6. Undertakings in the course of legal practice

1. A solicitor who has given an undertaking in the course of legal practice must honour that undertaking and ensure the timely and effective performance of the undertaking, unless released by the recipient or by a court of competent jurisdiction.
2. A solicitor must not seek from another solicitor, or that solicitor’s employee, associate, or agent, undertakings in respect of a matter, that would require the co-operation of a third party who is not party to the undertaking.

Commentary

An undertaking (whether oral or written) is a promise to do or refrain from doing something. A solicitor may provide an undertaking:

• to the court, another lawyer, a client or a third party; and
• on their own or on a client’s behalf.

6.1 Honouring an undertaking

The professional obligation in Rule 6.1 to honour an undertaking is reflective of the common law: National Westminster Finance New Zealand Ltd v Bryant [1989] 1 NZLR 513, 518-19.¹⁶ A prudent solicitor should ensure that they:

• give or confirm their undertakings in writing, expressed in clear, precise and unambiguous terms (this applies to both provision of a personal undertaking and an undertaking on behalf of a client);
• give their undertaking in accordance with their client’s instructions; and
• have complete control over their ability to fulfil the undertaking (otherwise it must be subject to conditions).

A solicitor may be held to an undertaking even if the solicitor has erred or made an oversight or circumstances have changed radically or may cause hardship to the solicitor.¹⁷ 

Personal obligation. There is an important distinction to be drawn between undertakings given by a solicitor personally and undertakings given on behalf of the client. Where an undertaking is given by a solicitor personally, it will bind that solicitor. An undertaking may be given on behalf of a client. Whether or not the undertaking binds the solicitor is a question of fact and interpretation to be determined in light of the surrounding circumstances. 

Thus in Gorman v Norton (1887) 8 LR 479, where a writ had been issued for the arrest of the client who was expected to leave NSW the following day and not to return, an undertaking was given by his solicitors "on behalf of the defendant to pay any sum that may be awarded" in civil proceedings. Where parties sign an agreement in their own names they are liable upon that agreement, unless it appears on the face of the document that they are only contracting as agents. In this case, the future absence of the defendant would deprive the plaintiff of any practical benefit of an undertaking binding only the defendant and so the undertaking was interpreted as having been given by the solicitors on their own account.

Thus, it may be insufficient to avoid personal liability, to give an undertaking in the terms "I undertake on behalf of my client”. It is preferable to say “I am instructed that my client undertakes…¹⁸

In Auckland Standards Committee 3 of New Zealand Law Society v W [2011]NZLR 117, the following principles of interpretation were said to apply to undertakings:

• being documents of a commercial nature and intended to facilitate the completion of commercial dealings, they should if possible be given commercial significance
• undertakings given by solicitors should be construed having regard to their substance and intention, not in a technical or legalistic fashion

where an undertaking is ambiguous, it will generally be construed in favour of the recipient.

An undertaking given by a solicitor's employee is an undertaking by the solicitor, whether or not the employee who gave the undertaking secured proper authority from the solicitor: Hawkins v Gaden (1925) 37 CLR 183.¹⁹ Principal solicitors should therefore consider clear mandates for employees to give undertakings. Similarly, a partner who gives an undertaking binds the firm’s other partners, and the partners are jointly and severally liable for its breach: Hirst v Etherington [1999] Lloyd’s Rep PN 938; Burbery Mortgage Finance & Savings Ltd (in receivership) v O’Neill [1995] ANZ ConvR 387.

Breach of an undertaking

Failing to honour an undertaking may have three consequences; 

• contempt of court proceedings;
• disciplinary proceedings; and
• breach of contract.

For commentary on the general consequences of breaching these Rules, see Rule 2.

Breach of undertaking – contempt of court. Where an undertaking is given to the court, the court has inherent supervisory and summary jurisdiction over solicitors to enforce undertakings: Udall v Capri Lighting Ltd [1988] QB 907. The jurisdiction is aimed at getting the undertaking honoured, not penalising the solicitor.

Breach of undertaking – professional discipline. Breach of undertakings have been characterised as professional misconduct or unsatisfactory professional conduct depending on the circumstances and seriousness of the breach. The case law reveals that disciplinary bodies have had regard to the following factors:

1. Whether the undertaking was given in the course of practice: Legal Services Commissioner v Zaghini [2005] LPT 4, or in a personal matter: Legal Services Commissioner v Gregory [2009] LPT6, [14] – [18].
2. Whether the breach is characterised as unintentional: Legal Services Commissioner v McColm [2006] LPT 14; "reckless or foolish": Legal Services Commissioner v Tunn [2004] QCA 412, [9] or deliberate: Legal Services Commissioner v Zaghini [2005] LPT4, [5].
3. The disciplinary consequences of a breach of undertaking may be mitigated by appropriate remedial action: see Legal Services Commissioner v McColm [2006] LPT 14 where, following an unintentional breach of an undertaking to hold funds in trust, the practitioner restored the deficiency personally and held the funds pending judicial determination of the parties’ entitlements. The solicitor’s conduct was found to fall just short of professional misconduct, but still amount to unsatisfactory professional conduct.

Breach of undertaking – breach of contract. As Dal Pont notes, 'an undertaking given to a third party, or to another lawyer, may be enforced by way of civil claim for breach of contract if the requirements of a contract are met'²⁰ and that 'a lawyer assumes no contractual liability to non-clients unless he or she undertakes a contractual relationship with those persons'.²¹

For Queensland practitioners, refer to Guidance Statement No. 1 – Undertakings

16 See also: Countrywide Banking Corporation Ltd v Kingston [1990] 1 NZLR 629, 640 (Wylie J); Re Nelson (1991) 106 ACTR 1, 22 (Higgins and Foster JJ); A Ltd v B Ltd [1996] 1 WLR 665, 674 (Sir John Vinelott). An undertaking should be fulfilled in best faith: Re McDougall's Application [1982] 1 NZLR 141.

17 D Webb, Ethics, Professional Responsibility and the Lawyer (LexisNexis, 2nd ed, 2006) [15.9.17].

18 Law Institute of Victoria, If I give an undertaking on behalf of my client, am I personally bound by it? <http://www.liv.asn.au/For-Lawyers/Ethics/Common-Ethical-Dilemmas/Undertakings/If-I-give-an-undertaking-on-behalf-of-my-client,-a>.

19 In this case the High Court held that a senior conveyancing clerk in settling a sale transaction on behalf of the solicitors had given an undertaking to satisfy certain requisitions ‘in consideration of settlement’ had personally bound his employer by that undertaking. See also: Legal Services Commissioner v King [2013] QCAT 260.

20 See Dal Pont ‘Lawyers’ Professional Responsibility’ Thomson Reuters 5th ed. 2013 [22.10].

21 Ibid [22.15].