May 2010, what happened afterwards is of little interest. However, subsequent events acquire much greater significance if the anterior finding cannot stand, which in my judgment is the situation here. But in any event the difficulty which arises is that allegation 5.5, for reasons which are entirely unclear to me, failed to allege dishonesty, leaving me with the feeling that perhaps the best, or nearly the best, case against Mr Shaw was never advanced. Plainly, it is not for me to put forward a case or to correct the way in which the parties have chosen to distil the issues between them into a carefully crafted series of allegations, and the same self-denying ordinance which applies to this Court’s approach to a section 49 appeal must equally apply to this aspect of the matter.

[250]The SDT concluded that Mr Shaw was in breach of a number of rules of the Code of Conduct, including rule 11.01, the relevant part of which provides as follows:

“You must never deceive or knowingly or recklessly mislead the Court or knowingly allow the Court to be misled”

[251]The relevant part of the guidance provides:

“Rule 11.01 makes a distinction between deceiving the Court, where knowledge is to be assumed, and misleading the Court, which could happen inadvertently. You would not normally be guilty of misconduct if you inadvertently misled the Court. However, if during the course of proceedings you become aware that you have inadvertently misled the Court, you must, with your client’s consent, immediately inform the Court. If the client does not consent, you must stop acting …”

[252]The SDT proceeded on the basis that the Court was knowingly misled: paragraph 5.4 was found proved. In such circumstances, the failure to correct the misleading statements made by Mr Onions (ex hypothesi, he innocently misled the Court having being dishonestly permitted to do so by Mr Shaw) scarcely adds to the culpability of Mr Shaw. However, if paragraph 5.4 cannot stand, what then? Would it be possible for the breach of rule 11.01 (and of the other rules identified in the allegations) to be upheld, not on the basis of conduct akin to dishonesty but on some implied finding of lesser culpability? My answer is that the evidence would certainly justify such an approach but the SDT has not analysed it in that way at all, has failed to make any relevant findings of fact, and has proceeded in any event on an entirely different premise. In those circumstances, albeit with great reluctance, I must conclude that the entirety of the SDT’s reasons as set out in paragraph 156.78 are flawed.

[253]The next set of allegations is addressed under the rubric, ‘Disclosures Regarding the New York Apartment subsequent to the Without Notice Hearing’. The SDT’s conclusions appear at paragraph 156.79, as follows:

“The Tribunal agreed that the Respondents had provided misleading information to the Court regarding the Applicant’s New York apartment after the Without Notice hearing and accordingly found allegations 6.1, 6.2 and 6.3 to be substantiated against both Respondents. Tribunal had been asked to find that both Respondents had been dishonest. The First Respondent had provided a misleading explanation to the Court regarding his knowledge of the Kahn e-mail in his seventh and eighth affidavits. The Second Respondent had assisted in the drafting of the affidavits and the Respondents had discussed the fact that the Kahn e-mail had been “overlooked”

. The Second Respondent would therefore have known that the explanation given by the First Respondent in his eighth affidavit was not true yet he had allowed it to be put before the Court. Accordingly the Tribunal found that the Respondents’ conduct as set out in allegation 6.3 had been dishonest so that allegation 6.4 was substantiated against both Respondents. The Respondents’ conduct amounted to a breach of the Code of Conduct and so the Tribunal found allegation 6.5 to be substantiated against both Respondents.”

[254]The SDT found that Mr Shaw gave a misleading explanation to the Court regarding the Kahn email in his seventh affidavit. If, but only if, the SDT’s finding in relation to the first affidavit and the Kahn email were tenable, it would follow that the SDT’s conclusion in relation to the seventh affidavit could stand; but I have found the SDT’s conclusion in relation to the first affidavit to be untenable – on the narrow basis that the SDT’s reasons are inadequate. That is sufficient for Mr Shaw’s purposes in these proceedings. I have already ventured to explain some of the issues which arise in relation to the seventh affidavit, and the SDT has grappled with none of these.

[255]The SDT also found that both Appellants were dishonest as regards Mr Shaw’s eighth affidavit. The issue which arises is whether the SDT’s reasons are adequate in all the circumstances of the case, including all my concerns about the quality of the SDT’s reasons throughout its Judgment, the frank error the SDT made in relation to allegation 5.4 (with the concomitant concern that similar errors may have been perpetrated in other respects, albeit not expressly), and all the matters urged on me by Mr Dutton.

[256]The simple and bald facts are that by the time Messrs Shaw and Turnbull were contemplating the Kahn email over the course of the period 6-8th July 2010, each was well aware that the Court had been told in Mr Shaw’s seventh affidavit that Stewarts Law had been unaware of it but the Liquidating Trust knew about it. The truth which had just emerged (assuming the best facts from the Appellants’ perspective) was that Stewarts Law was aware of the Kahn email and so was the Liquidating Trust, albeit the latter’s awareness was founded not on early receipt of the Kahn affidavit (that had not occurred) but on receipt of the Kahn email on the day it was sent. There was never any question of Mr Wiesner overlooking or taking a deliberate decision not to mention the Kahn email; that never passed through his mind. His affidavit was silent on the issue of attempted service in New York. On the available evidence, at no stage did Mr Wiesner enter into any thought process which led him to say that the reason the Kahn email was not mentioned by him ‘was because [Mr Wiesner] thought it was sufficient that the Court had been told that it was believed that Mr Logue was by then in London’. This was the explanation Mr Turnbull conceived late on 6th July 2010, was assented to by Mr Shaw, and then placed into Mr Wiesner’s mouth by the latter in the final paragraph of his eighth affidavit. This was surely designed to give the Court the impression that the fault was Mr Wiesner’s (entirely consistently with the impression given by Mr Onions during the course of oral argument), and the upshot we can see in paragraphs 31 and 32 of Roth J’s Judgment.

[257]I should return to the point that the best interpretation of these facts is that the Appellants had just learned that Mr Shaw’s seventh affidavit was incorrect, in asserting that his firm was unaware of the Kahn affidavit or its contents. If Mr Shaw knew all along that this affidavit was incorrect, it may be seen that it would less obviously and starkly occur to him that it required correction.

[258]I return to paragraphs 118-119 of Mr Dutton’s Reply (set out in full in paragraph 210 above) and entirely agree with Mr Wardell that this explanation does not stand up. There was no failure by Mr Wiesner to mention the Kahn email in his first affidavit. Service in New York had been addressed by Mr Shaw in his first affidavit. There is no evidence that Mr Wiesner thought that it was sufficient that the Court had been told, or rather would be told, that Mr Logue was by then in London. All the evidence points to this being Mr Turnbull’s explanation on behalf of Stewarts Law, not Mr Wiesner’s. If Mr Turnbull believed that this was the reason Mr Shaw had failed to mention the Kahn email in his first witness statement, this is not what we see in the 6th July emails or indeed in Mr Shaw’s eighth affidavit.

[259]I should add that the SDT’s finding of dishonesty in relation to the eighth affidavit is a free-standing one which does not in my judgment depend on any antecedent findings or layers of reasoning (or lack of reasoning). Moreover, Mr Wardell had extracted a damaging confession from Mr Turnbull (I appreciate that what the latter said needs to be read in full) on which the SDT must have placed reliance; both parties referred to it in closing argument. Further, although I have expressed concern about the lack of reasoning in relation to the seventh affidavit, the finding in relation to the eighth affidavit is a discrete one and was not linked to the previous affidavit: the case against Mr Turnbull was obviously determined on that basis because the SDT correctly understood that Mr Logue was no longer suggesting that Mr Turnbull was dishonest in relation to the seventh affidavit.

[260]In my judgment, the SDT clearly gave an adequate reason for finding dishonesty in relation to Mr Turnbull. I conclude, but with less firmness, that the reason it gave for finding dishonesty in relation to Mr Shaw was also adequate: I should make clear that the issue was a straightforward one and the evidence was overwhelming. Additionally, I accept Mr Wardell’s submission that Mr Shaw cannot satisfy the Court that he is prejudiced by any failure to provide reasons or unable to understand why the SDT reached an adverse decision (see paragraphs 51 and 58 above). In short, in navigating one’s way through the evidence and submissions which are fully set out in the Judgment, it is easy to see how and why the SDT reached the conclusion it did on this issue.

[261]As for paragraphs 156.76 and paragraphs 156.81-156.82, I believe that in the circumstances I can deal with these briefly. Only paragraph 156.76 was the subject of oral submission; in the time available, the parties were not able to deal with the remaining matters, which in any event would tend to stand or fall according to my conclusions on the primary paragraphs. In my judgment, the case against Mr Shaw that he overstated the nature of the underlying claims in the US proceedings was the weakest aspect of Mr Logue’s complaint, and Mr Wardell frankly accepted that his client would not have pursued it but for the other matters. I have already referred to the fact that the American lawyers amended the draft of the affidavit which dealt with the allegations of fraud in the US Bankruptcy proceedings. It is also clear to me that in this respect in particular Mr Shaw was entitled to expect Counsel to draw the Court’s attention to the strength of the underlying case, as well as to possible defences. Although I cannot go so far as to conclude that the SDT was not entitled to reach the decision it did, I do conclude that the SDT’s laconic reasons (as brief as its reasons elsewhere) are quite inadequate in all the circumstances of the case. The SDT has done nothing to demonstrate that it fully understood the issues, which were of some complexity, or the nature of the Appellants’ defence to these charges of misconduct.

[262]I reach the same conclusions in relation to paragraphs 156.81 and 156.82, recognising that the SDT did not find dishonesty in this latter paragraph.

[263]My overall conclusion is that the SDT’s Findings are inadequately reasoned save as regards(a) paragraph 156.77 and the misuse of confidential information, falling short of dishonesty, and

(b) the eighth affidavit.

Mr Turnbull’s Appeal Against Sanction

[264]Mr Dutton did not advance oral submissions in support of this Ground of appeal; he ran out of time. However, it is right that I deal with this Ground of appeal on the basis of the written submissions which I have carefully considered. Although paragraph 36 of Mr Dutton’s Grounds of Appeal suggest that the appeal against sanction applies as much to Mr Shaw, I observe that he advances no specific submissions in that respect, save to assert that the sanction was unjustified. I do not accept that this amounts to a proper Ground of appeal, and in any event I reject it.

[265]At paragraph 170 of its Judgment, the SDT found as follows:

“In relation to the Second Respondent, the Tribunal did not consider that the dishonesty which had been found proved against him had been carried out in a ‘moment of madness’. Whilst the Tribunal had sympathy for the Second Respondent as a young solicitor, he had still been under a duty to put right what he knew should have been placed before the Court. He should have had the strength of character to refuse to do something which he had known to be wrong. The Tribunal did not consider that there were any exceptional circumstances that would justify a penalty other than striking off in a situation where the Second Respondent had been found to be dishonest”

[266]Mr Dutton criticises this reasoning as inadequate and unclear, particularly in circumstances where Mr Turnbull gave no evidence to the Chancery Division in July 2010 or otherwise.

[267]I cannot accept Mr Dutton’s submissions. The SDT is an expert and informed tribunal particularly well placed to assess what measures are required to deal with defaulting solicitors, and the High Court pays considerable respect to its sentencing decisions. It only intervenes where the SDT’s decision was clearly inappropriate: see Salsbury v Law Society

[2009] 1 WLR 1286

. My starting point is that the SDT must be deemed to have ‘sentenced’ Mr Turnbull on the basis of all the matters proved against him. As regards the issue of dishonesty and the eighth affidavit, the SDT proceeded on the basis that Mr Shaw was taking the lead, that Mr Turnbull was working under Mr Shaw’s direction, and that Mr Turnbull had assisted in the drafting of the affidavits. The case against Mr Turnbull is clearly set out in paragraph 156.79 of the SDT’s Judgment. He knew that the case being advanced in the eighth affidavit was false but he did nothing about it. Furthermore, the SDT’s Guidance Note on Sanctions, August 2012 edition, states that ‘a finding that an allegation of dishonesty has been proved will almost invariably lead to striking off, save in exceptional cases’. In my judgment, the SDT was quite entitled to conclude that the instant was not an exceptional case, and this Ground of appeal must accordingly fail.

Disposal: Preliminary

[268]I have upheld Mr Shaw’s appeal on the reasons Ground save in relation to(a) paragraph 156.77 of its Judgment and the misuse of confidential information issue, and

(b) paragraph 156.79 and the finding of dishonesty as regards the eighth affidavit. I have upheld Mr Turnbull’s appeal save in this last respect; the findings that Mr Turnbull was in breach of various rules of the Code of Conduct stand or fall on or by the quality of the reasons applicable to Mr Shaw’s case.

[269]As yet, I have not received submissions from the parties as to what would be the right course if the Appellants’ success on appeal on the reasons issue were less than complete. On the premise that his clients were wholly successful on the reasons issue Mr Dutton submitted that I should not remit this case to a freshly-constituted SDT for reconsideration (see paragraph 92 of his Skeleton Argument). However, I cannot accept those submissions; this case is serious enough, and the evidence potentially strong enough, to justify a rehearing by the SDT in the public interest.

[270]I should also address the suggestion, only faintly advanced by Mr Wardell, that if I found for the Appellants on the reasons issue alone I could decide to conduct a rehearing of the case on appeal rather than a review. In my judgment, this case is simply too complicated to permit such a course: it could not be fairly carried out.

[271]In the light of my conclusions, the issue arises as to whether it would be unnecessary to remit this case to the SDT for a separate reason, namely that even on the limited findings of dishonesty in relation to the eighth affidavit striking off is inevitable. Although I can well see the force of the argument that the SDT struck off Mr Turnbull on the basis of dishonesty in relation to the eighth affidavit alone (and I have not upheld his appeal against sanction), and that the SDT clearly thought that Mr Shaw’s culpability was greater than Mr Turnbull’s in relation to that affidavit, I consider that I must allow Mr Dutton the opportunity to persuade me that it does not necessarily follow that Mr Shaw should be struck off having regard to those matters which remain in play against his client. It could be argued that the SDT might have taken into account against Mr Turnbull the various adverse findings, short of dishonesty, on the other matters where I have ruled that the findings are flawed, and I am also aware that Mr Dutton has an application to adduce further evidence on the issue of sanction. I say nothing about the merits of these potential arguments; I am merely indicating the probable battle lines. I am also saying that it would not be right for me to come to conclusions on these matters without giving the parties the opportunity to advance oral argument.

[272]Accordingly, this appeal must be relisted for short further argument dedicated to the issue of whether the upheld finding of dishonesty on the part of both Appellants in relation to the eighth affidavit of Mr Shaw (and, to the extent it matters, the less serious finding in relation to the misuse of confidential information) renders it inevitable that both should be struck off the Roll.

Disposal: Final

[273]Since handing down a draft of this Judgment to the parties, I have now received further submissions – both orally and in writing - on the issues canvassed in paragraph 272 above.

[274]Mr Dutton submitted that striking off is not inevitable and that, as a result, the appeal ought to be allowed and the case remitted to a freshly constituted SDT to re-determine the issue of sanction (in connection with those Findings of the SDT which I have upheld), and to conduct a rehearing of the other allegations in relation to which the appeal has been successful on the reasons issue. The starting point, he submitted, is that the sanctions imposed by the SDT against each of the Appellants necessarily fall away as a result of the partial success of the appeal because the SDT in effect imposed a single sanction in respect of the totality of the Findings made. The Appellants have not had the opportunity to advance submissions both as to the appropriate sanction and by way of mitigation on the basis of the more limited findings that now survive, and are not limited to the pleas in mitigation that were advanced below. In particular, Mr Shaw must be allowed to adduce additional character evidence relevant to the issue of sanction and mitigation. Mr Dutton reminded me that the SDT is the expert disciplinary body, not this Court, and that I have not had the benefit of seeing either of the Appellants give evidence. Furthermore, the Appellants would wish to adduce further evidence from Mr Upson, and to take steps to obtain a waiver of privilege in respect of the material referred to in his witness statement dated 13th December 2013. This is relevant to Mr Wiesner’s position and state of mind in relation to Mr Shaw’s eighth affidavit.

[275]Finally, Mr Dutton strongly submitted that, whilst striking off is the ‘normal’ sanction that is imposed in cases where a finding of dishonesty is made, it is not inevitable in the sense of being automatic irrespective of any other considerations. He drew my attention to cases where solicitors were not struck off in the face of findings of dishonesty.

[276]Mr Wardell submitted that the right question for this Court to ask is not whether it is inevitable that the Appellants should be struck off the Roll, but rather what is the right sanction in the light of their proven dishonesty. In practice, this Court can and will substitute its own judgment to the appropriateness of sanction, but even on the Appellants’ suggested approach Mr Wardell robustly submitted that the outcome should be the same: in short, there are no exceptional circumstances justifying any different course. The Appellants have shown no remorse, and a deliberate lie was told on oath to a High Court Judge. Further, Mr Wardell opposed the Appellants’ attempts to adduce new evidence, whether it be in the form of further testimonial evidence or the witness statement of Mr Upson, applying the approach of the Court of Appeal in Sharab v Al-Saud

[2009] EWCA Civ 353

. Finally, it was contended on Mr Logue’s behalf that the instant case could not be regarded as an example of dishonesty at the lower end of the spectrum.

[277]I have not found these easy questions to resolve. They are not free from doubt, and ascertaining a principled basis in the authorities for the resolution of these matters has caused me difficulty.

[278]In my judgment, and having reflected on the matter carefully, I have come to the conclusion that Mr Dutton’s principal submissions are right and must be acceded to. The issue for me is whether is it inevitable that the SDT, properly directing itself as to the law and as to the governing principles and guidance, would strike off the Appellants on the basis of the more limited Findings which I have upheld. If I were to reach that conclusion, remission to a differently constituted SDT would indeed be a redundant exercise; but this Court should in my judgment be prepared to reach such a conclusion only if clearly satisfied that there is only one tenable outcome here. In attaining this conclusion I am rejecting Mr Wardell’s preferred approach which is, or would be, to ask myself what would be the appropriate sanction in the light of the proven dishonesty. This approach elevates this Court to that of primary decision maker, which I cannot accept is appropriate as a matter of principle. Remitting the issue to the primary decision maker is the correct course unless there would be no point in so doing; that is why the inevitability test is the correct one. In setting out my conclusions in this manner, I have taken into account Mr Wardell’s submission founded in particular on paragraph 238 of the Judgment of the Divisional Court (Richards LJ and Aikens J) in Bryant and another v Law Society

[2009] 1 WLR 163

where those representing the Law Society conceded – following the Appellants’ partial success on appeal - that it was for the Court to reconsider the penalties imposed on the solicitors by the Tribunal. Mr Dutton did not make the same concession. Approaching the issue as one of principle, and accepting that it will often be sensible and pragmatic for the Court to decide the issue for itself rather than to remit if the parties acquiesce in such a course, I adhere to the view that this Court should be very slow to descend into the arena in this way.

[279]Even approaching the issue solely with reference to what is currently before me, I cannot be satisfied to the requisite standard of confidence that striking off is inevitable: a reasonable SDT could appropriately impose a lesser sanction, taking into account relevant guidance and authority (see, for example, paragraph 13 of the decision of the Divisional Court in SRA v Sharma

[2010] EWHC 2022 (Admin)

). But I also agree with Mr Dutton that I should be approaching the matter on the basis that the sanctions imposed by the SDT necessarily fall away in the light of my ruling, leaving it open to him to place fresh evidence and submissions before a differently constituted Tribunal in due course. The consequence of remission is that the issue of sanction falls to be determined by the SDT on the basis of whatever available material the Appellants seek to adduce (plainly, the SDT approaches the matter de novo, and not as a reviewing body). That said, the Appellants cannot seek to adduce evidence whose purpose is to undermine the previous SDT’s findings of fact on the anterior question of dishonesty.

[280]Put another way, the question of inevitability falls to be assessed by this Court placing itself prospectively in the position of the hypothetical SDT equipped with any additional evidence which might be adduced at that stage (and which for this purpose I have read and taken into account).

[281]I should not be interpreted as expressing any view as to the Appellants’ prospects of success in avoiding the sanction of striking off at the further hearing.

[282]I have not ignored the fact that I have dismissed Mr Turnbull’s appeal against sanction where the sole finding of dishonesty was in relation to the eighth affidavit. Although the SDT’s reasons were characteristically laconic, it must be deemed to have taken into account all the matters found proved against Mr Turnbull, as urged on it by junior Counsel for Mr Logue. I dismissed the appeal against sanction on that basis. The issue at that stage was whether the SDT’s imposition of the sanction of striking off was plainly wrong. The issue at this stage is whether the reasonable, hypothetical SDT could appropriately decide that some sanction other than striking off might be appropriate in the light of the evidence and submissions then available.

[283]It follows that this appeal must be allowed and that Mr Logue’s complaint must be remitted for rehearing before a differently constituted Solicitors Disciplinary Tribunal in the light of my Judgment. APPENDIX 1: LIST OF PARTIES’ WRITTEN SUBMISSIONS (IN ADDITION TO THEIR SKELETON ARGUMENTS) Appellants’ Note on Respondent’s References in the SDT to Roth J’s Judgment Appellants’ Note on the Effect of the Freezing Order on the Agreement for Lease Appellants’ Reply Submissions Appellants’ Note on Input to Drafting Appellants’ Note on Compartmentalisation Respondent’s Response to the Appellants’ Reply Submissions Appellants’ Skeleton Argument for the Hearing on 13th January 2014 Respondent’s Skeleton Argument for the Hearing on 13th January 2014 APPENDIX 2: 284. CHRONOLOGY Date Event Reference 24.01.05 The Respondent leaves the Retreats Group and receives a $3.65 million payment. W1/1/14-15, paragraph 48 01.04.05 The Retreats Group commences proceedings against the Respondent seeking redress for “breach of contract, breach of fiduciary duty, defamation, slander, tortious interference with prospective business relations, conversion and duress.” C1/10-33 06.04.05 The Respondent commences proceedings against the Retreats Group and Mr McGrath. Paragraph 23(d) of the Complaint alleged that Mr McGrath had been engaged in a Ponzi scheme. C1/34-57 14.09.05 Retreats Settlement between Mid-Atlantic Capital Foundation (“Mid-Atlantic”), the Respondent, Retreats Group and Mr McGrath. Mid-Atlantic obtained ownership of the Paris Apartment, assumed the liabilities and benefits of the Knightsbridge Apartments, gave up any rights regarding the Umbria property and received £185,000 in cash. C1/72-83 04.11.05-06.01.06 Eden (now Hayden) completes on three of the Knightsbridge Apartments and Emma Logue acquires the fourth. W1/1/15, paragraph 53 08.02.07 Eden (now Hayden) enters into Agreement for Lease with PGGL in relation to the One Hyde Park Apartment and First Deposit (of £1,724,055) is paid. C1/373-427 W1/1/20, paragraph 78 27.02.07 Second Deposit (of £1,149,370) is paid. W1/1/20, paragraph 78 19.05.08 Third Deposit (of £1,724,055) is paid. W1/1/20, paragraph 78 22.07.08 Liquidating Trust issues US Complaint. C1/288-324 31.07.08 According to Mr Wiesner, he mails a copy of the US Complaint to the New York Apartment. C1/325-327 06.08.08 US Complaint allegedly delivered at the New York Apartment. The Respondent says that he did not receive this. C1/325-327 16-23.12.08 Process server attempts to personally serve the Respondent at the New York Apartment on five occasions. The Respondent has given evidence that he was not in New York in December 2008. The doorman at the apartment told the process server on 18 December 2008 that the Respondent had left for work. Uncovered copy of the US Complaint left with the doorman. C1/328-330 W1/1/18, paragraph 65 02.01.09 Summons allegedly resent to New York Apartment by mail. C4/1662 08.01.09-18.01.09 The Respondent states that he was in residence at the New York Apartment over this period. The Respondent says that on arrival at the Apartment in January 2009 he discarded all of his mail unread (including the US Complaint). C3/1253 30.04.09 The Respondent vacated the New York apartment after terminating the rental agreement. W1/1/18, paragraph 68 16.07.2009 US Court enters default in the US Complaint against the Respondent and Mid-Atlantic. W1/1/18, paragraph 69 21.09.09 Liquidating Trust filed motions for the perfection of the default into a default judgment against the Respondent, Mid-Atlantic and Mr McGrath. Motion denied due to procedural failure to serve a request of hearing. C1/341-350 20.10.09 The Respondent writes to Nick Williams of Candy & Candy complaining about variations between the floor plan attached to the Agreement for Lease and the floor plan being constructed, stating that PGGL was in breach of the Agreement for Lease and requesting specific performance. C1/355-360 03.12.09 Land Registry searches in respect of the Four Knightsbridge Apartments obtained by the Candys/CPC C2/458-468 04.12.09 Emails between Mr Meis (a US Attorney for the Liquidating Trust), Mr Smith of CPC and RISC proposing that Mr Smith call Mr Evans, the Trustee of the Liquidating Trust, to discuss areas of mutual interest. C2/469 28.01.10 Email from Martin Woods (of Hermes) to Mr Meis stating, ‘can you enlighten me as to your options should you secure a judgement against Logue and identify assets of value in the UK? In essence should the economics of a proposal be positive can you apply any extra-territoriality to your judgement in an effort to secure the assets for the creditors?’ (underlining added). C2/488 12.02.10 Gordons (acting for the Respondent) sent a letter to S J Berwin (acting for companies associated with Mr Candy) referring to a call between Mr Candy and the Respondent on 8 February 2010, "Mr Candy ....proceeded to inform Mr Logue that he had received a call from a private investigator who claimed that, notwithstanding the Apartment has been purchased by our client, Hayden Holdings (a Liechtenstein based Foundation), a US based company, with which our client has never had any relationship whatsoever, was contemplating seeking a charge against "[Mr Logue's] apartment at One Hyde Park"." C2/493-494 16.02.10 A1 introduces himself to Mr Evans by email. A1 states, ‘We have recently come across Mr Logue again in the UK concerning various properties he has acquired in London through a Liechtenstein Foundation of dubious antecedents, which we understand comprised part of the highly questionable McGrath/Logue settlement. We would like to discuss with you possible ways in which this property and Logue’s other funds may be secured for the benefit of any Judgment you are able ultimately to secure against Mr Logue’. C2/495 17.02.10 Email from A1 to Mr Meis mentions that Mr Logue has some of the Knightsbridge Apartments for sale, "so the sooner we secure the assets in the UK the better, before funds disappear back into Liechtenstein". C2/496 17.02.10 Mr Meis responds to A1 stating, "we are very interested in this matter, and agree on the need for quick review and, hopefully, action." C2/496 19.02.10 Letter from S J Berwin to Gordons referring to US Bankruptcy Proceedings in the District of Connecticut and raising concerns that funds used by Hayden in respect of the acquisition of One Hyde Park may be tainted. C2/502-503 01.03.10 Meeting in Boston between A1, Mr Smith, the Trustee and the US Attorneys (including a representative from Jones Day). W1/1/57, paragraph 211 19.03.10 Letter from Gordons to S J Berwin referring to a call received by the Respondent from a private investigator from Kroll informing him that if he completed on the acquisition at One Hyde Park "the Apartment could be seized by a US bankruptcy administrator acting for a US based company with which our client has no relationship whatsoever." Gordons also state that, ‘we have carried out full checks on our client and have no doubt as to Hayden Holdings legitimacy or the provenance of its funds’. C2/551 05.04.10 Liquidating Trust files motion for entry of separate and final judgment against Mid-Atlantic and the Respondent. C2/578-580 06.04.10 Status conference before US Court. Quantification Hearing scheduled for 5 May 2010 and Liquidating Trust is required to serve the Respondent and Mid-Atlantic with evidence on which it will rely by 29 April 2010. W1/1/26, paragraph 97 09.04.10 Email from Mr Wiesner to Mr Kahn attaching documents for service on the Respondent. Mr Wiesner also states:

‘please attempt to confirm that he lives at the address below and recite any information gained in your affidavit’

. C2/618 c.12.04.10 A2 starts work on preparing evidence for Freezing Order application. A3/4/5-7 12.04.10 A1 emails Ms O’Neil thanking her for her update on the proposed service on the Respondent. C2/632 12.04.10 A2 emails Ms O’Neil asking for confirmation that the Respondent was served on 09.04.10 at his New York address. A2 also states:

‘[w]e also understood that a paralegal from your firm would be making discreet enquiries with the doorman in order to check that Logue was still resident at the New York address. Please confirm whether such enquiries have been made’

. C2/637 12.04.10 Email from Mr Kahn to Mr Wiesner stating that (i) the doorman at the New York Apartment was not familiar with the Respondent (ii) the Respondent was not included in the tenant list and (iii) that the number listed for the Respondent in the telephone directory was no longer in service. C2/642A 12.04.10 Mr Wiesner forwards Mr Kahn's email to A1, A2, Mr Evans, Mr Meis, Ms O'Neil, Ms Laukitis, Mr Peters and Mr Stern suggesting that an investigator be employed to find the Respondent. He also queried whether there was a known address to serve the Respondent in England and suggested that the papers served by mail may "if he truly moved" allow them to determine a forwarding address. C2/642A 12.04.10 Ms Laukitis emails A1 and A2 (copying in Ms O’Neil) on the same email chain containing Messrs Kahn’s and Wiesner’s emails stating:

‘I recall that you had used someone in the past to locate Logue here in NY – would it be easiest to use the same person?’

. C2/643 12.04.10 A2 emails Mr Wiesner (copying in Ms Laukitis and Mr Meis) agreeing that an investigator should be instructed as soon as possible. C2/650 13.04.10 Email from Mr Wiesner to A1, A2, Ms O’Neil, Ms Laukitis and Mr Meis informing them that he knows of an investigator called Mike Udvardy who is very good at finding people. C2/661 13.04.10 Email from Mr Wiesner to Ms O’Neil asking whether ‘Andrew’s and Craig’s client [is] going to cover the cost of the investigator?’. C2/660 13.04.10 Email from Ms O’Neil to A1 and A2 stating that she had spoken to the skip tracer (Mr Udvardy) who will be employed in an attempt to track the Respondent and asking for further information about the Respondent. C2/663 13.04.10 A2 emails Mr O’Neil with further information about the Respondent. C2/662-663 13.04.10 A2 emails Ms O’Neil asking for the final version of the documents which the process server recently attempted to serve on the Respondent. C2/664 14.04.10 Mr Wiesner forwarded an email from Mr Udvardy to A1, A2, Mr Meis and Ms O'Neil, which stated that the “initial info” was that the Respondent moved out of the New York Apartment ‘about a year ago’. C2/667 15.04.10 A2 email (in reply to Mr Wiesner’s email of 14.04.10) stating that Mr Knuckey had spoken to the Respondent and was told that he was spending two days a week in London and the remainder of the week in Trieste. C2/667 19.04.10 Ms O’Neil emails Ms Laukitis and Mr Wiesner stating that A2 has informed her that they are in the final stages ‘of preparing the necessary pleadings for the freezing order proceedings’. C2/713 21.04.10 Email from A2 to Mr Wiesner and Ms O’Neil querying how the US Attorneys proposed to deal with the issue of back pay. C2/744 21.04.10 Credit report links the Respondent to the New York Apartment C2/588-594 22.04.10 Data from the Business Register updated as at 22 April 2010 listed the Respondent’s ‘Place of residence’ as the New York Apartment in respect of his directorship of Italian company Uno Ponterosso. C2/581-587 22.04.10 Having received confirmation from Jones Day that CPC would fund the cost of enforcement proceedings before the High Court and would contribute to costs associated with expert reports and testimony, as necessary to secure the default judgment against the Respondent, Mr Evans signed and returned Stewarts Law's retainer letter on behalf of the Liquidating Trust. C2/733-737 23.04.10 The Respondent says he became aware of the US Proceedings as a result of a voicemail message left by a Mr Knuckey, who had been attempting to serve the Respondent in London with evidence relating to the US Quantification Hearing. C3/1257, paragraph 28 23.04.10 A2 emails the three draft affidavits in support of the freezing injunction to Mr Evans and Mr Wiesner. C2/756-854 23.04.10 Mr Wiesner emailed A2 stating that he had amended his draft affidavit with assistance from Jones Day. Mr Wiesner had amended the description of the allegations pursued by the Liquidating Trust, deleting the reference to constructive fraud and providing a paragraph in support of an assertion of fraudulent intent. Mr Wiesner also stated:

‘I am particularly concerned about paragraph 2, which says that I “swear in respect of matters within my own knowledge, save where otherwise stated.” Is there any place where it is otherwise stated? The allegations against Logue in our complaint are only allegations. As a technical legal matter, they are deemed to be true by virtue of his failure to contest them in the case, but it seems to me that is a different matter from me swearing on personal knowledge that they are actually true. I haven’t gone through to figure out how to deal with the issue, but wanted to make you aware of it’

. C2/855; C3/878-879 26.04.10 First Affidavit of Douglas Evans C3/904-950 27.04.10 First Affidavit of Jeffrey Wiesner C3/952-972 28.04.10 First Affidavit of Andrew William Shaw C3/999-1029 28.04.10 Mr Knuckey sends his report regarding his attempts to serve the Respondent in London. C3/1142-1149 29.04.10 Without Notice Hearing before Morgan J. Worldwide freezing order granted for c. $9.6m. C3/1056-1087 30.04.10 Verdolino & Lowey report confirmed that there were no wage or liability accruals in the Debtors' accounting records or its Auditors' work papers to suggest that the January 2005 Payment to the Respondent constituted unpaid liabilities. C3/1112-1126 30.04.10 Kahn Affidavit confirming failed attempt at service at the New York Apartment on 9 April 2010 and that (i) the Respondent was unknown to the doorman (ii) the Respondent was not listed in the resident directory, and (iii) the number listed for the Respondent in the telephone directory was no longer in service. C3/1111 06.05.10 Letter from Withers to Stewarts Law stating that Withers had been instructed by the Respondent, Hayden and Emma Logue and that they intended to apply to discharge the Freezing Order. C3/1179 10.05.10 A2 sent an email to the US Attorneys (including Jones Day) attaching Withers’ letters of 6 and 7 May, which contained information regarding the Respondent and Hayden’s UK property. C3/1171-1187 12.05.10 A1 swears his Third Affidavit confirming service of the freezing order at the New York Apartment and in London, (at the Respondent’s London address and on Gordons Solicitors) in accordance with the Order. The Affidavit exhibited a statement from Bronoco Crnobrnja, a doorman at the New York Apartment, which referred to the fact that the Respondent had moved out. C3/1222-1244; C3/1210A 18.05.10 CPC pays £24,425 to Stewarts Law W1/10/9 19.05.10 Email from Mr Wiesner advising that if the Respondent’s evidence (regarding the disposal of his mail from the New York Apartment unread) was believed “he has a good chance of the default being removed” in the US Proceedings. However, Mr Wiesner thought that the Respondent’s evidence was not very credible. C3/1285 20.05.10 A1 Witness Statement in response to the Respondent’s application for fortification and security for costs. C3/1300-1314 21.05.10 Fortification Hearing before Norris J C3/1330-1352 25.05.10 The Respondent files a motion in the US Proceedings to vacate the default. C4/1360-1390 02.06.10 Letter from Withers to Stewarts Law raising, amongst other things, the statements made by Mr Onions QC at the Fortification Hearing and asking for clarification of the position. C4/1429-1432 03.06.10 Letter from Stewarts Law to Withers enclosing notice of funding in respect of a CFA. C4/1433-1435 03.06.10 Fifth Affidavit of A1. Paragraph 54(i) states that, “the motion of default remains in place and according to Mr Wiesner it will be very difficult for Mr Logue to have this removed.” Paragraph 37 included, ‘I also consider it highly likely that Mr. Logue’s ‘blackmail’ continued until the time of the Settlement Agreement…’. C4/1436-1469 08.06.10 CPC pays £40,063.50 to Stewarts Law W1/10/9 09.06.10 Letter from Stewarts Law to Withers re: funding explaining that the Liquidating Trust had set aside $30,000 for further disbursements (principally Counsel’s fees), but that Stewarts Law’s fees for the forthcoming Discharge Hearing were covered by the CFA in place between Stewarts Law and the Liquidating Trust. Stewarts Law also confirmed that the allegation of fraudulent transfer under Section 548 of the Bankruptcy Code is one of constructive fraud. C4/1486-1488 22.06.10 CPC pays Stewarts Law £92,483.00 W1/10/9 06.07.10 A1’s Seventh Affidavit (amongst other things) responds to the Respondent’s allegation that the Kahn affidavit had been backdated and that this document had been deliberately suppressed at the Without Notice Hearing. A1 apologises on behalf of the Liquidating Trust to the Court that the Court was not made aware of the Kahn affidavit and states that Stewarts Law was not aware of the affidavit or its contents. C4/1592-1598 06.07.10 Mr Wiesner advises A2 of the explanation for the wrong fax transmission date appearing on the Kahn affidavit. Mr Wiesner reminds A2 of the 12 April Kahn email. A2 responds that this had been overlooked and asks Mr Wiesner to provide an affidavit confirming that, ‘…you did not refer to the email in your First Affidavit because by the time you swore your affidavit you believed as a result of information provided by Mr. Knuckey that Logue was in London rather than NY and that the Trust’s belief that Logue was in London rather than in New York had been communicated to the Court’. C4/1585-1587 06.07.10 – 08.07.10 Discharge Hearing C4/1599-1649 08.07.10 A1’s Eighth Affidavit confirms that the Kahn affidavit had been correctly dated 30 April 2010 and that the allegation of backdating was unfounded. A1 adds that Mr Wiesner had advised that he had been told of the facts set out in Mr Kahn’s affidavit by Mr Kahn in mid-April, but that this was not mentioned in his First Affidavit as Mr Wiesner thought it was sufficient that the Court had been told that it was believed Mr Logue was in London. A1 also explained the accidental inclusion of updated Land Registry documents in exhibit DE1. C4/1650-1656 19.07.10 Letter from Withers to Stewarts Law enquiring as to whether the CFA was a full or partial arrangement and whether Mr Candy had provided any funding. C4/1680 23.07.10 Roth J Judgment - Freezing Order discharged. C4/1685-1706 30.07.10 Letter from Stewarts Law to Withers confirming that some of the initial costs of investigating and obtaining the Freezing Order had been funded by CPC ‘on a completely discretionary basis, free of charge, and with no obligation or expectation of being repaid…in effect, a pure gift…’. Stewarts Law also state:

‘…CPC decided to assist the Liquidating Trust to determine through the disclosure provisions in the application for the Freezing Order whether the funds to be provided by Mr Logue, through Hayden, to PGGL were tainted and could not in such circumstances, be accepted…No direct or indirect benefit has or could have accrued to CPC in return for the assistance rendered, save that if Mr Logue’s evidence is accurate, there would appear to be sufficient ‘untainted’ funds available to proceed with the purchase of the property from PGGL, over and above the approximate US$10 million being claimed by the Liquidating Trust against Mr Logue in the US Bankruptcy Court proceedings’

. C4/1710-1711 05.08.10 Letter from Withers to Stewarts Law raising queries over the content of Stewarts Law’s letter of 30.07.10 and the evidence provided, and statements made, to Norris J at the Fortification Hearing. Withers state, in respect of the statements made by Mr Onions QC, that ‘it would seem that you were aware that the Court was being misled’. Withers then ask a number of questions. C4/1723-1726 05.08.10 Email from A2 to Mr Wiesner, Mr Peters and Mr Panos (copied to A1, Mr Evans and Mr Meis) referring to Withers’ letter received earlier that day and stating:

‘The way this is presented to the other side needs to be very carefully considered as part of the English proceedings and at this delicate stage of negotiations, please could everyone be acutely aware of not making any reference to Mr Candy and/or CPC Group to Logue’s lawyers without first discussing this with us. Doug Evans is acutely aware of the sensitivity in this regard’

. C4/1721 13.08.10 Letter from Stewarts Law to Withers in which Stewarts Law state (amongst other things) that:

‘[t]he way in which you have interpreted the words of Mr Onions does not fully accord with our recollection of what was being discussed and the context in which those words were said…’

. Stewarts Law also state:

‘[a]s far as we are aware, neither CPC, nor any other related party, has to date entered into any legally binding “payment guarantee” with the Liquidating Trust with regard to Solicitors fees, Counsel’s fees or disbursements incurred in relation to the pre-Judgment Freezing Order obtained and certainly not in respect of those incurred after 24 May. As previously explained, payments were made on an entirely voluntary basis on CPC’s part, and if not made, could not be compelled’

. C4/1776-1779 17.09.10 Mr Candy/CPC enter into third party funding option agreement with the Liquidating Trust in respect of the US Proceedings and subsequently, as an option fee, discharge the Interim Costs Order of £164,500 issued in the Respondent’s favour in the UK proceedings. C5/1865-1884 22.12.10 The Respondent issued an application to join CPC to the UK Proceedings for the purpose of seeking an Order pursuant to Section 51 of the Supreme Court Act 1981 requiring it to pay additional costs awarded by Roth J in the July Order. C5/2063-2065 10.01.11 Letter from Stewarts Law to Withers confirming that CPC consented to be joined to the UK Proceedings. Stewarts Law state that the ‘assistance rendered by CPC was given for the reasons already explained to you and not for the reasons speculated in your client’s Witness Statement’. C5/2066-2070 08.02.11 CPC pays Stewarts Law £50,550.00 W1/10/9 02.06.11 The Respondent serves subpoenas on Jones Day, Ms Laukitis and Ms O'Neil requesting production of all documents associated with the Respondent or Mid-Atlantic. Liquidating Trust notified of the request. C6/2276-2305 15.06.11 Jones Day discloses 4,609 pages of documents. C6/2376 07.07.11 Letter from Jones Day (copied to A1 and A2, the Appellants say, for the first time) asserting inadvertent disclosure of privileged documents. C6/2565 13.07.11 Default vacated in the US Proceedings. C7/2577-2596 09.02.12 Settlement of the US Proceedings between the Liquidating Trust, the Respondent and Mid-Atlantic. C7/2851-2860 25.05.12 The Respondent lodges his First Witness Statement at the Solicitors Disciplinary Tribunal raising allegations against A1 and A2. W1/1 19.10.12 First Witness Statement of A1 (Tribunal Proceedings) W1/2 19.10.12 First Witness Statement of A2 (Tribunal Proceedings) W1/3 30.11.12 Second Witness Statement of the Respondent (Tribunal Proceedings) W1/4 08.01.13 Second Witness Statement of A1 (Tribunal Proceedings) W1/5 23.01.13 Third Witness Statement of the Respondent (Tribunal Proceedings) W1/6 25.01.13 Third Witness Statement of A1 (Tribunal Proceedings) W1/12 25.01.13 Second Witness Statement of A2 (Tribunal Proceedings) W1/13 04.02.13-14.02.13 Hearing before the Tribunal A2-A3

Cited in 12 later judgments

and 3 more of the most senior