Mireskandari v The Law Society & Ors, Court of Appeal - Chancery Division, February 09, 2009, [2009] EWHC 185 (Ch)

Resolution Date:February 09, 2009
Issuing Organization:Chancery Division
Actores:Mireskandari v The Law Society & Ors

Neutral Citation Number: [2009] EWHC 185 (Ch)Case No: HC09C00085IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONRoyal Courts of JusticeStrand, London, WC2A 2LLDate: 9 February 2009Before :MR JUSTICE BLACKBURNE- - - - - - - - - - - - - - - - - - - - -Between :- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -Stuart Adair (instructed by RadcliffesLeBrasseur) for the AppellantHodge Malek QC (instructed by Russell-Cooke) for the 1st and 2nd RespondentsThe 3rd Respondent appeared in person Hearing dates: 20th and 21st January 2009- - - - - - - - - - - - - - - - - - - - -JudgmentMr Justice Blackburne : Introduction 1. By a Part 8 claim form issued on 14 January 2009 the claimant, who is a solicitor, seeks an order requiring the second defendant, John Gould, a partner in Russell-Cooke who are solicitors, to make and serve a witness statement which (a) confirms whether his firm has or has at any time had possession of any of the claimant's documents relating to what are described as the Employment Tribunal Proceedings, (b) states what has happened to any such documents which his firm has had but no longer has, (c) identifies the members of his firm who have access to those documents and the members of his firm who are carrying out work on the Employment Tribunal Proceedings and (d) confirms whether any of the members of his firm who are carrying out work on the Employment Tribunal Proceedings have had access to the documents or have discussed the case with those members of the SRA and/or his firm who have had access. He also seeks an order that Mr Gould deliver up to the claimant the originals and any copies of any of the Employment Tribunal files in the possession of the first defendant, which is the Law Society, or himself, or Russell-Cooke. He seeks similar relief against the third defendant, Nigel Ingram, who is a member of the Bar, except that the witness statement which Mr Ingram is required to make, so far as it is concerned with identifying those who have access to the Employment Tribunal documents, is that he should identify all persons who have had access to such documents and should confirm whether the Law Society or Mr Gould or any members of Russell-Cooke have had access to them. No relief of any kind is made against the Law Society, which is sued in its capacity as the Solicitors Regulation Authority (``SRA''), except that an order is sought that it and the other two defendants should pay the claimant's costs.2. The matter comes before me as a result of an application notice, issued on the same day as the claim form, by which the claimant seeks the relief set out on the claim form. It asks the court to grant the relief by way of an expedited hearing in view, as it is put, ``of the impending proceedings in the Employment Tribunal between the applicant and the first defendant...listed for a three day hearing commencing 21 January 2009''.The background: the Employment Tribunal Proceedings and the SRA investigation3. The background to the matter is as follows. The proceedings referred to in the claim form as the Employment Tribunal Proceedings were begun by the claimant against the SRA in the Employment Tribunal on 19 May 2008. The proceedings allege discrimination and victimisation. They followed a complaint of race discrimination against the SRA made by the claimant by service in February 2008 of a questionnaire under the relevant legislation. I have been told very little about the proceedings beyond what is set out in a witness statement made on the claimant's behalf by Nigel West of RadcliffesLeBrasseur (``Radcliffes''), who are the solicitors acting for him in this claim. Mr West refers to there being over 500 acts of discrimination and victimisation that have been identified and says that the financial value of the claim is substantial. I was told in the course of the hearing that the damages claimed are £10 million. In those proceedings the claimant is, or was, represented by his own firm which is called Dean & Dean. The SRA acts by Russell-Cooke. I was told that the hearing which is due to commence on 21 January 2009 (and is referred to in the application notice) is an application by the SRA to have the claim against it struck out. Until late into the course of the hearing before me, which began on 19 January, I was not told what the grounds of the strike-out are. I will return to this later. If those proceedings survive that challenge I am told that the trial will last ten weeks or so.4. Separate from the Employment Tribunal Proceedings has been an investigation by the SRA into the claimant's conduct as a solicitor practising as Dean & Dean. It was followed by an intervention into that practice. Relevant to this is that, at any rate until 1 December 2008, the claimant has been a partner in Dean & Dean holding a major share, indeed by 1 December the whole of the equity, in the practice. 5. The SRA is an establishment of the Law Society and is responsible, among other things, for regulatory and disciplinary matters concerning solicitors. Under section 79 of the Solicitors Act 1974, the powers of intervention given to the Law Society have been delegated to the SRA Board, which is one of the permanent committees of the Council of the Law Society, and by the Board to adjudicators in appropriate circumstances. Powers conferred by Part II of Schedule 1 to the 1974 Act are, pursuant to section 35 of that Act, exercisable in circumstances where the Society decides that the conditions set out in paragraph 1 of the schedule have been satisfied. In this particular case the relevant paragraph of the schedule is paragraph 1(1)(a)(i), where the Law Society has reason to suspect dishonesty on the part of the solicitor, and paragraph 1(1)(c), where the Law Society is satisfied that a solicitor has failed to comply with the Solicitors' Accounts Rules 1998.6. Acting in exercise of its investigatory powers, the SRA wrote to the claimant on 3 October to inform him that it was carrying out an investigation into various applications which he had made to the Law Society for exemptions from education and training requirements prior to his admission as a solicitor. The letter contained several allegations of dishonesty. On 8 October SRA inspectors attended at Dean & Dean's office and served the claimant with a notice under rule 34 of the Solicitors' Accounts Rules requiring Dean & Dean (which I shall refer to as ``the firm'') to produce their accounting records for the purpose of an investigation and also a notice under section 44B of the 1974 Act requiring the firm to deliver up specific files to the SRA. 7. The firm, then still under the claimant's control, countered by applying without notice for, and obtaining, injunctive relief in the Queen's Bench Division restraining the inspection. The application was made in support of a proposed judicial review. It was alleged that the inspection was actuated by improper motives having regard to the pending Employment Tribunal Proceedings. Eventually the matter came before Pitchford J who on 6 November set aside the injunction, refused the application for judicial review, and awarded the Law Society its costs on the indemnity basis, ordering a payment on account in the sum of £70,000. The judge found that the original without notice injunction had been obtained on partial and misleading information as to the urgency of the application and the grounds and strength of the claim. He found that the grounds upon which the Law Society based its suspicions concerning the claimant were ``substantial'' and that there was nothing which remotely justified any suspicion, let alone any inference, that the Law Society and its agents had been acting for what he described as ``oblique motives''.8. The investigation was therefore able to continue and did continue.The claimants' sabbatical9. According to the evidence filed on his behalf, the claimant decided at about this time to ``take a sabbatical for a period of at least three months'' during which he would not practise as a solicitor, would cease to hold any monies in connection with the firm's practice, would be removed from the firm's bank mandate and would not be involved in the firm's management. Radcliffes, acting on his behalf, wrote to Russell-Cooke (on behalf of the SRA) on 6 November 2008, the very day of Pitchford J's judgment, to say so. The claimant's stated purpose, according to Radcliffes' letter, was to enable him to devote his time to preparing his response to the allegations which the SRA were making against him. According to Mr Adair who appeared for the claimant before me, it was also to enable the claimant to deal with the Employment Tribunal Proceedings.10. It seems that the claimant went further. On 20 November or thereabouts, he is said to have reached an agreement with a Mr Tehrani, the former owner of the firm's practice, to transfer to him his interest in the practice. By then the claimant was the sole equity partner in the practice. I was told that this agreement resulted in a deed of transfer or assignment - I have not seen the document - dated 11 December whereby the claimant purported to transfer his interest to Mr Tehrani effective from 1 December 2008. The Law Society does not accept that this document has any validity. It says that it was an attempt by the claimant to forestall what he foresaw as inevitable - and as happened the very next day - namely, a resolution by the SRA to intervene into the firm's practice on grounds that it had reason to suspect dishonesty by him.11. Before coming to what next happened I should mention three matters. The first is that on 17 December, having given notice, the Law Society resolved to intervene in the claimant's practice on the grounds that he had breached the Solicitors' Accounts Rules. The second is that the claimant has issued a challenge to the...

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