UT (Tax & Chancery) UT-2022-0000150 - [2024] UKUT 00254 (TCC)

We have therefore found as follows:

Mr Stanley’s position was those findings were sufficient for us to dismiss the Reference, because it was clearly reasonable for the Authority to have decided it was not satisfied Mr Kalaris was fit and proper.

Saranac’s position was that the Tribunal had to decide whether the Decision was one which was reasonably open to the Authority on the basis of all relevant findings of fact and not simply those which related to the Interviews. Mr Winter emphasised that the Authority had decided that Mr Kalaris was not “fit and proper now”, and had come to that Decision based on events which happened around a decade ago. In his submission, those events were “plainly incapable of robbing him of [his] integrity in 2024”.

In Köksal, the Tribunal considered a similar submission, and took s 55Z3(1) as their starting point. That section provides that “an applicant who is aggrieved by the determination of an application made under this Part may refer the matter to the Tribunal”.

The Tribunal said at [31]:

“In our view it is clear that in this context ‘the matter’ in question is whether the Authority can be satisfied that if the Variation Application were approved Dr Köksal would satisfy the Threshold Conditions [for authorisation]. Consequently, the extent of what the Tribunal may examine in considering the matter referred will be prescribed by the issues raised in the pleadings and the evidence sought to be adduced to support the competing contentions made by the parties in those pleadings.”

In Saranac’s Reference, “the matter” is the Decision that the Authority cannot be satisfied Mr Kalaris is fit and proper so as to perform the Chief Executive and Executive Director functions. The Decision was made on 17 November 2022, but the Authority did not change its position between that date and this hearing.

The Tribunal in Köksal continued:

“[33] In our view there is nothing in principle that would prevent us taking into account the further information provided by Dr Köksal since the giving of the Decision Notice in coming to a decision as to whether or not to remit the matter back to the Authority in the light of the findings that we make in relation to that evidence. In our view to take this course is entirely consistent with the wording of both s 55Z3 (1) and s 133 20 (4) FSMA. It is also consistent with the approach taken by this Tribunal in the case of Stephen Robert Allen v The Financial Services Authority (2013) FS/2012/0019 where
the Authority sought to substitute new and distinct allegations which it contended established that Mr Allen was not a fit and proper person from those originally contained in its decision notice. The Tribunal said this at [19] of its decision:

“The allegation in the Decision Notice was that Mr Allen is not a fit and proper person to perform any function in relation to regulated activities generally because he lacks honesty and integrity. Any evidence that relates to Mr Allen’s honesty and integrity, whether or not it was available to the Authority at the time of the Decision Notice, may be considered by the Upper Tribunal.”

[34] Although this decision pre-dates the coming into force of s 133 (6) and (6A) FSMA, we see nothing in the new provisions which would affect it.

[35] We are therefore of the view that if we were to make findings of fact in relation to the new evidence provided by Dr Köksal which indicated that the original findings made on which the decision was based had been overtaken by further developments, such as new evidence which clearly demonstrated that in substance the further information requested by the Authority in relation to the Application had in fact now been provided, then that finding could lead the Tribunal to conclude that the matter should be remitted to the Authority for further consideration in the light of those findings. This would ensure that the Authority reconsidered its decision on a fully informed basis.”

We respectfully agree, and find that in determining the Reference, we may examine “any evidence that relates to [Mr Kalaris’s] honesty and integrity, whether or not it was available to the Authority at the time of the Decision Notice”.