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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Virdee v The Law Society [2006] EWHC 241 (Admin) (03 February 2006) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2006/241.html Cite as: [2006] EWHC 241 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2
		3rd February 2006

Friday, 3rd February 2006

1. LADY JUSTICE HALLETT: On 31st May 2005 the appellant, Mr Virdee, appeared before the Solicitors Disciplinary Tribunal facing seven allegations. He admitted the first two. The third and fourth allegations were ordered to lie on the file and the final three allegations were withdrawn with the consent of the tribunal. At the conclusion of the case the tribunal ordered that the appellant be suspended from practice as a solicitor for 6 months commencing on 27th June 2005. They intended thereby to give him a month to put his affairs in order. The tribunal also ordered him to pay one half of the Law Society's costs. The suspension from practice has itself been suspended pending resolution of this appeal against the penalty imposed on the grounds that it was excessive in all the circumstances.
2. The two allegations admitted by Mr Virdee were as follows: (1) whilst involved in a property dispute with his brothers he created, and registered with the Swansea District Land Registry, a sham option to purchase property owned by a company (SIL), in which he had an interest, to prevent any other shareholder, and in particular his brother ASV, from disposing of the property; (2) whilst involved in a property dispute with his brothers he, acting as a director of a company (SIL), in which he had an interest, signed and submitted to the Companies Registry, documentation, including a form 288b, purporting falsely to show that another of his brothers, SSV, had resigned as a director of the company some five years before, with the purpose of preventing any other shareholder, and in particular his brother, ASV, of disposing of the property.
3. The background to the allegations is as follows: SIL was a family company in which six shares had been issued; two shares were owned by the appellant, one by his wife, and the other three by ASV, the appellant's brother. The family disagreed as to the disposal of SIL's assets which included property. The appellant said that the assets were effectively held in trust for him and his retirement. He wanted to keep them. ASV, however, wanted to sell them. ASV purported to do just that. This was an act which Mr Virdee, the appellant, described as illegal.
4. In 1998 ASV arranged the sale of a property in King Street, Southall, to CS and PK, tenants of the ground floor. Mr Virdee insists that the exchange of contracts took place without his knowledge. There had been no resolution of the board of the company to authorise the sale.
5. CS and PK brought an action to enforce their contract for sale in the Chancery Division before Patten J. It was as a result of this litigation that the allegations against Mr Virdee, the appellant, came to light. It was discovered during the litigation that on 6th March 1998 the appellant, as a director of SIL, granted an option to purchase the property in King Street to HP, a friend of his and the third defendant in the litigation before Patten J. The option was registered by the appellant in the relevant Charges Register and was contained in an agreement dated 6th March 1988. Under the terms of that agreement there was consideration of £100. HP was granted an option to purchase King Street for £60,000 within a five year period.
6. During the course of the trial, the following facts were established to Patten J's satisfaction. Firstly, that the consideration of £100 was never paid. Secondly, the £60,000 figure was an undervaluation by at least £40,000. Thirdly, the £60,000 figure was just below the threshold for payment of stamp duty. Fourthly, the option agreement was a sham prepared and registered by the appellant to prevent ASV's sale of the property to the claimants in the Chancery Division action.
7. The appellant conceded in evidence before Patten J that it was never intended for the option to be enforced or to have any legal effect. Before us he agreed that this was the effect of his evidence. Patten J held that the option, sham as it was, was a device which showed how determined the appellant was to prevent the sale. He found that the third defendant before him, HP, was under Mr Virdee's control at all times.
8. I turn to the background to the second charge. By letter dated 4th August 1997, the appellant complained to the Registrar of Companies that SSV, his brother, had been appointed without his knowledge or consent to the board of SIL. He invited the registrar to amend the record. By letter dated 27th August 1997 Companies House showed the appellant the notice of appointment for SSV received in July 1994. They enclosed with their letter the relevant form 288b for his resignation. Later the same month the appellant asserted that the appointment of SSV as a director was fraudulent as it had been done without the appellant's consent or any formal meeting of SIL.
9. By reply the Registrar of Companies gave the appellant four options to correct the public record. The options were: filing an amended form 288a to be placed alongside the original; filing a resignation form, that is form 288b; obtaining a court order to the effect that the file was incorrect so that the appropriate document could be noted accordingly; or, finally, obtaining a court order specifically directing the Registrar of Companies to remove the document filed.
10. In evidence before Patten J, the appellant admitted that he had completed, signed and dated a form 288b in 1999 purporting to show that his brother, SSV, had resigned as a director of SIL and that the resignation had occurred five years previously in 1994. In evidence the appellant said that SSV was not a director at any time and he merely wished to rectify the register. He accepted, it seems, before Patten J, that the correct position would have been to go to court, but he said that he could not afford to do that. He therefore completed the documentation in the way that he did, which, as I read the papers, he accepted before Patten J was not a legitimate option available to him.
11. We have also had drawn to our attention the fact that the form is dated some 9 months after the exchange of correspondence with the Companies Registry and at a time when Mr Virdee should have been well aware of the appropriate procedure, he having gone through that procedure to remove his other brother as a director.
12. Before the tribunal, the Law Society did not allege dishonesty. They accepted that the appellant had lost all sense of objectivity in a heated family dispute. For my part I have no doubt that this dispute was heated. The appellant accepted that none only had he lost his objectivity but he should have known better. He further accepted that his misconduct took place on more than one occasion.
13. Although before the tribunal it appears to have been accepted by counsel, who then appeared for him, that his right to practice was in the balance, Mr Virdee, in person before us, seeks to argue that given all the circumstances the decision to suspend him was excessive. He has reminded us in both his written and oral submissions that he was admitted a long time ago and apart from these matters, which arose solely from a bitter family dispute, he has had an unblemished career in the law.
14. He further argued, somewhat surprisingly in my view, that the decision to strike off a solicitor cannot be distinguished from the decision to suspend a solicitor because both result in a solicitor not practising. He reminded the court that the tribunal had found that the ultimate penalty of striking-off was not appropriate in this case and sought to argue that the penalty of suspension was not therefore appropriate either. .
15. We were reminded that these were isolated incidents which were not committed in the course of his professional career. Mr Virdee accepts that his actions may be described as stupid and improper and even an error of judgment, but he insisted repeatedly that he was not behaving dishonestly. He was anxious to assure us that, as he put it before us, he always genuinely believed that what he was doing was right.
16. For my part, having seen the concessions he made before Patten J, I find that somewhat hard to accept. In any event, Mr Virdee was anxious to take us through some of the difficulties he faced in trying to protect SIL and in trying to protect SIL's assets. These were assets that, he informed us, he has worked hard all his life to build up and he wishes to preserve for his retirement for the benefit of his wife and family.
17. On the other hand, he argued that his brother or brothers have behaved themselves illegally. Mr Virdee wished us to qualify the words in the allegations "disposing of the property" by the word "illegally" because he was anxious to assure us that his conduct was only in response to the illegal activities of his brother, ASV.
18. I have considered all those submissions in relation to the background to the allegations with some care. I do not intend to rehearse them during the course of this judgment, but I can assure Mr Virdee that I have considered all the documentation that he has put before us.
19. Included in the documentation are a number of references in which Mr Virdee is described in glowing terms. He is described as an honest, reliable and trustworthy man. He is well-known for his enthusiastic charity work. He is held in high regard in his community, of which he is a prominent member. Mr Virdee does a considerable amount of work for the local Sikh temple and he wished to assure us that people who instructed him in the past, including members of the temple, still instruct him. They have no doubt that he is a man of integrity. Mr Virdee argued that this shows that the reputation of the profession has not been diminished by his behaviour. He submitted that if a member of the public knew all the facts they would understand why he behaved as he did and they would understand why a lesser penalty, such as fine, was imposed.
20. Further, Mr Virdee argued that his personal mitigation amounts to exceptional circumstances. He has suffered from ill-health for a number of years. A medical report was provided which listed a number of complaints from which he suffers, including angina, coronary disease, and hypertension. He is advised, not surprisingly, to avoid stressful situations which might trigger a stroke.
21. Mr Virdee has also informed us that his wife has unfortunately recently been made redundant and he is now the sole bread winner. He has two sons at university. He argued that if he remains suspended from practice his sons may be forced to give up their studies because he could not afford to assist them financially.
22. As far as his firm is concerned, he told us that there are but two partners, himself and his daughter who has been qualified for five years. He argued that she requires supervision by him, albeit it is not officially required by the rules of the Law Society.
23. He also submitted that a suspension of 6 months will inevitably lead to the loss of clients from the firm and it may lead to the firm having to close.
24. We were also reminded that Mr Virdee is still engaged in complex litigation with his family and if suspended he claims he will have to instruct solicitors to act for him at substantial costs. He estimates the cost of the litigation as a whole at £250,000. He reminded us that he has already spent a considerable amount of time, and therefore lost money, in preparing for the tribunal hearing and indeed for this appeal. These proceedings have been hanging over him for some 4 years.
25. He submitted that if the tribunal accepted that a suspension of 6 months was sufficient that must mean that they considered he would be fit to return to practice after that time. If he is fit to return to practice at all, then the penalty of suspension was unnecessary and excessive. He submitted the appropriate course for the tribunal to have adopted in this case was a fine.
26. Mr Marriott, who appeared on behalf of the Law Society to assist the court, reminded us that the Solicitors Disciplinary Tribunal was established to maintain high standards within the profession. He argues that therefore any mitigation advanced by Mr Virdee would be of considerably less weight than it might be in the criminal courts. He submitted, and Mr Virdee took great exception to this, that an analysis of the admitted allegations would lead any reasonable observer to conclude that the appellant's behaviour was not far short of being dishonest.
27. Both Mr Marriott and Mr Virdee reminded us of the observations of Sir Thomas Bingham MR (as he then was) in the well-established case of Bolton v Law Society [1994] 2 All ER 486 at page 491. For these purposes Ineed only to recite the headnote which accurately summarises the effect of Sir Thomas Bingham MR's judgment:

"A solicitor who discharged his professional duties with anything less than complete integrity, probity and trustworthiness had to expect severe sanctions to be imposed upon him by the Solicitors Disciplinary Tribunal, and except in a very strong case, an appellate court should not interfere with the sentence imposed by the tribunal. The decision whether to strike off or to suspend involved a very difficult exercise of judgment made by the tribunal as an informed and expert body on all the facts of the case, and only in a very unusual or venial case would the tribunal be likely to regard as appropriate an order less severe than one of suspension. Furthermore, because orders made by the tribunal were not primarily punitive but were directed to ensuring that the offender did not have the opportunity to repeat the offence and to maintaining the reputation of the solicitor's profession and sustaining public confidence in its integrity, considerations which would ordinarily weigh in mitigation of punishment had less effect than in criminal cases and so it could never be an objection to an order of suspension in an appropriate case that the solicitor might be unable to re-establish his practice when the period of suspension was over."

28. Mr Virdee, firstly, again reminded us that his admitted conduct in this case did not relate to his professional duties. This was conduct in relation to his personal life and the litigation involving his brothers.
29. He also reminded the court of the decision in Langford v Law Society [2002] EWHC 2802 Admin, in which the Vice President of the Court of Appeal, Criminal Division, Rose LJ, gave the leading judgment. In that case Rose LJ, at paragraph 14, said that "a greater flexibility is now appropriate in dealing with these appeals." This proposition was approved in the case of Gurmit Singh Nahal [2003] EWCH 2186 (Admin), of which we have a transcript. The judgment was handed down on 24th July 2003.
30. Mr Virdee argues, therefore, that within the terms of Bolton, and exercising the flexibility referred to in Langford, this is a very strong case and we should interfere with the sentence imposed by the tribunal. He argued that his personal circumstances, and the circumstances that lead his behaviour are exceptional.
31. I am forced to disagree. This is not, in my judgment, an exceptional case, and nor do I consider it to be a case in which a financial penalty would have been appropriate. In my view this was serious misconduct. It was deliberate and it involved deceit, whatever Mr Virdee's intentions may have been. I reject, on the basis of admissions he has made in the past, that he could always have believed that what he was doing was entirely above board and proper. On the basis of what he said to Patten J he cannot have done.
32. The appellant is a solicitor. As such he is an officer of the court. In my view this conduct fell far below the standards that the public are entitled to expect from members of the profession. The public is entitled to expect that solicitors will act with the utmost integrity at all times. Therefore, whatever the provocation, in my view, as the tribunal found, this conduct was simply inexcusable. Despite Mr Virdee's very powerful mitigation, and I accept it is very powerful mitigation, the penalty was well within the range of penalties appropriate for this kind of behaviour, as appears to have been conceded before the tribunal. In any event it was an appropriate penalty and it is not one with which I am prepared to interfere.
33. For those reasons, for my part, I would dismiss this appeal.
34. MR JUSTICE OWEN: I agree.
35. MR MARRIOTT: My Lady, there is just one issue outstanding, that is the issue of costs. A schedule was submitted by me, the total is £7,716. It includes the cost of the transcript. Then I omitted to realise that I was instructed until well after the consent order dealing with the suspension of that sentence, so there is a further £699 relating to that, which brings a total of just over 8,400. There has been some saving on time today, and in those circumstances I would be content if the court would be prepared to assess it in the round sum of 8,000.
36. LADY JUSTICE HALLETT: Mr Virdee?
37. MR VIRDEE: To be taxed if not agreed.
38. LADY JUSTICE HALLETT: So you are inviting us to make an order that they should --
39. MR VIRDEE: They should be taxed if not agreed.
40. MR JUSTICE OWEN: Yes, Mr Marriott, I am looking at the summary of assessment and I am looking in particular at the work done on documents.
41. MR MARRIOTT: Yes, my Lord.
42. MR JUSTICE OWEN: 15.54 hours. I am bound to say that on the face of it I find it a little difficult to understand why 15, almost 16, hours would have been spent on documents in preparation for this appeal.
43. MR MARRIOTT: It is not, obviously, just on the documents. It is a totality of the preparation of the case. There is no other heading for preparation. So it includes up to and the final preparation last night, including the skeleton argument.
44. MR JUSTICE OWEN: Yes.
45. MR MARRIOTT: The reason for that, my Lord, is that the documents were quite extensive. You have them all. There is not only the judgment of Patten J, there is the entire transcript, then there are the findings, and then there was a Rule 4 statement, and then there is the entire transcript of the proceedings before the tribunal.
46. LADY JUSTICE HALLETT: So, in other words, in the summary of costs attendances, negotiation, preparation, come under the heading "Work Done on Documents".
47. MR MARRIOTT: Effectively I spent 15 hours on the case.
48. LADY JUSTICE HALLETT: So it is preparation really?
49. MR MARRIOTT: Yes.
50. LADY JUSTICE HALLETT: Help me, please, as to attendances on others.
51. MR MARRIOTT: Others will be the court. There would be also attendances on other people such as the firm that instructed me to do this work. Sorry, I have not explained myself very clearly there. Obviously there had to be some liaison with the advocate from the tribunal and that refers to that.
52. LADY JUSTICE HALLETT: When it comes to attendances at the hearing, that is just you, is it?
53. MR MARRIOTT: Yes, there is no claim for anybody --
54. LADY JUSTICE HALLETT: You do have an array -- we are delighted to see them, of course -- but I do not see why Mr Virdee should pay for them.
55. MR MARRIOTT: No, there is no claim for them at all.
56. LADY JUSTICE HALLETT: Very well, costs in the sum of £8,000, Mr Virdee. Do I have to say whether or not that includes VAT? I never remember.
57. MR MARRIOTT: You just say the total sum of £8,000 my Lady, that will be fine.
58. LADY JUSTICE HALLETT: Thank you.