19 JAN 2011
Mr Rupert Swarbrick , Lancashire, PR3
Barry Picken (Lay)
Rob Swan (FRICS)
The formal charge is:
That you failed to ensure that your personal and professional finances were managed appropriately in that on 12 March 2009 you were made bankrupt following a creditor’s petition in respect of a debt of £24,541 – at the date of the bankruptcy order you had assets of £3,125,000 and liabilities of £5,486,456 leaving an estimated deficiency of £2,361,456 Contrary to Rule 7 of the Rules of Conduct for Members 2007.
Proceeding in absence
At the outset of the hearing the Panel determined to proceed in the absence of Mr Swarbrick in accordance with Rule 30. The Panel in particular noted that Mr Swarbrick had returned the Listing Questionnaire and sent an email dated 18 January 2011 in which he made clear that he would not be attending today’s hearing and would not be sending representation. In the circumstances the Panel were satisfied that Mr Swarbrick had received notice of the hearing and that his absence was voluntary.
Findings of Fact
In the Listing Questionnaire Mr Swarbrick indicated that he admitted the charge. The Panel accepted his admission and announced that it found the facts proved.
The Panel accepted the advice of its Legal Adviser that, in light of Mr Swarbrick’s submissions, it should consider whether the breach of Rule 7 of the Rules of Conduct for Members did in fact give rise to a liability to disciplinary action.
The Panel judged that the breach of Rule 7 in this case did give rise to a liability for disciplinary action. The circumstances which led to Mr Swarbrick’s bankruptcy arose as a result of property investments which ultimately he was unable to fund. The Panel considers that Membership of RICS might have conferred a degree of trust amongst the professionals and lenders who would have been involved in the property transactions. Whilst the loans to Mr Swarbrick were personal, and he claims not to have been practising for clients for a number of years, his business was in property. Mr Swarbrick was a highly visible man in his community and the Panel believes the public and professionals with whom he was dealing would have known of his RICS membership.
The fact and scale of the bankruptcy of Mr Swarbrick as an RICS member reflect on the standing and status of RICS.
The Panel went on to consider what might be an appropriate penalty and had regard to the RICS Sanctions Policy. The Panel determined that a sanction was necessary but that neither a caution nor a reprimand would adequately reflect the gravity of this matter. The loss to creditors was in excess of £2,000,000, and the Panel received no evidence to suggest that he took any steps to minimise these losses. Mr Swarbrick has admitted in evidence to the Receiver that he was, at the time, living beyond his means.
The Panel agreed that a fine would not be a suitable sanction given Mr Swarbrick’s financial circumstances, nor would it sufficiently reflect the seriousness of the breach.
The Panel understands that the key reason for the bankruptcy is that Mr Swarbrick became unable to pay service charges on a number of properties which he had bought in 2006 with a significant bank loan. Whilst the Panel recognises that market changes were beyond Mr Swarbrick’s control it considers that the investments amounted to rash and hazardous speculation and this factor aggravates the view it has taken of this case.
To Mr Swarbrick’s credit he brought the fact of his bankruptcy to the attention of RICS and has cooperated with its investigation.
Mr Swarbrick has also made it clear that at the present time he is not practising. In his letter dated 26 April 2010 he stated that he would not “contest any kind of censorship by RICS”.
Given the very serious breach of the Rule, which requires Members to manage personal and professional finances appropriately, the Panel considers that the only proportionate sanction in this case is that Mr Swarbrick should be expelled from membership of RICS. This order is to take immediate effect.
Determination on Publication and Costs
The Panel directs publication in accordance with Supplement 3 to the Sanctions policy
The Panel orders that Mr Swarbrick pay the costs of the RICS in this case which the Panel has recalculated as £3,239. The Panel has made allowance for a shorter hearing time and reduced the solicitor’s costs accordingly. The Panel notes from Mr Swarbrick’s email 18 January 2011 that at present he is not working and that he requests a deferment of payment or at least payment by monthly instalments. The Panel urges RICS to consider either of these options.
Mr Swarbrick has 28 days to appeal this decision in accordance with Rule 59 of the Disciplinary, Registration and Appeal Panel Rules.