Manifestly incompetent solicitor fined for role in “secret sale”

SDT: Pattern of systematically inadequate practice

A solicitor who facilitated a “secret, snap sale of inheritance property” after which the seller absconded to Morocco has been fined £15,000.

The Solicitors Disciplinary Tribunal (SDT) said the facts of the case were “so stark” that, in failing to take note of the warning signs, Sonia Hunjan was “manifestly incompetent”.

Approving an agreed outcome between Ms Hunjan and the Solicitors Regulation Authority (SRA), the SDT heard that the solicitor, admitted in 2001, joined Rana & Co in 2014.

Ms Hunjan admitted that in 2016 she “facilitated a transaction which bore the hallmarks of illegitimate attempts to circumvent third-party interests of the property”, without undertaking adequate enquiries.

The SRA said Client B had been in a relationship with a Miss D and together had owned a property.

After their joint tenancy was severed in 2011, making them tenants in common, Miss D sought to put an unusual restriction on the property, so no sale of the property could be registered after the death of one of them without written consent from their personal representatives.

Although the restriction was not registered, Ms Hunjan was aware of it. Another restriction, which was registered, stated that no sale of the property could registered without a court order, unless it was by a trust corporation.

Miss D died in 2013. Client B instructed Rana & Co in 2016 to sell the property and remove the restriction. The estate agents were given three weeks to find a buyer and not advertise it anywhere.

The property was sold for £445,000, between £105,000 and £135,000 less than the valuation.

The residual proceeds of £407,000 were transferred to Client B. None of it went to his joint trustee in a trust corporation that had been set up, who had been chosen by Client B.

Ms Hunhan did not advise the trustee about their responsibilities or to take independent legal advice on the appointment.

The SRA said there was no evidence that the other trustee had authorised the solicitor to pay the whole of the proceeds to Client B.

“The single trustee was paid only on the strength of the evidence of the death of the joint owner and sight of an unproved [2002] will, which Client B said meant he was entitled to the whole of the proceeds of sale in any event.

“This, coupled with the apparent lack of any advice given to Person E about his responsibilities as trustee, suggests that she regarded the appointment as a device to side-step the bureaucracy of the Land Registry rather than as a substantive responsibility intended to protect the interests of beneficiaries.”

Soon after, it emerged that Miss D had made a new will revoking the 2002 version and leaving her estate to her son. Client B was challenging this at the time he instructed Ms Hunjan to sell the property.

The SRA said it appeared that, following the sale, “Client B absconded to Morocco with the proceeds of sale”, and disengaged from the court proceedings. The later will was eventually upheld, meaning 50% of the proceeds were meant to go to Miss D’s estate.

The SRA said: “The warning signs were clear, obvious, several, and extended over a period of several months.

“Client B was seeking a secret, snap, sale of inheritance property, at a heavy discount, in circumstances where there was a restriction on the title, there were other family members, there was a history of falling out between Client B and the co-owner, and Client B was not returning to previously instructed solicitors who were the executors of the estate.”

The SRA went on: “Instead of scepticism, the respondent went so far as to seek to assist the sale by finding a buyer. She was pliable and was easily persuaded by Client B to side-step the restriction.

“Only a manifestly incompetent solicitor could have missed these warning signs, failed to take obvious lines of enquiry, and facilitated such a scheme.”

Ms Hunjan admitted facilitating the sale of another property when she was on notice that the owner “might lack the relevant mental capacity to make decisions about the sale” but did not then make adequate enquiries.

The SRA said the client was “subsequently described as being upset and confused” about the fact that her property had been sold.

In a third transaction, the solicitor admitted acting for both borrower and lender on a loan secured against a property in a way that gave rise to a conflict of interest or risk of one.

The SRA said the public “would be alarmed by a solicitor who acted for a client in desperate need of cash, and at the same time for a lender/purchaser offering to provide short-term finance to the borrower on punitive terms”.

The SRA withdrew an allegation that Ms Hunjan had acted with a lack of integrity and another that she had acted recklessly.

The tribunal said: “Whilst the misconduct was not calculated or deliberate and there was no financial gain for the respondent other than the ordinary fees that she would have earned on each of these transactions, they collectively demonstrated a pattern of systematically inadequate practice.”

A solicitor with Ms Hunjan’s level of specialist experience “ought to have known better, albeit the misconduct resulted in part from wrongdoing by her clients”.

Ms Hunjan was fined £15,000 and ordered to pay £23,650 in costs. Conditions were imposed on her practising certificate preventing her from acting as a law firm manager or compliance officer and requiring her to obtain SRA approval for a role as employee.

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