Razzaq v Financial Conduct Authority (FCA)

The Court of Appeal dismissed the appellant's renewed application for permission to appeal the Upper Tribunal's decision upholding the Financial Services Authority's prohibition order and cancellation of permission under the Financial Services and Markets Act 2000. The Upper Tribunal had found deliberate fraud, misuse of a client's account and unauthorised acting as an intermediary; the Court of Appeal concluded that those factual findings were supported by a cogent evidential foundation and that the correct standard and burden of proof had been applied.

The court rejected complaints about witness procedure, the non-calling of particular witnesses, alleged breaches of Article 6, and alleged bias. The court treated the Andrew Jeffrey authority as distinguishable and found no merit in reliance upon prior bankruptcy proceedings or other peripheral matters as affecting the tribunal's decision.

Background and procedural history:

• The Financial Services Authority made a decision notice on 8 December 2010 imposing a prohibition order under section 56 of the Financial Services and Markets Act 2000 and cancelling permissions under section 45.
• The Upper Tribunal (Tax and Chancery Chamber) heard the matter and on 20 March 2013 issued a decision ([2013] UKUT 140 (TCC)) upholding the FSA's prohibition and cancellation, on findings including that on 1 May 2008 the appellant obtained approximately 10,000 from Whiteway Laidlaw Bank by deliberate fraud, misuse of a nephew's account for client money between 18 November 2008 and 6 January 2009, and acting as an insurance intermediary without permission between November 2009 and February 2010.
• On 11 June 2013 the appellant filed grounds of appeal and sought permission to appeal to the Court of Appeal; the renewed oral application was heard on 22 May 2014.

Nature of the application and issues:

• The appellant sought permission to appeal the Upper Tribunal's findings and procedures. Principal grounds advanced were (i) that key witnesses (Mr Bruce Tyler and Mr Michael Monitz) were not called for cross-examination, (ii) that witness handling and courtroom procedure were unfair, (iii) that the tribunal applied the wrong standard of proof, (iv) that a separate District Judge's dismissal of a bankruptcy petition should have been taken into account, and (v) assorted additional matters raised in late skeleton arguments including alleged breaches of Article 6 ECHR, ultra vires and the Misrepresentation Act 1967.

Court’s reasoning:

• The Court examined the Upper Tribunal's decision and the hearing record and held that the tribunal had a cogent and persuasive evidential foundation for its findings. The court found no error in the application of the standard or burden of proof in a case alleging fraud.
• With respect to witness complaints, the court held there was no general rule preventing witnesses from remaining in court and no demonstrated prejudice arising from the witnesses who were not called; where particular evidence was material the tribunal relied on witnesses who did give evidence and were cross-examined.
• The court distinguished Andrew Jeffrey v Financial Services Authority [2012] EWCA Civ 178 as concerning different circumstances and rejected the proposition that the tribunal should be required to compel either side to call particular witnesses.
• Allegations that the tribunal should have given effect to the dismissal of a bankruptcy petition were held to be irrelevant to the matters the tribunal had to decide. Allegations of bias were unsupported by the facts and a letter referring to post-hearing contacts did not show impropriety.
• Overall, none of the matters raised gave rise to a real prospect of success on appeal.

Permission to appeal was refused and the appellant's renewed application for permission to appeal was dismissed. The Court held that the Upper Tribunal's factual findings were supported by a cogent evidential foundation, that the correct standard of proof had been applied, and that complaints about witness procedure, alleged Article 6 breaches and alleged bias were without merit and did not give rise to a real prospect of success.

Decision of the Financial Services Authority (decision notice dated 8 December 2010) making a prohibition order under section 56 and cancelling permissions under section 45; appeal to the Upper Tribunal (Tax and Chancery Chamber) heard 21 January 2013 and decision released 20 March 2013 ([2013] UKUT 140 (TCC)); renewed oral application for permission to appeal to the Court of Appeal heard 22 May 2014, with permission refused by the Court of Appeal ([2014] EWCA Civ 770).