Barnett v Solicitors Regulation Authority (Rev 1) [2016] EWHC 1160 (Admin)

Case No CO/437/2016

[2016] EWHC 1160 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

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

Date 18/05/2016

Before

MR JUSTICE GARNHAM

Between

Richard Anthony BarnettClaimant

Solicitors Regulation AuthorityDefendant

Richard Barnett in person for in person

Timothy Dutton CBE, QC and Tetyana Nesterchuk

(instructed by Russell Cooke LLP) for Solicitors Regulation Authority

Hearing Hearing dates: 28 th April 2016

Judgment

Introduction

[1]On 20 July 2015, the Solicitors Disciplinary Tribunal (“the Tribunal”) gave its decision on the disciplinary proceedings brought against Mr Richard Anthony Barnett and Mr Anthony Swift by the Solicitors Regulation Authority (“the SRA”). The judgment of the Tribunal was published on 22 December 2015. Mr Barnett now appeals the Tribunal’s decision pursuant to Section 49 of the Solicitors Act 1974.

[2]Prior to the hearing of this appeal, Mr Barnett made two applications. The first was for an order of this court that £30,000 of the monies paid by him on order of the Tribunal by way of interim payment of costs should be returned by the SRA to him to enable him to pay for the services of counsel to represent him at this appeal. His second application was for an adjournment of this hearing. I refused both those applications and indicated that I would give my reasons as part of this judgment. I do so now.

The Preliminary Issues

[3]After giving their decision on 20 July 2015, the Tribunal directed that Mr Barnett should make a payment of £115,000 on account of costs. He did not appeal that order. On 22 January 2016, having sought advice from solicitors, he agreed to pay a sum of which included the £115,000. A consent order recording that payment was prepared. That consent order was agreed and signed a month after Mr Barnett had received the reasoned judgment of the Tribunal.

[4]Mr Barnet was not able to identify any jurisprudential basis on which I might make the first order he sought, other than under s49 of the Solicitors Act (the relevant parts of which are set out below). If he was indeed pursuing this application as an appeal there are two procedural hurdles in his way. First, he was seeking to appeal the decision of the Tribunal substantially out of time; second, he was seeking to vary the terms of the consent order. I see no possible grounds on which I could properly justify holding that Mr Barnett can overcome either hurdle. There is no satisfactory explanation for the delay in advancing this ground of appeal and no adequate explanation of why he should be entitled to avoid the consequences of an order to which he agreed.

[5]In any event, as Mr Timothy Dutton QC, counsel for the SRA, points out in his written submissions in response to this application, it will be a rare case where an appeal is allowed against a costs decision of the Tribunal (see Law Society v Adcock

[2007] 1 WLR 1096

at [41] and SRA v Spector

[2016] 4 WLR 16

at [32]). It was not argued that the Tribunal misdirected itself or reached a decision which was not open to it and I see nothing that makes this case a suitable candidate for such an order.

[6]In any event there seems to me an even more fundamental difficulty with this application, namely the powers of this court. The only potential power which Mr Barnett was able to identify was that provided by Section 49. It is undoubtedly right that on an appeal to this court from the Tribunal this court has power "to make such order... as it may think fit…”. But it seems to me implicit in Section 49 that the order of the court is made having heard the appeal, not in advance of it. What Mr Barnett was seeking was an order prior to the hearing of the appeal so as to give him the funds necessary to instruct counsel to conduct the appeal. I see no power in the court to make such an order. Accordingly, that application was refused.

[7]That order effectively rendered the second application academic because the primary, if not the only, reason for Mr Barnett seeking an adjournment was to enable him to instruct counsel. The only reason he says he has not been able to instruct counsel in the past is the lack of funds. It was for that reason that he was seeking to reverse, in part, the order for an interim payment of costs.

[8]In any event, however, I would refuse the application for the adjournment on its merits. Mr Barnet submitted that the case was likely to take more than the one day allocated and that the hearing should be adjourned to accommodate a longer time estimate. However, in my judgment, given the nature of an appeal to this court from a decision of the Tribunal, and the grounds being advanced by Mr Barnett, the proper time estimate was, and always has been, one day.

[9]The parties have been on notice for over two months as to the date listed for this appeal and the time estimate. That gave ample time for both parties to prepare for the appeal. The fact that Mr Barnett says he cannot afford to instruct counsel to represent him on the appeal could not justify an adjournment. In all those circumstances there was no merit in the application for an adjournment and it was refused.

The Facts

[10]The outline history of this case is not substantially in dispute and I can take much of what follows from the SRA’s skeleton argument for this appeal.

[11]Mr Barnett was senior partner of Barnett Solicitors, a firm in which he held 98% equity. The SRA’s investigation and the subsequent Tribunal proceedings arose out of the involvement of Mr Barnett and his firm with an investment fund known as “The Axiom Fund” (“Axiom”). Barnett Solicitors received in excess of £4.8 million from Axiom which was used for general practice funding and to invest in litigation in New Zealand. Mr Barnett acted both for Axiom and the Fund’s investment manager (a firm called “Tangerine”) in redrafting the funding documentation. He also acted as a panel manager for other firms who were in receipt of Axiom funds. It was alleged that the receipt of the funds for these purposes was improper and dishonest.

[12]The Tribunal heard nine days of evidence. Witnesses were called by both parties and cross-examined by counsel for the opposing party. Mr Barnett had been represented throughout by counsel of his own choosing, Mr Timothy Nesbitt. Counsel for both parties made detailed written and oral closing submissions. The Tribunal then adjourned over the weekend and until lunchtime of the first day of the following week before giving its decision. It gave reasons for its conclusions some months later in a judgment that ran to 112 pages.

[13]Mr Barnett accepted that in acting for the Fund and for Tangerine and as a panel manager, he placed himself in a position of conflict, or at significant risk of conflict, between his own interests and the interests of his client, and between the interests of his client and his client’s investment manager. He also accepted that he failed to act in the best interests of his client, Axiom. However he denied any dishonesty either in this regard or at all.

[14]The Tribunal found that Mr Barnett’s use of Axiom’s monies for general practice funding was improper and dishonest. They found that he assisted the conduct of Tangerine despite being on notice of the serious risk that the company was acting fraudulently, that he encouraged another solicitor to change information as to that firm’s ability to continue without further funding, that he provided false or misleading information to his insurers and that he gave false or misleading information to the SRA in respect of the use of funds advanced specifically for the purposes of the New Zealand litigation. In respect of each relevant allegation the Tribunal found Mr Barnett to have acted without integrity and dishonestly.

The Proper Approach to Appeals Under s49

[15]Mr Dutton developed at some length in his skeleton argument submissions as to the approach the court should adopt on a Section 49 appeal. Although not expressly accepted by Mr Barnett, no arguments to contrary effect were advanced. I have no doubt that Mr Dutton’s summary accurately reflects the law.

[16]Section 49 of the Solicitors Act 1974 provides as follows:

“49(1) An appeal from the Tribunal shall lie to the High Court. (2) … an appeal shall lie at the instance of the applicant or complainant or of the person with respect to whom the application or complaint was made… (4) The High Court… shall have power to make such order on an appeal under this section as it may think fit…”

[17]Mr Dutton summarises the effect of case law as to the appropriate approach on such an appeal as follows: i) The appeal proceeds by way of a review rather than a rehearing. ii) The court will give appropriate weight to the fact that the Tribunal is a specialist tribunal which had the advantage of hearing the evidence first hand. It will therefore be slow to intervene with the Tribunal’s findings unless they were “plainly wrong”. iii) The court may also interfere with the Tribunal’s decision if it finds a serious procedural or other irregularity in the Tribunal proceedings.

[18]The authorities referred to by Mr Dutton, namely Shaw v Logue

[2015] EWHC 5

at [33] and [62], Benyu v Solicitors Regulation Authority

[2015] EWHC 4085

at [49] – [51], and the authorities cited in those cases, provide ample support for the summary Mr Dutton provides. I adopt that approach in considering the merits of this appeal.

The Appellant’s Approach to this Appeal

[19]In the light of my decision on the return of interim costs and the application for an adjournment, Mr Barnett represented himself before me. I say immediately that he did so with great charm and no little skill. He spoke largely without notes, and with only the assistance of a friend sitting beside him, for nearly three hours demonstrating, as might be expected, a very considerable grasp of the factual issues that underlay this case. I am grateful for his assistance, as I am for that of Mr Dutton, who represented the SRA.

[20]As indicated above, Mr Barnett had been represented before the Tribunal by Mr Timothy Nesbitt. Mr Nesbitt had also prepared, pro bono, a draft note for Mr Barnett’s use on this appeal (I will refer to this Note below as the “Nesbitt Note”). Mr Barnett adopted the whole of that Note as part of his submissions and used it extensively to give his oral submissions a sensible and coherent structure. In addition he made submissions about what he suggested was inadequate disclosure by the Authority.

[21]He referred to, but did not expand upon the Grounds of Appeal served in support of the current proceedings. I say immediately that although I have considered that document and will deal briefly with it in the next section of this judgment, Mr Barnett’s arguments were much more powerful when he was following the outline that had been prepared by Mr Nesbitt. It is to those submissions that the bulk of this judgment must be directed.

The “Grounds of Appeal”

[22]In his Grounds of Appeal Mr Barnett submitted(i) that the Tribunal was not impartial,

(ii) that he had not had adequate time or facilities to prepare his defence,

(iii) that he was unable to cross-examine witnesses or call witnesses as he wished,

(iv) that the Tribunal itself failed to call expert evidence, and

(v) that the evidence adduced by the SRA was insufficient to justify the conclusions reached by the Tribunal. For the reasons set out immediately below, I see nothing whatever in any of the first four grounds. I will return to the fifth in the next section of this judgment.

Conclusions on the Grounds of Appeal

[23]There is absolutely no evidence of bias, either actual or apparent, on the part of the Tribunal.

[24]No prior connection or association between Tribunal members and the parties is alleged. There was no complaint, at the hearing, of bias, nor that Mr Barnett was not given a fair opportunity to present his case. The hearing before the Tribunal had proceeded on the conventional basis working to an agreed timetable with detailed and lengthy closing submissions made both orally and in writing. Each party called witnesses and each party was able to cross-examine those called on the other side. As Mr Dutton submits in his skeleton argument, it is plain from the transcript of the hearing that both parties were afforded a proper opportunity to make submissions and both parties did so. It is plain from the written decision that the Tribunal considered a substantial quantity of documentation. There is nothing to suggest that the Tribunal took into account only the evidence and submission of the SRA and ignored that of Mr Barnett. On the contrary, it is apparent the panel considered the points made by both parties.

[25]The Tribunal took time to consider the evidence and submissions before coming to their conclusions. They then provided a lengthy judgment which included their conclusions on each allegation. Whilst the Tribunal found against Mr Barnett on the vast majority of the issues, there were points where they rejected the SRA’s contentions. The most notable examples went to whether honest solicitors might choose on occasion, “by mistake or otherwise”, to become involved in an arrangement to facilitate “the introductions of a party with a warehouse line of credit… to a party who could use that credit for mortgage advances” (paragraphs 35.2 and 35.8), and the date by which it was established that Mr Barnett had had reason to suspect that the monies he was being lent came from “a fraudulent or bogus scheme” (paragraph 35.09 of the judgment). It is plain from a close reading both of these passages and those where the Tribunal found against Mr Barnett, that the Tribunal were engaging with the real issues in the case.

[26]I see no evidence of actual bias. Applying the test set out by Lord Hope in Porter v McGill

[2002] 2 AC 357

at [103], I see no possible basis for an argument that a “fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the Tribunal was biased” and no apparent bias.

[27]I also reject the somewhat half-hearted submission that the Tribunal did not afford adequate time or facilities to Mr Barnett to prepare his defence. As Mr Dutton submits, Mr Barnett had been on notice of the allegations against him since 13 September 2013. He had been advised by solicitors and leading counsel when he responded to the SRA’s initial inquiries. He had provided an 80 page answer to the Rule 5 statement and responses to the SRA’s questions, which had been prepared with the benefit of counsel’s advice. He had been able to instruct highly competent counsel, namely Mr Nesbitt, to represent him at the substantive hearing and Mr Nesbitt did so. Mr Nesbitt made no application for an adjournment of the hearing. In those circumstances I reject this second ground of challenge.

[28]Mr Barnett’s third ground was that he was unable to cross-examine witnesses against him or obtain attendance of his witnesses. Again, there is nothing whatever in this. The SRA called two witnesses, a Mr Levy and a Mr Ireland, both forensic investigators who had prepared reports on their investigation. Both of those witnesses were cross-examined by Mr Nesbitt over a period of some days.

[29]Mr Nesbitt had indicated to the SRA that Mr Barnett anticipated calling only two witnesses, Mr Whelan and Mr Lindsay. Mr Whelan did indeed give evidence. Mr Lindsay did not. The reason why Mr Lindsay did not give evidence was explained on day nine of the hearing. Mr Lindsay was himself a solicitor under investigation by the SRA. He had “received advice… that he would be ill advised to subject himself to cross examination by leading counsel whilst this investigation is still ongoing”. As Mr Dutton submits, it is apparent from this that it was Mr Lindsay’s decision that prevented Mr Barnett from calling him as a witness. Such a decision by the witness himself cannot possibly form a proper ground of appeal.

[30]Fourth, it is contended that the Tribunal failed to seek expert evidence. That can found neither a complaint at common law nor under

Article 6 ECHR

. These were adversarial proceedings and it was no part of the Tribunal’s function to call expert evidence; that was a matter for the parties. Mr Barnett made no application to admit expert evidence on any issue.

[31]The issue upon which Mr Barnett suggests expert evidence was required was as to whether “the commercial funding contract was capable of and had, as a matter of fact of law been varied”. But, in my judgment, that was not a matter for expert evidence. The Tribunal itself was well able to determine matters of fact and law. As Mr Dutton points out in his skeleton argument, the Tribunal panel comprised of two solicitor members and one lay member and was assisted by a clerk who, pursuant to Rule 3(7) of 2007 Rules, had to be a solicitor or a barrister of at least 10 years standing.

[32]Furthermore, the issue of whether the funding agreement was capable of being, or had been, varied was not, in fact, in dispute. As the Tribunal observed at paragraph 33.2 “the fact of the variation was accepted by Mr Dutton on behalf of the Applicant during closing submissions”. In fact, as I read the decision, that had never been substantially in issue.

[33]Finally, Mr Barnett argues that the weight of the overall evidence was insufficient to justify the Tribunal’s conclusions. For the reasons set out above, that is only a valid ground of appeal if it justifies a conclusion that the Tribunal’s decision on any particular issue was plainly wrong. I turn to that issue in more detail below.

The Appellant’s Additional Oral Grounds

[34]In advancing his appeal orally, Mr Barnett relied upon two documents: first, a document he had prepared entitled “Appellant’s Arguments”; second the Nesbitt Note. It seems to me that it is possible from these, and from Mr Barnett’s oral submissions, to identify five further, somewhat inter-related, complaints about the conduct of the hearing and the judgment: i. The SRA had wrongly refused disclosure of relevant documentation; ii. The Tribunal treated the critical disputed issues as if they were established fact; iii. The Tribunal failed to treat his case with the same respect as it treated that of the SRA, and the judgment is as a result unbalanced; iv. The Tribunal approached the case with a “closed mind”; and v. The Tribunal reached conclusions on the stem and particulars of allegation one which were plainly wrong.

[35]I deal with each in turn.

Conclusions on the Further Grounds

(i) Disclosure

[36]Mr Barnett suggests that the SRA failed to provide proper disclosure during the hearing. In particular he said that the SRA should have complied with the Attorney General’s Guidelines for criminal cases and disclosed material undermining their case or supporting his. He refers, in particular, to documents relevant to the fact that other firms of solicitors accepted money from Axiom on the basis that the funds could be used for general practice funding.

[37]The answer to this point is a short one. Prior to the hearing, Mr Barnett had made an application for disclosure of documents; on 24 July 2014 the Tribunal had made a ruling requiring the disclosure of some documents but declining to order disclosure of others on the grounds, principally, of relevance. That ruling was never appealed or otherwise challenged. There was no other application for disclosure of documents now said to be relevant.

[38]In any event, I fail to see how it would have been necessary or proportionate to require disclosure of documents relating to investigations into other firms; that other solicitors asserted that their contracts had been varied by agreement was not in dispute. (ii). Established Fact?

[39]Having set out the allegations made against Mr Barnett and his co-respondent, Mr Swift, and identified the documents they had taken into account, the Tribunal turned to what they called the “factual background”. This section of the judgment was divided into seven parts. It was followed by a section entitled “Applicant’s Supplemental Facts (including some submissions)”. That latter section set out supplementary assertions advanced by the SRA in support of their case. At first blush, the first section, the factual background, appears to have been intended as a neutral summary of the facts relevant to the case against the two Respondents.

[40]It is plain, however, that although much of that section consists of a summary of uncontentious elements of the history, there are interspersed within it descriptions of events that are very much in dispute. Notably at 16.1 the judgment reads as follows:

“16.1 Monies provided could be used only for two specific purposes (clause 2 of the LFA), which were: • to fund “Eligible Legal Expenses”, as defined in clause 1.1, essentially disbursements in respect of a claim evidenced by an invoice (the use of the loan to fund the Firm’s own costs was specifically excluded); and • to fund the insurance premium relating to the Financial Guarantee Insurance (“FGI”).” • to fund “Eligible Legal Expenses”, as defined in clause 1.1, essentially disbursements in respect of a claim evidenced by an invoice (the use of the loan to fund the Firm’s own costs was specifically excluded); and • to fund the insurance premium relating to the Financial Guarantee Insurance (“FGI”).”

[41]At paragraph 24 the following appears:

“24 The Firm used, or substantially used, the monies for the following purposes, none of which were permitted under the Litigation Funding Agreement: 24.1 About £1,677,500 was used to repay lending from RBS in September 2012, following which the bank’s security over the Respondents’ personal assets was released; 24.2 £216,000 (of the total funding of £859,054.33 advanced for that purpose) was used purportedly to fund the conduct of the MV Rena litigation by New Zealand lawyers; 24.3 The balance of the funding, or a substantial part of it, was used to fund the general overheads of the Firm (e.g. £300,000 used to pay the Firm’s professional indemnity insurance (“PII”) premium, including the conduct of wip (despite the fact that the LFA specifically excluded the funding of the Firm’s costs in the definitions of “Legal Expenses” and “Eligible Legal Expenses” in clause 1.1.”

[42]Mr Barnett takes particular exception to the inclusion of those paragraphs in what is said to be the “factual background” to the case. He says the whole burden of his defence was that monies were properly provided under the funds for purposes much wider than the two identified in paragraphs 16.1. He says the essence of his defence was that monies were used for the purposes described in paragraph 24 in accordance with an amendment to the contract which had been affected by an express oral variation agreed between him and representatives of Tangerine. He says that to assert that monies were used for purposes “none of which were permitted under the litigation funding agreement” is to pre-judge what was the central issue in the case.

[43]I have some sympathy with Mr Barnett in this regard. The reality is that what is contained in the factual background is not just uncontentious matters of history but also conclusions on issues that went to the heart of the case.

[44]It would be a mistake, however, to assume that because the Tribunal chose to structure its judgment in this way that it had necessarily reached its conclusions without considering the defence as a whole. On the reading of the judgment as a whole, it seems to me wholly unrealistic to imagine that the Tribunal reached the conclusions set out in the introductory sections before it had carried out the analysis described in the latter parts.

[45]The operative part of the judgment of the Tribunal, in this case as with many other judgments of professional disciplinary bodies, is structured to address in turn each of the heads of charge advanced by the prosecuting authority. Accordingly it is not a “free form” judgment of the sort that might be handed down by a court. The Tribunal works through each allegation and sub-allegation, reaching conclusions on each. It does so even where a particular conclusion on a particular allegation may be entirely unsurprising. It is only where the cumulative effect of the allegations found proved is analysed that the effect of the judgments can properly be understood. The result is that it can be misleading to focus too greatly on any particular part of a judgment without having regards to its place in the decision read as a whole.

[46]The parts of the background facts to which Mr Barnett objects are, in substance, findings of fact. Those findings are explained in the relevant parts of the Tribunal’s analysis of the allegations made by the SRA later in the judgment. The merits of this appeal must be tested by considering that analysis and I address that below. The, admittedly unfortunate, impression left by the opening sections of the judgment cannot, in my view, be determinative of the appeal as a whole. (iii). A Balanced Approach?

[47]Mr Barnett makes a second, similar, criticism of the structure of the judgment. He observes that whilst the Tribunal sets out, in a section entitled “Applicant’s Supplemental Facts (Including some Submissions)”, much of the SRA’s case on the facts, there is no corresponding section setting out his version of events.

[48]Mr Dutton suggests that it is sufficient that the judgment sets out the submissions advanced by Mr Nesbitt at length. I am not wholly persuaded by that. The Judgment does indeed set out Mr Nesbitt’s submissions but it also summarises those of Mr Dutton. What is significant is that there is no equivalent of the “Supplemental Facts” section and that leaves an impression of a lack of balance in the approach of the Tribunal.

[49]Whilst it is regrettable, I do not see this lack of balance in the structuring of the judgment as a serious procedural irregularity sufficient to undermine the judgment. It does not, in my view, reflect some underlying unfairness in the procedure adopted by the Tribunal. On the contrary, it seems to me that the procedure was entirely fair. In truth, this complaint goes to matters of form, not substance.

[50]That lack of balance, however, has caused me to consider particularly carefully whether, when the Tribunal comes to consider the matters in dispute, it does so properly and rationally. But as with the previous ground, it cannot be decisive of the appeal in itself. That must depend on whether Mr Barnett has established that the Tribunal’s findings were not ones the Tribunal were entitled to reach. (iii). Closed Minds

[51]The document “Appellant’s Arguments” addresses what Mr Barnett describes as the “substance my appeal”. He indicates that what he had called in his Grounds the “bias” of the Tribunal might better be described as the “closed mind of the Tribunal”. He says that the Tribunal allowed itself to be “swept along” with the SRA’s “fraud” theory without properly examining such evidence as there was in support of that theory.

[52]This allegation builds on the matters discussed above under the headings “Established Fact” and “A Balanced Approach”. Mr Barnett argues that the Tribunal’s treatment of what were matters in dispute as matters of established fact, and their recording of the factual matters put forward by the SRA but not those relied on by him, demonstrates that the Tribunal had closed its mind to the possibility that, in fact, there was no fraud and that his dealings with the Fund and its representatives were proper and honest.

[53]In my judgment that argument cannot survive a reading of the whole judgment and in particular the Tribunal’s consideration of the individual allegations. I deal with this in some detail in the following section, but essentially it seems to me clear that the Tribunal reached its conclusions after a close consideration of all the evidence and all the competing arguments, and not as a result of closing their minds to one side in the debate. (iv). The Allegations

[54]The Tribunal turned to the reasons for its decision at paragraph 33 (page 59) of the judgment. It dealt with each of the allegations one by one. It is the first allegation, and its sub paragraphs, that is the focus of the Nesbitt Note.

[55]The first allegation was that Mr Barnett had caused or permitted his firm to accept and use monies received from an investment fund totalling £4,861,399.33 in circumstances when it was improper for him to do so for each of seven reasons. The first of those reasons was that he knew that the firm had not complied with the terms of the LFA pursuant to which it was alleged the monies were advanced.

[56]There was no dispute between the parties that the firm had accepted the monies specified from the Fund. There was in reality no dispute with the proposition that in doing so the firm had not complied with the terms of the LFA. The essence of Mr Barnett’s case was not that the loan was in accordance with the LFA but that the LFA had been varied orally by Mr Rae on behalf of Tangerine in advance of his signing the agreement. The fact that Mr Rae had purported to vary the agreement so as to permit general practice funding had been accepted by Mr Dutton on behalf of the SRA. There was in substance no dispute that the firm had not complied with the terms of the agreement; Mr Barnett’s whole case was it had been necessary to amend that written agreement orally. In those circumstances the concluding sentence of paragraph 33.4 dealing with allegation 1.1 was not only true but uncontentious. That sentence read “it was obvious that reliance on an oral variation of the LFA’s terms would have been unnecessary if the firm was complying with the original terms signed up to”. The Tribunal therefore found that particular 1.1.1 was proved beyond reasonable doubt.

[57]In the succeeding paragraphs the Tribunal found that Mr Barnett knew that his firm had not complied with the terms of the LFA. Again, that is not surprising because his case had been that that agreement had been varied.

[58]Similarly the Tribunal appeared, for good reason, to have had no difficulty in finding that allegation 1.14 was proved. That alleged that Mr Barnett misused funds received by failing to apply them only towards “eligible legal expenses” as defined in and required by the LFA. Since the whole point of the alleged amendments to the LFA were to widen the scope of the permitted uses of the funds, the fact that they were not applied to the expenses identified by the LFA was hardly surprising.

[59]Much more significant to the Tribunal’s eventual decisions were its conclusions on allegations 1.13, 1.15 and 1.16. Allegation 1.13 charged that “he had no intention that the firm would repay the monies within the time required by the LFA and or knew or was reckless as to the fact that payment was very unlikely”.

[60]Mr Barnett’s complaint about the Tribunal’s response to allegation 1.13 is summarised in the Nesbitt Note. It is said that the firm’s Practice Manager and Chief Executive, Mr Whelan, had been in charge of financial planning and had made it clear that financial forecasting was his department. He said, in effect, that he had approved the borrowing. He had produced substantial documentation evidencing the financial projections that had been made and demonstrating how they could support the borrowing. It was the Appellant’s evidence that he had accepted Mr Whelan’s analysis and judgment. Mr Barnett contended that a proper treatment of this issue required a description and analysis of this evidence. He says that in fact, despite its length, the Tribunal’s decision on this allegation does not contain sufficient analysis.

[61]I reject that complaint. It is not necessary in a judgment by a disciplinary body for each and every element of the evidential case presented to it to be described. It is sufficient if it provides enough of an explanation of its thinking to enable the respondent, or any other party, to understand the Tribunal’s conclusions. Paragraphs 33.6 - 33.8 provide a powerful demolition of the Appellant’s case. Essentially, the argument now advanced by Mr Barnett amounts to no more than disagreement with the Tribunal’s conclusions. That is not a valid ground of appeal under Section 49. I cannot see how it can be said that the Tribunal was plainly wrong on this issue.

[62]Allegation 1.15 charged that “despite being on notice of the serious risk that the investment fund’s investment manager, in arranging for the monies to be paid to the Firm, was acting fraudulently, or committing some other serious breach of duty, towards the investment fund and/or the ultimate investors, he failed to carry out any or sufficient enquiries reasonably to satisfy himself that the payments did not involve any such conduct by the investment manager”. The Tribunal addresses that allegation at paragraphs 33.10-33.11 of the judgment.

[63]In the Nesbitt Note it is said that:

“The Appellant’s case in relation to this was that he believed and trusted the people he was dealing with and understood that their activities were being supervised/involved the scrutiny of a large number of other professionals, including auditors and the directors of the fund, who all seemed to him to be highly reputable people. His case was that when rumours appeared on the internet he asked questions about the issues and whether there was anything in it, and trusted the re-assurance he was provided with. Rightly or wrongly he believed what he was told and that the rumours were untrue. Such trust may have been misplaced, but the Appellant contends that a finding of whether he was ‘on notice’ that he was dealing with people who were fraudsters (or committing other serious crime) needed to include a consideration and analysis of his state of mind, and, assuming it were accepted that he believed what he was being told, analysis and explanation of how that was consistent with him being ‘on notice’. Again it is contended by the Appellant that there is no adequate analysis of this in the judgment.”

[64]In his “Appellant’s Arguments” document Mr Barnett argues that:

“a highly reputable firm of UK accountants (Baker Tilly) introduced me to the Axiom Fund managers to enable me to obtain general practice funding. The fund managers were aware that we needed general practice funding and said that it was something they were happy to arrange. The existing Axiom Fund loan documentation was ‘ill fitted’ for general practice funding but that the funds managers were looking to further develop general practice funding and were confident that there funding model permitted general practice funding. The Axiom Fund had its own lawyers, financial advisers and was subject to its own regulatory process. So my firm applied for and accepted the general practice funding”

. He goes on, “I just do not see what we did that was wrong. At the time of the borrowing we believed we were acting properly and that there was nothing untoward in the borrowing.”

[65]In my judgment, none of these arguments properly engage with the Tribunal’s reasoning. As the Tribunal observed, by 1 June 2012, Mr Barnett had reviewed the LFA and had seen the supplementary offer memorandum (the “SOM”) of January 2012. It was plainly open to the Tribunal to conclude on that basis that he was aware that Tangerine was acting contrary to the documents establishing the Fund and was in serious breach of duty towards the Fund and its investors. Mr Barnett had accepted in evidence that he had become aware of evidence suggesting that Mr Schools was acting improperly; but nonetheless the firm increased the level of its borrowing from the Fund. In those circumstances, and for the reasons set out in paragraph 33.10 of the Tribunal’s judgment, it was plainly open to the Tribunal to conclude that Mr Barnett was on notice of the serious risk that Tangerine was acting in breach of duty towards the investment fund.

[66]Faced with that evidence, it was entirely reasonable for the Tribunal to conclude that Mr Barnett failed to carry out any proper enquiries to satisfy himself that the payments did not involve fraudulent activity by the investment manager. He could not simply sit back and rely on the assumed honesty of the fund manager. Nor could he rely on the advice he had received from Baker Tilly once he was on notice that there were reasons to doubt the honesty of those involved in the management of the Fund. The Tribunal gave entirely adequate consideration to what must have been Mr Barnett’s state of mind, sufficient to enable them to conclude that he was acting dishonestly.

[67]The same can be said about the analysis that led to the conclusions in respect of allegation 1.1.6 at paragraph 32.12. Allegation 1.16 charged that he had “unreasonably risked the firm being a party to transactions in fraud of the investment fund and or of the ultimate investors, or which involved other serious breach of duty by the investment manager towards them (or one of them)”.

[68]The Tribunal were entitled to find that Mr Barnett knew the substance of what was said in the SOM by mid May 2012, and had received the full “suite of documents” by 1 June 2012. That meant that the majority of the funds were received by his firm after he gained that knowledge. He knew that Mr Rae and Mr Schools, the investment managers, were not complying with the terms of the SOM or the LFA. He also knew that they had a personal invested interest in the operation of the scheme. Nonetheless, on the Tribunal’s findings, the firm continued to apply for and obtain very substantial sums of money.

[69]There is nothing inherently wrong in that analysis. The ultimate position is that Mr Barnett disagrees with the Panel’s conclusions. But, as noted above, that is no ground of appeal.

[70]Mr Barnett makes no specific complaint about the remainder of the judgment. Having considered it closely, it is my view that he is right not to do so. In particular, I can see no flaw whatsoever in the Tribunal’s conclusions on dishonesty.

Conclusion

[71]In my judgment, it cannot possibly be said that the decision of the Tribunal was clearly wrong. There was no serious or procedural irregularity. None of the grounds advanced by Mr Barnett, whether in writing or orally, justify the court interfering with the decision of the Tribunal. This appeal is dismissed.