A claim was made for the price of goods sold and delivered. The defendant’s solicitor gave an oral undertaking to his counterpart to procure the execution by directors of his client company of charges over their homes in return for an adjournment sine die. The charges were not executed, and the defendant company went into liquidation, and the plaintiff sought to enforce the undertaking.
Held: It was wrong for the judge at first instance not to take into account the fact that it was impossible for the solicitor to perform the undertaking or to consider the possibility of making a compensatory order against him. The case was remitted for further consideration. The jurisdiction to enforce solicitors’ undertakings is essentially compensatory and not punitive, though it does have a disciplinary function as well.
Lord Justice Balcombe set out the principles upon which the courts will order a solicitor to pay compensation for breach of an undertaking. The court’s jurisdiction to order compensation to be paid by solicitors found guilty of misconduct ought not to be exercised unless ‘the conduct of the solicitor is inexcusable and such as to merit reproof.’ Four principles were found: i) the Court acts where there has been professional misconduct ‘ although the jurisdiction is compensatory and not punitive, it retains a disciplinary slant ‘ acting ‘ to enforce honourable conduct on the part of the Court’s own officers.’ (see In re Gray [1892] 2 QB 440)
ii) while the general rule is that the remedy is only available where the conduct of the solicitors is ‘ inexcusable and such as to merit reproof . . a mere mistake or error of judgment is not generally sufficient ‘; this is qualified by the rule that:
iii) failure to implement a solicitor’s undertaking (to which I would equate failure to observe the legal obligations imposed by receiving documents subject to another’s lien) is prima facie misconduct, even though there has been no dishonourable conduct or ‘personal obliquity’. But this in its turn is subject to the proviso that the solicitor ‘may be able to give an explanation for his failure to honour his undertaking which may enable the Court to say that there has been no misconduct in the particular case ‘.
iv) The remedy is discretionary.
Kerr LJ said: ‘Since the purpose of the procedure is disciplinary, being designed to ensure a high standard of conduct on the part of solicitors, an order for enforcement of the undertaking or for compensation for its non-performance will not necessarily follow as a matter of course. Before making such an order the court will have to be satisfied that by failing to perform the undertaking the solicitor has been guilty of professional misconduct or a serious dereliction of professional duty. If it is not satisfied about this then it seems to me that it must still be open to the court to decline to make any order and to hold that the matter must proceed by action, if at all, on the ground that the circumstances do not warrant an order of a disciplinary nature against an officer of the court.’
Judges:
Balcombe LJ, Kerr LJ, Neill LJ
Citations:
[1988] QB 907, [1987] 3 All ER 262, [1987] 3 WLR 465, [1987] ANZ Conv R 466
Jurisdiction:
England and Wales
Citing:
Cited – In re Gray 1901
The tenant of a mine was liable to pay the landlord’s costs of the grant of the lease. The tenant’s liability was based on custom, which required the tenant to pay the costs of drawing, settling and completing the lease. The tenant asked for an . .
Cited – In re a Solicitor 1966
The solicitor had given an undertaking to hold five leases to the order of a bank. They were not in his possession and one was subject to a prior mortgage. Complaint was made to oblige him to comply with his undertaking.
Held: In the absence . .
Applied – John Fox v Bannister, King v Rigbeys CA 1988
An undertaking had been given by the defendant solicitor to retain a sum of pounds 18,000 in his hands or to the credit of his client, a Mr Watts, until various matters had been sorted out. In breach of that undertaking, the solicitor subsequently . .
Cited by:
Cited – Angel Solicitors v Jenkins O’Dowd and Barth ChD 19-Jan-2009
Actions were brought to enforce undertakings given by solicitors to redeem mortgages on the sale of properties, and as to redemption figures provided by lenders who then refused to release the properties. The solicitors had replied to standard form . .
Cited – Thames Valley Housing Association Ltd and Others v Elegant Homes (Guernsey) Ltd and Others ChD 27-Oct-2009
The claimant sought to enforce against the defendant’s solicitors an undertaking given by them. The claimant contracted to buy property subject to a charge in favour of the third defendant bank securing loans over other property. The bank gave no . .
Cited – The Mayor Commonalty and Citizens of London v Samede (St Paul’s Churchyard Camp Representative) and Others CA 22-Feb-2012
The defendants sought to appeal against an order for them to vacate land outside St Paul’s Cathedral in London which they occupied as a protest.
Held: The application for leave to appeal failed. The only possible ground for appeal was on the . .
Cited – L Morgan and Co v Jenkins O’Dowd and Barth ChD 19-Nov-2008
The defendant solicitor applied that enforcement of an order made that he should comply with his undertakings given in the course of a conveyancing transaction for the discharge of mortgages on the sale of properties, should be delayed until the . .
Cited – Coll v Floreat Merchant Banking Ltd and Others QBD 3-Jun-2014
The court was asked whether it was possible to bring contempt proceedings against a solicitor for the breach of an undertaking other than one given to the court. The parties had been employee and employer. On the breakdown of that relationship, the . .
Lists of cited by and citing cases may be incomplete.
Legal Professions
Updated: 05 May 2022; Ref: scu.280047