Solicitor who breached undertakings agrees to leave profession

---

Developments: Investors lost out

A solicitor whose failure to comply with multiple undertaking he gave caused significant losses for investors in two property developments, has agreed to leave the profession.

Trevor Munn gave the Solicitors Regulation Authority (SRA) an undertaking to remove himself from the roll and not to apply for readmission for two years.

Further, he undertook not to be in any way involved in a law firm the SRA regulates, at least without its permission.

As a result of the regulatory settlement agreement published yesterday by the SRA, Mr Munn will not be referred to a disciplinary tribunal.

The agreement explained that Mr Munn was a sole practitioner who acted for a property developer, who in turn relied on unsecured loans from private investors, secured by the client’s personal guarantees, to fund the developments.

He was instructed on property development A in 2012, for which six investors loaned his client nearly £1.2m.

The solicitor’s undertaking to each covered repaying the loans, plus 15% interest per annum, after the development’s sale, providing he had sufficient funds available.

In the event there were insufficient funds, the undertakings said his client would be liable to repay the monies under the personal guarantees.

More than three years later, the client dis-instructed Mr Munn and the SRA said there was “no available independent evidence” to suggest he notified the new firm of the undertakings.

Eventually, none of the six private investors were repaid any of their loans from the proceeds of sale.

Further, the SRA said, Mr Munn could not comply another undertaking he gave. One of the investors paid £200,000 into his firm’s client account in two instalment and, after the second, he undertook to use of all of it towards the development’s deposit.

However, he had already used part of the money to pay a third party connected to the development.

Mr Munn told the SRA that he believed that he was in compliance with the undertaking at the time.

The solicitor started working on development B in 2013 and five investors provided £1.9m. He again gave undertakings to them over the distribution of the proceeds of sale.

After being dis-instructed in 2015, he only made the new solicitors aware of one of them, which was complied with following completion and led to one investor being repaid.

However, as a result of not informing them about the others, four investors were not repaid, even though there were sufficient funds available to discharge some of them.

Mr Munn admitted his misconduct, but said in mitigation that, at the time he gave the undertakings, he believed he would be able to discharge them. His “recollection” was that he did inform the new firm about them.

He added that the SRA had not received any other reports or complaints about him since these events. Further, he has now retired and so the risk of repetition was low.

The SRA said removal from the roll was the appropriate outcome because Mr Munn “disregarded the risk of harm and his regulatory obligations”.

This misconduct had an impact on the standing of the profession: “Being able to place reliance on solicitor’s undertaking is a fundamental tenet of the legal profession and he has failed to uphold this expectation.”

The SRA said that, normally, Mr Munn would have been referred to the Solicitors Disciplinary Tribunal. But in light of the mitigation and undertakings to leave the profession, this was not “necessary, proportionate or in the public interest”.

It added: “Mr Munn’s voluntary removal from the roll reflects the gravity and seriousness of the conduct without the requirement for further sanctions.”