Professional Conduct Committee Decisions

ARCHITECTS REGISTRATION BOARD

PROFESSIONAL CONDUCT COMMITTEE

IN THE MATTER OF

MR JOHN STEPHEN (045012J)

held on

17 – 19 January 2012

at
Novotel Glasgow Centre
181 Pitt Street
Glasgow
G2 4DT

Present:

Mr Paul Housego (Chair)
Ms Barbara Saunders (PCC Lay Member)
Mr James Cuthbertson (PCC Architect Member)

Mr Stephen Battersby (Clerk to the PCC)

Mr John Stephen attended in person.
Jonathan Goodwin Solicitor Advocate appeared on behalf of the Board.

In this hearing of the Professional Conduct Committee of the Architects Registration Board, the registered person, John Stephen, faces allegations of unacceptable professional conduct (“UPC") and / or serious professional incompetence (“SPI")
There are two separate matters of complaint. Mr Stephen's view prior to the hearing, and repeated at it, was that the matters should be considered entirely separately. The House of Lords case of Mohamed Ali Reza -v- The General Medical Council, Privy Council appeal number 11/1990 clearly sets out that the procedure that has been followed by this committee is the correct procedure. There is one allegation of unacceptable professional conduct, and the Board's Solicitor invites us to decide that any or all of the matters put before us may amount to such conduct. The serious professional incompetence allegation relates only to allegations c(i) and c(ii) below.
We make our findings of fact on the basis of the balance of probabilities, and consider the allegation of dishonesty in accordance with the test in the well known case of Twinsectra -v- Yardley, a copy of the report being with our papers.
The allegations are as follows:–

Part 1–complaint by Mr C Proudfoot
1. he failed and / or delayed in the payment of professional fees due to a third party (Mr C Proudfoot), and in so doing failed to act with integrity and to avoid any actions or situations which were inconsistent with his professional obligations,
2. he failed and / or delayed in complying with the decree dated 18th of June 2010 from the Edinburgh Sheriff Court requiring payment of monies due to a third party (Mr C Proudfoot) and in so doing failed to act with integrity and to avoid any actions or situations which were inconsistent with his professional obligations and which brought himself and / or the profession into disrepute.
3. in the event that the respondent was acting as architect for the complainant:
  1. (i) he failed adequately, or at all, to set out his terms of engagement in writing,
  2. (ii) he failed to carry out its work without undue delay and /or in accordance with costs limits agreed with the client.
4. in the alternative, if the respondent was not acting as architect for the complainant, he wrote a letter dated 5th January 2006 which contains representations which were in accurate misleading and untrue and in so doing failed to act with integrity and to avoid any actions or situations which were inconsistent with his professional obligations. (For the avoidance of doubt, this is an allegation of dishonesty).
These are two separate allegations, and the bundle of documents which we have received, extending to almost 400 pages is divided into 2 separate sections. We heard all the Board's evidence first and then heard evidence from Mr Stephen. In both the presentation of the Board's case, and in Mr Stephen's presentation of his evidence there was a short adjournment between the matters of evidence in respect of the two separate matters of complaint.
In respect of the first matter we heard oral evidence only from Mr Stephen and from Mr Proudfoot. In respect of the second matter we heard evidence from Mr Stephen and also from Mr Smillie, from an inquirer, and from the electrical contractor who worked at the relevant premises.
Mr Stephen had not made a formal witness statement, and asked that he give his evidence in the form of cross-examination first followed by supplementary observations. We agreed. At all times there were lengthy opportunities for Mr Stephen to collect his thoughts, including substantial breaks in the hearing.
The Committee wished to ensure that Mr Stephen, who was unrepresented, was not placed at a disadvantage by the absence of representation. Following his evidence, which concluded before lunch on the second day, the Committee adjourned until 3.30 pm to give Mr Stephen an opportunity to prepare his closing submissions. At 3.30 the Committee then agreed to his request to make his submissions the following morning.
Mr Stephen produced a bundle of photographs at the commencement of the hearing which were also considered.
Before dealing with the allegations we set out some background as to Mr Stephen's practice. Mr Stephen has practised as S A Architecture ltd. He is the sole director of the company, and its only architect. At all relevant times it appears that the company had no employees save Mr Stephen himself, and no one else working on its design and project work save for himself and Mr Proudfoot.
S A Architecture ltd is a limited company with 4 equal shareholders, Mr Stephen and 3 members of his family. (doc 137). Mr Stephen accepts that he controlled the company, and is its only director. Mr Stephen's business affairs encompass roles in several other companies. These appear to be ventures with his two sons. We heard of Arthurseat Ltd, a building contractor, and Caledonian Estates Ltd. There appear to be at least two other such companies not relevant to our hearing.
At the time of the matters the subject of Mr Proudfoot's complaint Mr Stephen's practice had two major contracts, one with EC and another with WLC. The contract with EC ran into some difficulty and some invoices were unpaid. There was a substantial hotel project envisaged at Market Street Edinburgh. Mr Stephen viewed this as the likely salvation of his practice, as it was long term work with an initial fee of £60,000. This was not evidenced save by his oral testimony, but we accept that it was a big project. Unfortunately the property transaction fell through, and with it the architectural commission. By October 2009 the practice had effectively ceased to trade and Mr Stephen describes himself as at present “having a career break".
We deal first with the matter involving Mr Proudfoot.
Mr Proudfoot was known to Mr Stephen before he began working for him. Mr Proudfoot has cad skills that Mr Stephen found most useful. Mr Stephen asked Mr Proudfoot to be a subcontractor, at a rate of £17 per hour, and he agreed. Mr Proudfoot was substantially engaged in work for Mr Stephen's practice, and whether or not this was in fact an employment, both Mr Stephen and Mr Proudfoot regarded it as a third-party engagement of principal and contractor, and Mr Proudfoot rendered monthly invoices to Mr Stephen's practice. On occasion he also rendered accounts to the other family companies mentioned.
There is a list of invoices (document 8) giving the invoice's date and amount and the date it was paid. Until that of 6th January 09 the invoices were paid punctually. That of 14th February 2009 was paid on 13th March 2009,that of 10th March 2009 paid on 28th April 2009. That of 9th March 2009 paid on 17th July (a 2nd invoice of the same date was also paid on the same date). An invoice of 17th May 2009 was paid on 2nd September 2009 (a 2nd invoice the same date was also paid on the same date). No invoices after that were paid - there were 6 of them totalling £12,535.38. Some of the invoices, in particular those where there are two of the same date, are one to the practice and one to a family company.
In our deliberations we noted that there is some inconsistency in the documentation. Document 10, an e-mail of 2nd of July 2009 requests payment of Mr Proudfoot's March invoice of £3,118.63. Document 8 indicates that there was no March invoice of this amount, but that the March invoice that was rendered was settled on 28th April 2009. What is not disputed was that there was a prolonged escalation of debt. The last invoice is dated 8th November 2009, by which time Mr Proudfoot had ceased to work for Mr Stephen's practice.
Mr Proudfoot pointed out to Mr Stephen that the absence of this substantial sum of money was causing his family serious financial difficulty. There was, for example, an e-mail of 13th of November 2009, document 14. There was a meeting on 16th November 2009 referred to in an e-mail exchange of 18th November 2009, documents 17 and 25.
In summary, Mr Stephen attempted to persuade Mr Proudfoot to relinquish his claim for this money in return for an equity stake in architectural ventures, and possibly in a new company. Mr Stephen says that Mr Proudfoot agreed initially and then went back on the matter. Mr Proudfoot denies this. It is irrelevant; Mr Proudfoot's e-mail of 18th November makes it entirely clear he wishes to be paid, and promptly. Mr Stephen knew this. His e-mail (document 25) of 18th October 2009 in reply to that of Mr Proudfoot said “I now better understand your cash flow requirements and desire to get your fees rather than invest them." and “I will get back to you with the proposed payment structure. I am treating this as an urgent matter." These were empty words.
By 11th of December 2009 (document 95 in a lengthy e-mail to Mr Proudfoot) Mr Stephen concluded “I will however vigorously defend the position of the practice if you opt to pursue legal action." (In respect of the outstanding fees.)
Ultimately Mr Proudfoot considered that he had no realistic alternative to court proceedings. He issued proceedings in the Edinburgh Sheriff Court and a decree dated 18th of June 2010 ordered S A Architecture ltd to pay to Mr Proudfoot £12,535.38 with interest at 8% and expenses (costs). (Doc 26)
The judgment debt remains outstanding. Mr Stephen tells us that the company S A Architecture ltd is not trading and has no assets. It has another creditor, HMRC, to the extent of some £5000, though Mr Stephen is hopeful of overturning the demand. Mr Stephen sought to say to us that to pay Mr Proudfoot would be a fraudulent preference of one creditor over another. That of course does not deal with the possibility of Mr Stephen paying Mr Proudfoot personally. Mr Stephen told us that he is solvent, so there would be no possibility preferring one creditor over another if he did so.
In his submissions to the ARB Mr Stephen asserted that the reason the case was lost in the Edinburgh Sheriff Court was because the solicitor he had engaged was on holiday and a substitute attended instead and made a poor job of representation (document 156; e-mail 27th June 2011).
Mr Stephen also asserted in that email that Mr Proudfoot had agreed to move into an equity position, and knew about the financial difficulties resulting from problems with clients. Mr Stephen points out that the judgment debt is against the limited company and not against him personally, but accepted at the hearing that for purposes of professional regulation there is no distinction to be drawn.
In his evidence to us Mr Stephen accepted that while he owed Mr Proudfoot money some £15,000 was paid out in what he called "expenses" from May to October 2009. Whether or not some of that was to Mr Stephen or whether it was all outgoings, it is agreed by him that money was going out of the practice, but none to Mr Proudfoot towards the debt owed to him.
Given that the new code of practice came into force on 1st January 2010 this matter falls within both codes.
Before us Mr Stephen emphasised that he had no intention to conduct his affairs to evade his responsibilities. He did not seek to deny the debt, as he had earlier, and in any event the decision of the Edinburgh Sheriff Court is a judicial decision which we would not revisit. Mr Stephen said that Mr Proudfoot knew all about the financial difficulties with clients, and that the Market Street Edinburgh hotel project was seen as the route out of the difficulties, but that it unfortunately and unexpectedly collapsed after an exchange of missives with a suspensive condition which was activated. Unfortunately he did not put these points to Mr Proudfoot, although preparatory to asking questions he was asked by this
Committee to bear in mind that it would be helpful if he put his case to Mr Proudfoot as well as questioning Mr Proudfoot on what Mr Proudfoot himself had to say.
In his submissions Mr Stephen said that he simply did not have the personal resources to pay Mr Proudfoot. He had no independent financial means so that he could not inject money into the practice to pay Mr Proudfoot. While he did not say so in his submissions, in his evidence to us Mr Stephen said that he was continuing with Mr Proudfoot's work in the hope and realistic expectation that the hotel project at MSE would be the salvation of the practice, and by necessary implication that he was continuing to employ Mr Proudfoot with the prospect of being able to pay for the work he was doing and had done.
Our findings are on matter (a) are that this matter is made out. Mr Stephen failed or delayed in payment of professional fees due to Mr Proudfoot throughout 2009. Early in the period we do not think there was any failure to act with integrity or to act inconsistently with his professional obligations. We accept Mr Stephen's submission in this regard.
However, the position changed in November 2009. In November 2009 Mr Stephen had made some suggestions (principally at a meeting on 16th November 2009) which effectively amounted to Mr Proudfoot waiving his entitlement to over £12,000, which Mr Proudfoot rejected at the latest by 18th November 2009, and Mr Stephen said then that he appreciated Mr Proudfoot's situation and would make proposals as a matter of urgency. On the contrary within a few weeks he wrote the e-mail of December 2009 stating that he would “vigorously defend" a claim by Mr Proudfoot for those fees. Mr Stephen asserted to us in evidence that he was in dispute with Mr Proudfoot about work then being done by Mr Proudfoot for a client of Mr Stephen. Given that Mr Proudfoot was not an employee of Mr Stephen, and given that he was very substantially out of pocket for work that he had done from Mr Stephen, and in the absence of any documentation produced by Mr Stephen to indicate that Mr Proudfoot was at fault, we can see no justifiable reason for Mr Stephen to contest liability to Mr Proudfoot. The Sheriff Court was plainly of the same view having considered all the evidence produced by Mr Stephen at that hearing.
The position is worsened from Mr Stephen's point of view, and here we feel there is also a lack of integrity, is that not only did he defend the proceedings brought by Mr Proudfoot, but when he lost the action in the Edinburgh Sheriff Court he then explained that to the ARB by saying that he lost because he was poorly represented.
Our findings on matter (b) are these: by the time the decree of 18th of June 2010 was made Mr Stephen's practice had ceased to trade and had no income, and no assets. Mr Stephen appears to have had some personal income from rental of properties, but we accept his evidence that this was insufficient to permit payment of the decree. He does have a self invested pension plan and is of an age where he might take the tax-free lump sum. We accept his evidence that its limited assets are not readily saleable. While as a matter of fact he failed to comply with the decree of 18th of June 2010 we do not think that the failure to do so displays a lack of integrity. It is simply a matter of lack of resources. Accordingly we do not find allegation (b) made out.
We deal now with the case involving Mr Smillie. This involves work at 17 Bank Street Midcalder Livingston EH53 0AS. This is a listed building, formerly used for commercial purposes. It was apparently to be acquired by Caledonian Estates Ltd, a Stephen family company. Planning consent was obtained by that company for its division into 17A 17B and 17C. Mr Stephen's practice obtained planning consent for the change of use and the alterations, and the building warrant. 17C was acquired by Mr Stephen's self invested pension plan. It is the loft space above 17A and 17B. Between 17A and 17 B is an access door, left into one and right into the other ground and first floor parts and straight ahead for the top floor. 17A and 17B were intended to be more or less identical. 17A was acquired by Mr Stephen's son R (or his company Grant Estates Ltd documents 197, 199, 216); 17B by his other son J.
Mr Stephen’s son R decided to sell his interest to Mr Smillie, who wanted to live in 17A.
After some discussion back and forth it was agreed that the property would be purchased by Mr Smillie for £150,000 with £40,000 extra being paid for the refurbishment costs. Mr Stephen had already prepared all the architectural drawings for the development.
Prior to the hearing and for half of the hearing, Mr Stephen's evidence and assertions have been consistent - that he was involved in the conversion work, but not as architect for Mr Smillie; he simply made available to his son all the architectural drawings he had undertaken, and both he and his son made those available to Mr Smillie.
The work, Mr Stephen says, was done by Arthurseat Ltd, (a family company) though he accepted that the substantial sums of money paid by Mr Smillie for the work carried out were paid largely to his personal bank account, and those that were not paid to his personal bank account were paid to S A Architecture ltd.
Mr Stephen denied the allegations in their totality when they were put to him at the commencement of the hearing. In cross-examination he made certain admissions and amended his plea so that he accepted that he was the architect of Mr Smillie for certain purposes and failed to set out his terms of engagement in writing, so admitting the allegation set out at c(i).
Work did not proceed to a satisfactory conclusion, as Mr Stephen stopped work expressing concern at whether Mr Smillie had the resources to fund the rest of the work, and so this complaint arose. The property is still uninhabited and uninhabitable, as work has ceased.
There are two particular documents central to this matter. They are a letter of 5th January 2006 to Mr Smillie's then solicitors. It is document 183.
This letter is signed John Stephen RIBA ARIAS for S A Architecture. It is addressed to PC McFarlane, Mr Smillie's then solicitor and it is copied to EB of Lloyds TSB, that bank being Mr Smillie's intended mortgagee.
It is headed "17 a Bank Street Midcalder: Peter Smillie" and commences “We act as architects for Peter Smillie in respect of proposed alteration and refurbishment at the above property."
It then specifically states “We have been asked to write to you in regard to outstanding issues in the context of the purchase of the above and specifically a letter copied to us from Lloyds TSB to yourselves dated 5 January 2006." We have not seen this letter, but it is not disputed that the whole point of Mr Stephen's letter of 5th January 2006 is to deal with some matters raised by the mortgagee which were preventing the issue of a mortgage offer to Mr Smillie. The issuance of a mortgage offer to Mr Smillie would enable Mr Smillie to purchase 17 a Bank Street from Mr Stephen's son R, or Mr Stephen's son R’s company.
It continues “A builder has not yet been appointed. Mr Smillie is purchasing an existing building in a condition which is sound and integral which will benefit from upgrading and refurbishment. We are currently completing his design brief with him and will go to building tender and negotiate a contract with a selected builder in due course. Please note that the seller is not the builder."
The seller was R Stephen or his company Grant Estates Ltd. The work to 17a was to be (and was) done by Arthurseat Limited, or by R Stephen, his company or Mr Stephen personally. None of this is clear, but plainly it was to be done by the circle of people and companies around Mr Stephen. Arthurseat Ltd is partly owned by R Stephen, and by Mr Stephen. The contractual arrangement between the seller (whoever it was) envisaged not only a capital sum for the title, but also a price for the refurbishment. The statement that the there was a design brief was not true, for Mr Stephen had already done all the architectural design work for Caledonian Estates Ltd, another family company. There was no possibility of going to building tender or negotiating a contract with a selected builder, because the work was to be done by someone in the Stephen family. The opening statement “We act as architects for Peter Smillie in respect of the proposed alteration and refurbishment…" was not true. There was no such appointment, as Mr Stephen admits.
Up until the 2nd day of the hearing, Mr Stephen consistently stated that he wrote this letter “as a gesture of goodwill". On 15th June 2011 in an e-mail to ARB (document 273) he stated “The correspondence regarding s a architecture and Mr Smillie's mortgage finance arrangements had been placed out of context. The intention was purely to assist Mr Smillie in his dealings with his mortgage lender as a gesture of goodwill in the context of a mutual joint development to which he was a full and committed party from the outset."
Subsequent to the receipt by Mr Stephen of the Inquirer's report Mr Stephen wrote a lengthy e-mail on 20th June 2011 to the ARB. It is documents 275 -282. It gives every appearance of having been written after detailed consideration of the report.
At 2.03 it says “As a gesture of goodwill in the development context as joint developers it was agreed to assist Mr Smillie with his finance and mortgage approvals." It goes on to say that Mr Smillie preferred not to have typical architectural services but to rely on the paperwork that he received as part of the purchase – Mr Stephen's drawings. It states "Mr Smillie did not write requesting such services at any stage from 2005 to 2011".
There is also the statement in this e-mail "s a architecture was a joint party to the development and had to a degree, a friendship with the Mr Smillie (sic) and was therefore willing to assist on the arrangement of his financial matters." He also says that he did not receive payment for this.
Dealing specifically with the letter of 5th January 2006, at the foot of page 278 Mr Stephen wrote to the ARB in that e-mail “Again this letter was primarily to help Mr Smillie with his financial arrangements as a favour only. He was having technical difficulties with his own lawyer and I agreed to help as a friend and co developer".
There is no possibility that these statements are rushed or accidental. They are a deliberate assertion of a position that there was no architectural retainer between Mr Stephen and Mr Smillie.
The second document is a valuation dated 8th June 2006 (document 190) addressed KC of DM Hall, a valuer's firm, enclosing a schedule of work completed at the property (running to some 3 pages) and stating that he, Mr Stephen, calculated the value of the work as £17,750. It concludes “I trust this will enable you to submit a valuation on behalf of Mr Smillie." The letter was sent on S A Architecture notepaper and was signed by Mr Stephen personally. Beneath his signature is typed “John Stephen RIBA ARIAS for s a architecture". This document does not itself form part of the allegation put to Mr Stephen by the ARB's solicitor. However we consider it a highly significant subsidiary document. Mr Stephen's case is that he was simply helping a friend, charged nothing and by implication made no personal gain. However by enabling Mr Smillie to obtain his mortgage the property was purchased from Mr Stephen's son, and a large part of the mortgage money–approaching £30,000–was paid to Mr Stephen personally. There was real gain to Mr Stephen from submitting the letter of 5th January 2006.
We consider later in this decision whether this substantiates a finding of unacceptable professional conduct, and if so whether we consider it dishonest. Throughout our deliberations we have borne in mind the dual test required by the Twinsectra case (the report of which was contained in our papers); in essence that the conduct must be considered objectively dishonest (the view of the member of the public of normal morality) and also subjectively by Mr Stephen himself.
Mr Stephen said in that letter that he "calculated" the value of work done to the property, set out the work in three pages of detail, the letter was sent to a valuer, to persuade the valuer to report to the mortgagee that money could be advanced to Mr Smillie, and that Mr Smillie would then pay that further advance money to Mr Stephen personally in respect of work carried out at the property.
Mr Stephen said in evidence to us that anything he did at the property was not as an architect, but as a part of the development work on the whole building, and as the two halves of the (lower part) of the building were very similar there were economies of scale in doing both together, that Mr Smillie carried out much work himself, and that in doing what he did he (Mr Stephen) was not acting as architect.
On 30 June 2010 (document 179) Mr Stephen sent a further e-mail to the ARB in which he states “we were not engaged to act as his architect. No engagement terms were proposed discussed or agreed and no fee for architectural services were rendered. On the contrary this project was a development project… between myself and my two sons." He continues “Mr Smillie purchased one unit… in 2006 from my son R… Stephen… it was Mr Smillie's intention… to embark on small-scale property development… in collaboration with my son J… Stephen who had invested in the second unit 17(B) and myself having invested in the 3rd unit 17(C)."
During cross-examination, Mr Stephen became aware of the difficulty in which he had placed himself. Having been asked questions about the effect of the letter copied to the bank he resiled from his previous position and amended his response to the allegation of not providing written terms, admitting it to the extent that for some limited purposes he accepted that he was working in an architectural connection, specifically in relation to the letter of 5th January 2006. There remains for him the problem that assisting in a mortgage application while denying that there is any retainer in connection with the building work on the property being mortgaged is not the usual work of an architect.
Mr Stephen agreed in cross-examination that it was understandable that Mr Smillie might consider Mr Stephen to be acting as an architect, given that he had prepared the drawings, was involved in the realisation of the development and was receiving money from Mr Smiley.
There is no allegation before us that Mr Stephen allowed Mr Smillie to believe that he was acting as Mr Smillie's architect in respect of the work at 17a when he was not.
We were not assisted in our deliberations by the evidence of the electrical contractor. It emerged during the course of his evidence that while he was undoubtedly wholly credible, and he asserted that Mr Stephen was the architect responsible for the work carried out to 17 a, the entirety of the electrical contractor’s work at 17 a was prior to it being purchased by Mr Smillie. Accordingly his evidence did not assist us with Mr Stephen's involvement with 17a after Mr Smillie acquired it.
We had considerable concerns about the Inquirer's report. The Inquirer had visited the property in question with Mr Smillie. The shutters were drawn and accordingly the premises were dark (there is no power and so no artificial light). Mr Stephen requested to be allowed to visit the property with the inquirer in order to put his point of view about the matters that were raised. The ARB's position was, entirely correctly in our view, was that this was a matter for the Inquirer to decide upon; he did not agree. It does not seem to us to be fair for Mr Stephen to have to put his points in correspondence when the complainant, Mr Smillie, had the Inquirer's ear throughout a guided tour of the premises in question. He also relied on a report from Mr Smillie's new architect apparently without giving Mr Stephen the opportunity to respond adequately. There was also the difficulty with the Inquirer's report that it contained an element of circular reasoning. It said that because there were no written terms of engagement Mr Stephen could not be Mr Smillie's architect. If that were the case then no architect would ever be challenged successfully about failure to provide terms and conditions. Accordingly we focused on the other evidence that we were given and in coming to our conclusions gave no weight to the factual evidence of the Inquirer or to his conclusions. We have made our findings of fact on the basis of the other evidence, which in large measure has been uncontested, and made up our own minds as to the findings which we have made.
In his submissions to us Mr Stephen said that he accepted that the letter of 5th January 2006 had a significance greater than he had appreciated at the time. He repeated that his position was that the letter was written in the spirit of trying to help Mr Smillie get to a starting point of the project. He said he would return to the matter later in his submissions, and he did so when he dealt with the allegations one by one. His submission at that point was limited to reference to the text of the allegation, which he denied. He said it was not misleading, inaccurate or untrue. He said that it was not a lack of integrity nor inconsistent with his professional obligations. He repeated that the aim and the spirit of the letter was to assist Mr Smillie and not mislead recipients in any shape or form. He said that it was unfortunate that matters have ended up this way. He said that circumstances explained the situation and the letter should be construed, and we should consider our views, in that light.
Our view on allegations (c) and (d) are these:-
We do not find that Mr Stephen was acting as architect for the complainant in any sense. Accordingly we find allegation (c) not made out and therefore dismiss the charge of serious professional incompetence which relates solely to allegation (c).
The remaining allegation is (d). We have borne in mind that there is no allegation facing Mr Stephen concerning the distinct possibility that Mr Smillie may well have considered that Mr Stephen was involved in the project of 17 A Bank Street in his professional capacity as an architect, and we have therefore dismissed that from our minds.
The text of the letter of 5 January 2006 bears little relationship to the facts of the matter. Mr Stephen did not act as architect for Mr Smillie in respect of the proposed alteration and refurbishment at the above property. He has denied this throughout, and he maintained this at the hearing.
We consider it significant that he stated in the letter that he wrote it because he had been “asked to write to you in regard to outstanding issues in the context of the purchase of the above and specifically the letter copied to us from Lloyds TSB of 5th January 2006". In short, he wrote the letter in order to remove a difficulty standing in the way of the mortgage offer being pursued by Mr Smillie.
The letter then stated that a builder had not yet been appointed. The terms under which it was proposed that Mr Smillie would buy the property from Mr Stephen's son was that the building work on the three parts of 17 Bank Street would all be done by the same contractor, which would be (in some form or other) Mr Stephen, one of his relatives, or a company in which he and his relatives were involved. It was misleading to say that a builder had not yet been appointed.
There was then the statement that the building is existing and is “sound and integral which will benefit from upgrading or refurbishment": that statement would add nothing to what a valuation report said.
The letter continued “we are currently completing his design brief with him". That was simply untrue. Mr Stephen had already completed the design for the refurbishment of the whole building (or at least for 17A) for one of his family companies, Caledonian Estates Ltd. He provided that documentation to Mr Smillie either directly or through his son. It was simply untrue to say that he was working on anything to do with the design brief for 17A, and he has repeated stated to the ARB that he did not do so. He maintained that stance before us - he was a developer, he said, in connection with all work at 17 Bank Street.
The letter continues that they “will go to building tender and negotiate a contract with a selected builder in due course". There was no intention to go to building tender, other than perhaps there was to be negotiations as to price with Mr Smillie for the refurbishment work to be carried out by Mr Stephen or his family.
Then there is the statement “please note that the seller is not the builder". Mr Stephen considered it necessary to put in this assurance to the solicitor for Mr Smillie and Mr Smillie's mortgagee. While it may technically be true, because the seller was Grant Estates Limited, it appears, nevertheless it is highly misleading, because the builder was to be Mr Stephen or someone in his family.
Finally there is an observation that planning consent and listed building consent was in place, which was true.
Mr Stephen now asserts that he was involved in a professional capacity to assist with the mortgage application. If so, there was no reason why he could not have written a letter to say that he and his sons were now the owners of the whole building, in 3 sections, that he had designed refurbishment works for the whole building, for personal reasons his son had decided to sell 17 A, that Mr Smillie had agreed to buy it, that refurbishment works for all 3 properties would take place as one project, and that he would be involved in order to ensure that all the work was done to an appropriate standard, and done in concert, and that it was intended that they would carry out the work personally and that Mr Smillie would pay him or his family to do that work.
We are unimpressed by Mr Stephen's change of plea midway through the hearing. It is apparent to us that part way through the cross-examination Mr Stephen began to appreciate that the defence that he was putting forward to allegation (c) was in danger of becoming an admission to the allegation (d). He sought, in our view, to limit the damage by agreeing that he was acting as an architect, but limited to assisting with the mortgage finance, but failed to set out those terms of engagement. That would mean a finding against him on (c)(i) but enable him to argue against allegation (d).
Mr Stephen was at the centre of all matters to do with 17 Bank Street. By writing the letter he enabled his son to sell the property to Mr Smillie, and that facilitated, or resulted in, Mr Stephen or his family receiving some £30,000 from Mr Smillie in connection with refurbishment works, which would otherwise have had to be funded by his son, by him, or not done at all.
Mr Stephen asserted in evidence that he received no financial gain for assisting Mr Smillie. On the contrary, there was considerable financial gain by enabling Mr Smillie to purchase 17 A for £150,000 and to spend on it £30,000 with Mr Stephen.
Accordingly we find that in writing the letter of 5th January 2006 he wrote a letter which contained representations which were inaccurate misleading and untrue, and in so doing failed to act with integrity.
We then consider whether this is dishonest, or not, within the meaning of the Twinsectra test.
We consider that anyone reading that letter, and knowing of the basic factual situation concerning the ownership of 17 Bank Street would consider that letter dishonest.
We then spent a very considerable amount of time considering and debating whether the subjective element of the Twinsectra test was met. Mr Stephen says that he was motivated solely by a wish to assist Mr Smillie, who by the time he wrote the letter had become a friend. We do not know what that personal relationship was, as Mr Stephen led no evidence about it. If he was writing it from friendship that does not mean it is honest. Here there was personal gain to Mr Stephen or his family whether or not there was also friendship.
It seems to us inherently unlikely that a professional man would write a letter which he knew to be misleading and inaccurate and untrue (as Mr Stephen must have done) when he could have written a letter which was true, without appreciating that he was not acting honestly.
Mr Stephen is, plainly, an intelligent man, and he is articulate. He has been in practice some 35 years and has considerable experience. He has set up his architectural practice as a limited company, and he has been involved with at least two other limited companies, and we have heard of two more, so four limited companies in total where he has an involvement. He is not an unsophisticated man, but an experienced man of business as well as a professional man.
We have borne in mind that the result of the letter was the mortgage offer to Mr Smillie, enabling him to buy Mr Stephen's sons property, and to enable Mr Smillie to pay for refurbishment work at 17 A, those refurbishment costs involving a substantial sum of money being paid to Mr Stephen.
We bear in mind also that the test is the balance of probabilities.
When we consider all these things, we conclude that this was a dishonest letter. Accordingly we find allegation (d) proved as set out in the board solicitor's report.
We have listened to what Mr Stephen said in mitigation. His is an unblemished record of some 35 years. However with our finding on allegation d, while, as required, we have considered whether each successive step of sanction would be appropriate, the sanction of erasure is that which we must impose and we do.
Having spent some 3 days considering the matter, and bearing in mind all that we have heard in that time, we make a recommendation that the minimum time before which Mr Stephen may apply for restoration to the register is 2 years.

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