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Disciplinary Panel Hearings

8 12月 2011

Mr John Gorham - 7 December 2011

Case of
Mr John Gorham, [ 0072683 ], Southampton, SO31

on
Wednesday 7 December 2011

at
RICS, Parliament Square, London, UK

Chairman
Barry Picken        

Members:                                            
Sarah Baalham (Lay)
Peter McCrea FRICS

Legal Assessor                
Ben Kemp

RICS Representative
Vicki Buckley

Charges heard

The formal charge is:

You failed at all times to act with integrity and avoid any actions or situations that were inconsistent with your professional obligations in that you suggested a course of action as a means to discharging your personal debt to Mr J Chalk that would have resulted in that debt being paid by your clients without their knowledge Contrary to Rule 3 of the Rules of Conduct for Members 2007.

 

Determination

Findings of Fact:

The Panel heard evidence and submissions from both Mrs Buckley, on behalf of RICS, and Mr Gorham, who appeared in person and represented himself. The Panel considered all of the circumstances upon the basis of all of the evidence, both oral and documentary.

The following matters were undisputed and are found to be established. Mr Gorham became involved in a contractual dispute with a sub-contractor, Mr J Chalk. Mr Chalk claimed that he was owed monies by Mr Gorham. In the context of the dispute, Mr Gorham issued email correspondence to Mr Chalk on 22 April 2011, in which he made a number of propositions in relation to the claimed debt. The text of that email was produced by Mr Gorham and available to the Panel. The content of the email and the fact that it was issued by Mr Gorham to Mr Chalk were undisputed between the parties.

In the course of the said email, Mr Gorham made a proposal to Mr Chalk in the following terms:

“I am in a position to be able to recommend you to a private client of mine for two commissions.  

         1. Substantial listed Three storey Victorian building and site Trowbridge. In my view probably two days on site and two/ three days drawing up but obviously I am not a land surveyor. I attach a scheme I have drawn up and have had informal approval from the listed buildings officer, planning officer and highways man of the council and my client has instructed me to submit a detailed planning application. Since this will involve listed building consent an accurate drawing of the existing building will be required.  

        2. Seven acres of greenbelt land Hayling Island- need to accurately record existing stables etc on site and adjacent properties plus the location of the designated flood plan risk area on the site.

I am more than willing to accompany you as an assistant holding the staff or whatever on site so that we can agree the exact requirements of both commissions free of charge. This effectively would reduce your costs I would have thought.

I have an arrangement with Vail Williams a well respected local firm of Chartered Surveyors and they sometimes feed me works on the basis that they charge 45% commission- so if I charge £1,000- VW take £450. These type of arrangements are quite common in the building industry particularly recently during the recession in my experience. I have feed VW works on a reciprocal type of arrangement if a client needs a commercial valuation which is obviously outside my expertise and I charge them commission. In my view this is a fairly common business practice.

I therefore invite you to submit a proposed cost for the two schemes above allowing for extra over commission to clear my debt to you payable in the form of a commission direct by my client to you upon completion of the works. So assuming you feel £2,000 is not enough and perhaps a larger figure is required then add it to your quote.” 

The position of RICS was that the plain meaning and implication of this correspondence was a proposal such that a debt owed to Mr Chalk by Mr Gorham would be settled, unknowingly, by a third party client. The debt had nothing whatsoever to do with that client. Mrs Buckley submitted that the arrangement proposed was inappropriate and unethical and would not have served the best interests of the client.

Mr Gorham offered various explanations for the proposal set out in the said email correspondence. He suggested that, fundamentally, the purpose of the email was to ‘tease out’ the level at which Mr Chalk might be prepared to settle the dispute. Mr Gorham emphasised that the arrangement had not proceeded because it had not been taken up by Mr Chalk (a matter of agreement between the parties). When asked directly whether the primary purpose of the proposed arrangement was to settle the debt owed to Mr Chalk, Mr Gorham sought to suggest that any increase in the fee to be charged to the client might have been justified by reference to (1) a referral commission payable to Mr Gorham; and (2) the time and assistance of Mr Gorham in relation to the matter, which he offered to provide to Mr Chalk free of charge.

Mr Gorham additionally argued that the arrangement proposed should not be regarded as breaching Rule 3 of the Rules of Conduct for Members because it had not as a matter of fact been implemented. He did not however seek to suggest that, had the proposal been taken up by Mr Chalk, it would not have been implemented. Mr Gorham accepted that the proposal had not been communicated to the client. When asked directly, Mr Gorham did not seek to suggest that the client would have been informed of the terms of the arrangement, had it proceeded. Mr Gorham submitted further that it would not be appropriate to find him liable for disciplinary action upon the basis of a single email, written he indicated in haste. He stated that he had at the time been experiencing a range of personal difficulties, including financial as well as in relation to his health.

The Panel noted however that, in subsequent email correspondence with RICS, dated 23 June 2011, Mr Gorham had sought to explain his conduct in the following terms:

“In order to settle the debt I offered to recommend him to a friend of mine who I know from Rotary Club who needed a Land Surveyor on a similar basis to Vail Williams- i.e. add to your proposed fee a commission which frankly is fairly common within the industry albeit that clients are often not fully aware.”

In considering the evidence, the Panel proceeded upon the basis that the burden of proof in the case rested with RICS and that, in order to establish its case, the relevant facts required to be established to the civil standard of proof (‘the balance of probabilities’). Having considered carefully all of the evidence, the Panel found the facts as charged to be proved. In particular, the Panel found that Mr Gorham had suggested a course of action as a means to discharging his personal debt to Mr J Chalk that would have resulted in that debt being paid by his clients without their knowledge. This was the plain meaning of the words of the email correspondence in question.

The Panel found Mr Gorham’s various explanations for that email neither compelling nor consistent, as against the clear meaning of the email itself. It was clear, in the Panel’s view, that the primary purpose of the proposed arrangement was to settle a debt owed to Mr Chalk, a debt which had nothing whatsoever to do with the client. It was clear on the evidence that the arrangement had not been communicated to the client. There was equally nothing to suggest that the arrangement would have been communicated to the client, had it proceeded. The clear implication, upon the basis of all of the evidence, was that the client would not have been made aware of the arrangement.      

Panel's Decision

The Panel determined, upon the basis of the facts found to be proved, that Mr Gorham had breached Rule 3 of the Rules of Conduct for Members and was liable to disciplinary action. In so doing, it did not accept Mr Gorham’s submission that the fact that the proposed arrangement had not been implemented meant that there had not in the circumstances been a breach of Rule 3. The Panel found that it was the fact of the proposal which gave rise to the breach. The Panel was concerned in particular that Mr Gorham in proposing the arrangement was not acting in the best interests of a client.

Penalty

In considering whether or not to impose a penalty, the Panel had regard to RICS’ Sanctions Policy and in particular to the principle of proportionality. The Panel considered that it was necessary to impose a penalty in this case. It reached this conclusion having regard to the seriousness of the conduct in question, which demonstrated a fundamental want of integrity. The Panel was of the view that Mr Gorham had continued to demonstrate a lack of insight as to the basis for concern at his conduct.

The Panel considered the range of penalties available, beginning with the least serious. It was not satisfied that a caution or reprimand would be adequate in the circumstances, having regard to the seriousness of the breach and the public protection concern to which it gave rise. The Panel considered equally that the concerns identified in relation to the Member’s integrity and insight would not be addressed adequately by the imposition of undertakings, a fine or conditions. The Panel considered the breach to reflect a serious failing of integrity. Although this had not in the circumstances given rise to any detriment to a client, it was clear in the Panel’s view that it would have done so, had the proposed arrangement been taken up by Mr Chalk. The fact that the arrangement proposed by Mr Gorham did not proceed was not a result of any action by him. The Member had thus demonstrated a clear disregard for the best interests of a client. The Panel noted additionally that Mr Gorham had been prepared to recommend to that client a contractor whose work, upon the basis of Mr Gorham’s evidence he considered was sub-standard, in order to further his own interest in settling his own personal debt.

The Panel had regard to the Member’s submissions as to the personal difficulties which he was experiencing at the time, but remained concerned at his continuing lack of insight, both during the course of RICS’ investigation and during the hearing itself. It considered the Member’s conduct, as established, comprised a gross failure to comply with RICS’ Rules of Conduct for Members and demonstrated a clear lack of integrity. In the circumstances, the Panel considered it necessary and appropriate to impose the penalty of expulsion.   

Determination on Publication and Costs

Publication
The Panel directs publication in accordance with Supplement 3 to the Sanctions policy. The Panel had regard to Mr Gorham’s submission to the effect that publication would not be appropriate or proportionate, but saw no basis to depart from RICS’ publications policy. 

Costs
The Panel orders that Mr Gorham pay the costs of the RICS in this case of £3,811. The Panel had regard in arriving at its determination in relation to costs to Mr Gorham’s submissions in relation to his financial circumstances.

Appeal Period
Mr Gorham has 28 days to appeal this decision in accordance with Rule 59 of the Disciplinary, Registration and Appeal Panel Rules.