UT-2023-000032 - [2024] UKUT 00265 (TCC)

Client 1 – Mr. Ashraf says that he questioned the client during the meeting to ensure the client was in the UK. He could see that it was daylight outside, leading him to assume that the client was in the UK rather than the UAE. Given the time in the UK, it would have been dark in the UAE. In cross-examination, Mr Jones suggested to Mr Ashraf that, given the time of year (April – when days are lengthening and there is a 3-hour time difference with the UAE) that was a rather weak basis for proceeding. The Suitability Letter states that the client was in the UK at time of meeting and this was signed by the client. The AST’s query about the credit card transaction was addressed and no evidence had been produced to suggest why the transaction might be problematic. Mr Ashraf disputed Mr Hancock’s note (in MH1) that the case had not been submitted for second line checks and exhibited a Tenet Watch List Reporting Form which showed the transaction being referred.

Client 2 - The lender and the conveyancer both had their own stringent tests on the source of funds from the client and were satisfied with the source of funds for the deposit. The mortgage was approved and completed in June 2021. Mr. Ashraf exhibited the Supporting Notes document, which was sent to the lender a day after submission of the application and prior to approval. This outlines the situation with the deposit and also had 2 signed gifted deposit letters attached. The document explains that the deposit was funded in part by family members repaying loans (which were not formally arranged and had no specified repayment or interest terms) the clients had made to them. The “gifted deposit” letters were signed to confirm that the person repaying the money would have no claim on the property. Mr Ashraf disputes the suggestion in MH1 that the “gifted letters” were removed from the system. He says that, as an adviser, he cannot do this. He did not say that he got the gifted letters to satisfy Tenet’s requirements; in lay terms (as he put it) these transactions could be seen as gifts and, as he said in his Appeal Letter, the deposit came from a mixture of funds gifted and savings. In his Appeal Letter he attached bank statements to show the source of funds for the deposit.

Client 3 - Both clients’ visas were held on the file and were submitted to the lenders (Barclays and Clydesdale). If a client is not a British Passport holder, there is a requirement as part of the mortgage application to send proof of identification as well as the client's visa. In the Barclays application it was incorrectly recorded that the clients were UK permanent residents. However, an email from Barclays confirmed that they received the Visa prior to approval and there is also a record of visa information being sent to Clydesdale. Mr Ashraf says that the note that suspicions remained (the penultimate bullet) is an assertion by Mr Hancock. The documents show that the lenders had copies of the visas.

Client 4 - There were notes at the end of the application confirming the client residency status. Mr Ashraf says that the fact find shows that the clients were resident in the UK, not France (as stated on MH1). This was already on the client's file and submitted as part of the application. Mr. Ashraf exhibited the HSBC Application Summary which recorded that both clients held Indefinite Leave to Remain status in the UK. The lender was fully informed about the clients’ residence history. Mr Ashraf explained that the standard HSBC lending criteria requires a client to have been UK resident for at least 12 months. There is an exception for HSBC Premier clients, but the HSBC system does not accommodate this. Mr Ashraf had been told by a HSBC executive to complete the form on the basis that the clients had been UK resident for 12 months and then explain the position in the notes at the end of the form. Mr Ashraf (in his Appeal Letter) said that mortgage lenders’ usual classification for a first-time buyer is someone who has not owned a UK property in the last 6 months. The clients met that test as they owned a French buy to let property and did not own any UK property. In any event notes submitted as part of the HSBC application explained this. Mr Hancock had pulled this up in the meeting and was satisfied. Both the lender and the conveyancer were satisfied, and the mortgage went ahead. Nevertheless, Mr Jones suggested to Mr Ashraf that “first-time buyer” is not a difficult concept and put to Mr Ashraf that, at best, he guessed what it meant. Mr Ashraf said that this was his understanding, although he agreed that he had not taken any steps to confirm his understanding.