A solicitors firm has self-reported to the Solicitors Regulation Authority over 'serious allegations' made against one of its senior partners during a High Court battle.

The partner is accused of misleading a businessman - the defendant in the court case - into thinking he was a client to gather evidence which would subsequently be used against him.

Sajead Ghaffar, the defendant, was entrusted with over £4m by the claimant, his cousin Saeed Akbar, for investments, including in property, shares and gold dealing.

According to a judgment seen by the Gazette, Ghaffar was said to have 'dishonestly misled' Akbar in relation to investments and 'dishonestly appropriated' his money.

One disputed payment was the sum of £1.83m given to Ghaffar for investment with Richmond Point Capital (RPC). Akbar said Ghaffar did not return the money or 'offer any credible explanation as to what became of it'.

He asked Ghaffar to attend a meeting in January last year at the offices of his solicitors - Manchester-based Pannone Corporate LLP - with senior partner Paul Daniel Jonson and a Pannone paralegal. At the meeting, Ghaffar said he had not been able to obtain an update from RPC about the funds, despite numerous messages, the court heard. 

Jonson said both Akbar and Ghaffar wanted Pannone to send a letter to RPC to try and establish what had happened to the money. 

After the meeting, Jonson drafted a letter in February last year which referred to both Akbar and Ghaffar as Pannone’s clients, and referred to acting on behalf of both of them, the court heard. 

RPC replied that it had no knowledge of Akbar; it had received £1m from Ghaffar and had paid it away on his instructions. It had not received the further £833,000 and a purported joint venture agreement - which Akbar said Ghaffar had provided to him -  'was a forgery', the reply continued. 

Akbar said it appeared 'tolerably clear' to him Ghaffar had defrauded him and applied for a freezing order.

Ghaffar applied to discharge the order on the basis that key evidence in support of the application had been procured by a fraud in which Pannone itself 'knowingly participated'. 

Francis Hornyold-Strickland, for Ghaffar, submitted that Pannone 'intimated by words or conduct that Mr Ghaffar was their client' and did so 'in order to persuade Mr Ghaffar to lend his name to a letter to [Richmond Point Capital] to make it more likely that [it] would provide information which it could subsequently use against Mr Ghaffar'. 

It was alleged Pannone 'had put itself squarely in breach' of SRA Code of Conduct Rules 1.2 and 1.4, which provide solicitors should not take unfair advantage of clients or others, and should not mislead or attempt to mislead clients, the court or others.

Hornyold-Strickland argued: 'The fact that Pannone deemed it necessary to report themselves to the SRA is itself probative evidence that the matter is material.' 

In a witness statement, Jonson - a specialist commercial litigation solicitor since 1994 who has an unblemished professional record - said there was no intent to procure evidence implicating Ghaffar.

It had appeared to Jonson that both Akbar and Ghaffar may have been victims of a fraud perpetrated at the hands of Richmond Point Capital, the court heard.

Jonson said: '… in writing to RPC there was no deliberate wrongdoing or fraudulent behaviour on my part, and it simply did not occur to me that there was any need to say anything more to the court about the correspondence with RPC when the claimant applied for the freezing order.'

He accepted he could have been 'more careful in how I worded the letter to RPC' and acknowledged the letter 'could more accurately have said that the claimant was our client and that the first defendant had engaged with RPC on his behalf'.

Judge Mark Cawson KC dismissed the defendants’ discharge application, saying he saw 'no good reason for not accepting Mr Jonson’s evidence'.

'I do not accept that it has been shown that Mr Jonson set out to mislead either RPC or Mr Ghaffar', the judge said. 

'There was, as I see it, at worst some confusion or lack of thought on Mr Jonson’s behalf as to Mr Ghaffar’s status as a client or otherwise, but I do not consider that there is any cogent evidence that he knowingly or recklessly said anything to RPC, or indeed to Mr Ghaffar, that he knew or understood to be false.

'I do not consider that anything of significance turns on the fact that Pannone have self-reported themselves to the SRA. In the light of the serious allegations made against Mr Jonson, it is unsurprising that they should do so even if they do strenuously deny the allegations.'

The judge added he was 'not satisfied' that Jonson knew, or ought to have known he had acted in breach of SRA Code of Conduct rules.