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Cite as: [2001] EWHC Ch 465
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Hole & Pugsley v. Sumption [2001] EWHC Ch 465 (5th December, 2001)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
| Royal Courts of Justice Strand, London, WC2A 2LL | ||
B e f o r e :
____________________
HOLE & PUGSLEYClaimant - and - PENELOPE JANE SUMPTION Defendant
Handdown: Wednesday 05 .12.2001
JUDGMENT
____________________
Signed: ..................................................... Mr Justice Hart
Date: .....................................................
This judgment will be made available on the Court Service web site:
http://www.courtservice.gov.uk/sitemap.htm under the heading “judgments” on the homepage
Crown Copyright ©
- This is an application by the defendant for summary enforcement of a solicitor’s undertaking given by the claimant firm of solicitors on 16 November 2000. The proceedings in which the application is made were brought by the claimants in June 2001 seeking negative declaratory relief in respect of that undertaking. The issue before me is whether the claimants have a real prospect of succeeding at trial in showing either that they were not in breach of the undertaking or that the defendant is not entitled to the relief sought in respect of such breach.
- In the autumn of 2000 the claimants were instructed to act for the vendors and legal owners (“the trustees”) of a property known as Holcombe Court Holcombe Rogus, Wellington, Somerset (“the property”) namely Patricia Mary Dobree, Jonathan William, Honniball Sumption (“the husband”), and Gideon Robert Sumption (“Gideon”). The defendant was at that time still married to the husband and the property had been their matrimonial home. It was common ground that the property was held by the trustees on trust for the husband, Gideon and the defendant, but the extent of the defendant’s beneficial interest was controversial. It was, however, acknowledged to be at least 16.67%.
- By October 2000 the trustees had decided to sell the property. The marital difficulties which then existed between the husband and the defendant led to the latter instructing a separate firm of solicitors to act for her in relation to the sale, namely Messrs Burges Salmon. An exchange of correspondence took place on 11 October 2000 between Mr Pugsley of the claimant firm and Miss Hallam of Burges Salmon in relation to proposals then being made by the husband for application of the proceeds of sale of the property (then expected to be £1.8m). At that stage the proposal was that (1) £600,000 should be applied in the purchase of another property (Bradleigh Down) to be held in equal shares by the husband and the defendant; (2) £500,000 should be applied in discharge of a mortgage over the property in favour of the Agricultural Mortgage Corporation; (3) £100,000 would be used to discharge a mortgage over a property (“Spypost”) owned by the defendant absolutely; (4) £250,000 should be used to set up a fund out of which the couple’s children’s school fees could be met; leaving (5) a balance of £400,000 which could be used to discharge bank borrowings incurred in respect of the husband’s business and to provide further working capital for the business. In his letter Mr Pugsley told Miss Hallam that;
- In her reply Miss Hallam emphasised that the defendant did not wish to frustrate the sale and that the only issue was as to the use of the proceeds. She raised a number of questions in relation to the bank’s second mortgage, concluding:
- So far as material, Mr Pugsley’s reply dated 11 October read:
- The sale which had been in prospect in October fell through, but by 14 November a new purchaser had been found at a sum of £1,975,000. On that day Mr Pugsley wrote to Miss Hallam impressing on her the urgency with which the defendant was now being asked to sign the proposed contract. He wrote:
- Following a further conversation with Miss Hallam on the subject of the amount needed to satisfy the bank, he wrote a second letter explaining that while the debt to the bank in respect of the business was approximately £500,000 it was likely to have increased to £600,000 by the expected date for completion in January/February 2001, and that apart from the property the bank had security only for some £300,000. In addition a further £75,000 was required to repay a debt said to be owed to the defendant’s stepfather.
- On 15 November Miss Hallam spoke to Mr Pugsley. She says that she told him that the defendant would only agree to £275,000 going to the bank. Mr Pugsley does not quarrel with this in his witness statement in opposition to the application. She also says that Mr Pugsley rang back:
- There is, however, no dispute about what followed. Miss Hallam wrote on 16 November in the following terms:
- Mr Pugsley replied, initially by a without prejudice letter, but in due course by an open letter, as follows:
- Miss Hallam responded to this with the following:
- Whatever else may be unclear, what was contemplated by this exchange was that the following deductions would be made from the £1,475,000 proceeds:-
- Completion of the sale took place on 15 February 2001. The claimants accounted for the deductions as follows:
- If the defendant’s contentions in respect of Deductions A and C are correct, the effect is that the school fees fund has fallen short of its target by £68,884.84 and the defendant has been deprived of the £399,341.35 which would have been her share of the balance. It is these sums which she seeks to recover from the claimants.
- At the centre of the case lies a short point of construction of the correspondence which took place on 16 November 2000. On the defendant’s construction, the undertakings in respect of Deductions A and C were that no more than £25,000 and £275,000 would be paid out in respect of those items. The claimants contend, on the contrary, that in each case the limitation to those figures and no more was contingent on the fulfilment of a further condition which was in the event unsatisfied: in the case of the £25,000 figure, the condition was that a sale of the matrimonial chattels would be achieved from which any excess of sale costs over the £25,000 could be discharged; and in the case of the £275,000 the condition was that that should in fact be the amount sought by the bank at completion: if it was more than £275,000 the excess could be deducted provided that the husband’s half share was debited before that of the defendant.
- The claimants’ primary submission was that this question of construction was unfit for summary determination.
- I turn therefore to those questions, dealing first with Deduction C.
- On the face of it paragraph 4 of Miss Hallam’s letter of 16 November is clear and unqualified. If it is qualified at all it must be by the penultimate paragraph of the letter, in which Miss Hallam suggested that there were two possible approaches to the question of the payment to the bank. One was to throw the risk of the Bank requiring more onto the husband (and the claimants as his solicitors giving the undertaking). That is how I interpret the first sentence of the paragraph: it is seeking to explain and justify the way in which the proposed undertaking had been drawn. The other possibility was that Mr Pugsley might be able to satisfy her that there was in fact no risk of the bank seeking more than the £275,000. That is how I interpret the final sentence.
- In the course of argument Mr Berry on behalf of the claimants accepted this interpretation of Miss Hallam’s letter as the correct one. He submitted, however, that Mr Pugsley’s reply introduced by way of counter-offer a new proposal, namely that whatever the bank required for the release of its charge would be paid to the bank, any excess over £275,000 being borne first by the husband’s share of the net proceeds. On this analysis it was, it was submitted, implicit that in the unexpected event of the husband’s share being insufficient for the purpose, the excess would of course have to be paid out to the bank before any other of the payments could be made and that they would have to abate accordingly.
- On the defendant’s construction of Mr Pugsley’s reply, all that Mr Pugsley was doing was, first, explaining that he could not provide evidence that the bank would release its charge for £275,000 and, secondly, that he and his client proposed to deal with the problem of any excess by debiting the husband’s share. The undertakings sought by Miss Hallam’s letter were therefore qualified only to the extent that a payment in excess of £275,000 might be paid to the bank but only at the expense of the husband’s share.
- What the subjective intentions of Mr Pugsley and Miss Hallam were in writing what each did is irrelevant to the question of construction. That can only be answered on a fair reading of the correspondence itself. On such a reading I have no doubt that the defendant’s construction is to be preferred. The plain intention of Miss Hallam’s letter was to achieve certainty that the school fees fund of £275,000 and the defendant’s share of approximately £400,000 would be secured to the defendant (albeit on a temporary basis until the final matrimonial settlement was agreed) if she consented to the sale going ahead. Mr Pugsley’s reply confirmed that “the terms set out in your faxed letter are agreed in full”, and expressly undertook to make each of the payments listed in that letter. There is, in my judgment, no room to interpret Mr Pugsley’s letter as containing the radical counter-proposal that the reference to £275,000 in paragraph 4 should be read as “£275,000 or such larger sum as the bank may in fact require in order to release its charge.” I reach that conclusion simply on the basis of the language used. I am fortified in it, however, by the fact that, against the background of the earlier negotiations which had taken place between Miss Hallam and Mr Pugsley precisely on the subject of limiting the amount to be paid to the bank, the claimants’ construction simply makes no commercial sense: it would have left the husband free to increase the bank borrowing to any extent which he chose.
- The construction of the undertaking given at paragraph 2 is, if anything, even clearer. The item in question (estate agents’ and solicitors charges) was not charged on the property. No reason therefore existed in this case to suppose that any difficulty might be encountered in complying with the undertaking. The fact that the undertaking was given on the understanding, or in the expectation, that the excess over £25,000 would in fact be found out of the proceeds of sale of chattels provides no reason to qualify the undertaking.
- Mr Berry submitted that there was a principle of law whereby, if the giver of a solicitor’s undertaking finds himself unable to comply with it he can rid himself of the liability if at the earliest opportunity he informs the recipient of the change of circumstances. Authority relied on for that proposition was said to be a passage in Cordery on Solicitors, 9th Edition, at para 908 and a decision of the Court of Appeal in Citadel Management v Equal Limited [1999] 1 FLR 21.
- The relevant facts for this purpose are that, by a letter dated 1 December 2000, the claimants wrote to Hole & Pugsley advising them that the bank was now requiring the full net proceeds of sale to be paid to it after deduction of the sale expenses and the discharge of the first mortgage to the AMC. The bank overdraft by that time appeared to have risen to £840,000. Hole & Pugsley wrote
- Assuming for the moment that the principle contended for exists, I am far from satisfied that the circumstances outlined in the letter were “changed circumstances” or that the letter was written at the earliest opportunity. The bank had in fact written to the claimants on 23 October stating that it would require the net proceeds of sale, and Hole & Pugsley had signed an undertaking to the bank on 27 October to “pay to you sufficient to redeem the charge to the bank”. Since on the claimant’s own case wide variations in the overdraft were foreseeable, there was from the outset a tension between the claimants’ undertaking to the bank and that to the defendant. The only change in circumstances was that by 1 December all possibility of compliance with both undertakings had finally evaporated. I will, however, assume for present purposes that the claimants have a sufficient prospect of showing a relevant change of circumstances to justify my not summarily determining the issue.
- The passage in Cordery relied on is in the following terms:
- The question before the Court of Appeal in Citadel was whether a committal order should stand against a solicitor (Mr Thompson) who found it impossible to comply with an undertaking which he had given, but who had previously assured the court that he was in a position to fulfil it. Buxton LJ held that where the alleged impossibility was “the inability of the solicitor to do what he assured the court who made the order enforcing the undertaking that he could in fact do the solicitor could not be heard to assert that as a reason why he should not suffer the penalty for breach of an order that was properly made on the basis of those assurances” (see p. 29). He went on, however, to add the further consideration that in that case the court had never been clearly told when it was that the solicitor had realised the alleged impossibility of the undertaking. In that context he cited the passage from Cordery, and commented:
- It does not appear to me that Buxton LJ was there elevating the passage in Cordery to the status of a general principle that a solicitor can rid himself of liability under an undertaking simply by invoking a change of circumstances and its notification to the recipient of the undertaking. The question at issue was whether or not Mr Thompson had properly been made the subject of a (suspended) committal order, and whether, having failed to comply with the condition of suspension, he should be committed. The passage in Cordery was relevant only in showing the absence of a potentially mitigating circumstance.
- The passage in Cordery states the proposition that failure to disclose the change in circumstance will result in the giver of the undertaking being liable to discharge the whole of the mortgage debt. It does not expressly state that disclosure will relieve from liability. It is difficult to see why it should. If it were so, every solicitor’s undertaking would have to be read subject to an implied term that it would only hold good so long as circumstances remained the same and the recipient had not been advised to the contrary. Such a term is far from being either necessary or obvious. Indeed, so far as the present case is concerned, the implication of such a term would destroy the business efficacy of the undertaking.
- The jurisdiction invoked is the inherent supervisory jurisdiction of the court over its own officers: see Udall v Capri Lighting [1988] 1 QB 907, C A at 917. That case shows that in exercising the jurisdiction the court will not order its officer to do the impossible, but may order the payment of compensation. In the present case the compensation sought consists of the sums which would have been received had the undertaking been complied with.
- In support of the submission that it was both appropriate to order compensation in this case, and that this was the correct measure, reliance was placed by Mr Mann QC on the recent decision of the Court of Appeal in Patel v Daybells [2001] EWCA CIV 1229 (Robert Walker, Longmore LLJ, Carnwath J). That case concerned the practice under which a purchaser’s solicitor accepted a vendor’s solicitor’s undertaking to provide a written undertaking that all subsisting mortgages would be discharged on or before completion. The issue was whether it had been negligent for the purchaser’s solicitor to have accepted such an undertaking. It was held that it was not. The central role played by such undertakings in conveyancing practice was noted by the court, stress being laid on the fact that “as between the solicitor who gives the undertaking and the purchaser the undertaking is unconditional and unqualified. Moreover it is backed by the summary procedure for its enforcement, and by the Solicitors Indemnity Fund (or the equivalent arrangements which have now replaced it) and the Compensation Fund” (see para 62). The court also noted that the system reflected the fact that it was unusual for a purchaser to know the state of account as between the vendor and his mortgagee.
- Mr Mann submitted that, just as a purchaser who hands over money at completion on the strength of such an undertaking would expect to obtain summary compensation on non-compliance, so here the defendant who had counter-signed the sale contract on the strength of the claimants’ undertaking should be put in the same position as she would have been had the undertaking been complied with.
- There are differences between the two situations. In the paradigm case of the purchaser, he has a contractual right as against the vendor to insist on the mortgage being discharged. The solicitor’s undertaking is given at completion in order to enable the purchase money to be paid over in advance of the discharge of the mortgage. In the present case, however, the defendant’s only pre-existing right was as a beneficial owner of an unascertained share of the proceeds after discharge of prior encumbrances. Her only ability to procure the discharge of those encumbrances otherwise than at the expense of her share lay in the bargaining position she had as against the husband in being a necessary party to the contract. Extraction of the undertaking was therefore the price of her co-operation, and not simply a mechanism for facilitating completion. While that distinguishes this case from the typical one, the distinguishing feature seems to me to strengthen rather than weaken the case for ordering compensation and doing so on the basis of the measure claimed. Indeed, if one analyses the relationship as one of a simple contract between the claimants and the defendant (and I cannot at present see why one should not) there could, I think, be no answer to a claim for damages for breach calculated on the footing of putting the defendant in the position she would have been in had the contract been complied with.
- The jurisdiction being invoked being that of the summary enforcement of a solicitor’s undertaking, it is clear that compensation will not necessarily be awarded on that basis, or at all. As Kerr LJ pointed out in Udall (supra at 923) by reference to passages in the judgments of Nicholls LJ and Sir John Donaldson MR in Fox (John) v Bannister, King & Rigbegs (note) [1988] QB 925:
- I have considered whether this is a case where that residual discretion ought to be exercised in the claimants’ favour, or at least a decision deferred on that question until trial. I have concluded however that the answer to both questions is negative. On my construction of the correspondence there was not, in my judgment, “real scope for genuine misunderstanding”. Moreover, although it is possible that enforcement of the undertaking by ordering compensation will swell the assets available for division on divorce above what they would have been had no undertaking ever been given, that is not a consideration which in the end would justify the court in depriving the defendant of the advantage which was negotiated for her by Miss Hallam. It was for the claimants to satisfy themselves that they could safely give the undertaking which was sought.
- Accordingly in my judgment the defendant is entitled to the order which she seeks.
Mr Justice Hart
"The amount currently secured by way of second mortgage to the bank on the property is in the region of £500,000, but this is working capital and can fluctuate fairly widely".
"It appears from the proposal that the Bank will agree that other payments should be made from the proceeds of sale of Holcombe Court, before any indebtedness to them is discharged. Is that correct? In summary, am I right in thinking that Mr and Mrs Sumption are free to decide what should happen to the whole of the £1,350,000 that will be available on sale of Holcombe Court after the AMC has been repaid?."
"9. Final terms remain to be agreed with the bank but it is certainly understood that the bank will not simply require repayment of the £500,000 on the sale of the property. The intention is that the final balance of £400,000 referred to in my letter of yesterday should be utilised to strengthen the trading position of the two companies by injecting further money, partly by increasing my clients equity share in the business and partly by reducing borrowings.In summary Mr and Mrs Sumption are free to decide what should or should not happen to the following sums mentioned in my letter of yesterdays date:
(a) To buy or not to buy Bradleigh Down £600,000.
(b) To repay or not to repay the mortgage on Spypost £100,000
(c) To fund or not to fund school fees £250,000
TOTAL £950,000"
"Broadly I see the figures as follows:Net proceeds £1,950,000.00
LESS
AMC mortgage £ 500,000.00
£1,450,000.00
LESS
Barclays Bank (probable minimum
repayment required) £ 375,000.00
£1,075,000.00
LESS
Fund for school fees £ 275,000.00
£ 800,000.00
Our suggestion is that as an interim measure, and subject to the points noted below, this sum should be divided half and half on completion, so that each of our respective clients would receive approximately £400,000 from the purchase money.
This would enable my client to bid for Bradleigh Down on the basis of a payment of £400,000 plus up to another £200,000 by way of mortgage from the bank.
The qualifications mentioned above are as follows:
1) This would be an interim arrangement only.2) A timetable would be set for a full mutual disclosure of financial information.3) The parties, and their respective advisers, would seek to agree terms for a final financial settlement on the basis of a permanent separation or divorce.4) This would all be done before completion at the end of January or early February 2001 and the actual amount payable to each party on completion adjusted accordingly."
"to confirm that they can get the bank loan down to £275,000 and he confirmed that the contract could be got to them tomorrow and there would be time."
Mr Pugsley denies having said that the husband could get the bank loan down to £275,000.
"Dear Mr PugsleyMr and Mrs Sumption: Without Prejudice
We have spoken by telephone, but I now write to confirm the terms on which Mrs Sumption would be willing to sign and release the contract for sale of Holcombe Court. I believe that the terms set out below are agreed by Mr Sumption.
1. Mrs Sumption would sign and release the contract for the sale of Holcombe Court at £1,975,000, and would otherwise co-operate with the sale provided that I had received from you an undertaking to make payments on completion as follows.
2. The first £25,000 of the proceeds of sale will applied towards the estate agents’ and solicitors’ costs in respect of the sale; I understand that negotiations are continuing in relation to the sale of fixtures and fittings, and it is expected that the balance of the sale costs will be met from that source. It would be helpful if you could confirm the amount that is agreed for fixtures and fittings, but I am assuming that there will be no surplus from them over and above the costs of sale.
3. From the balance of £1,950,000, the AMC mortgage of £500,000 will be discharged. I am assuming that the redemption figure will not exceed £500,000.
4. The next £275,000 will be paid to Barclays Bank, and it is assumed that the Bank have agreed to release their Charge upon payment of this sum on completion.
5. The next deduction will be to redeem the mortgage of around £100,000 presently secured against the property in Mrs Sumption’s name at Exeter Road, Rockwell Green, Wellington (referred to in our correspondence as “Spy Post”). Clearly we will need an up-to-date redemption figure. It may be that Mr Sumption has this information.
6. The next deduction from the proceeds of the sale will be £275,000, which will be held pending further agreement in an account in the joint names of Mr and Mrs Sumption, and will be applied by them only for payment of the childrens’ school invoices, unless they agree otherwise.
7. The balance of the proceeds of sale, estimated at £800,000, will be divided equally between Mr and Mrs Sumption. I am assuming that there is no need for a retention of CGT, since I understand that there is not expected to be a chargeable gain on the sale, but would be grateful if you would confirm this.
8. I am assuming that the deposit will be held by your firm pending completion.
It is agreed that the arrangements set out above would not constitute a final settlement between Mr and Mrs Sumption in relation to any future separation or divorce proceedings. Instead, there would be an exchange of financial information and efforts would be made on both sides to attempt to agree final terms. In the event that a different agreement was reached before completion, it would be possible to vary the arrangements set out above by agreement. In default of agreement, the funds would be divided as set out above.
Since Mrs Sumption has no control over the arrangements with the Bank, I think it would be appropriate for Mrs Sumption’s share of the residue of the proceeds of sale (estimated at £400,000) to be calculated on the assumption that only £275,000 will be payable to Barclays Bank, whatever final figure they may require. Alternatively, it may be possible for you to give me documentary evidence that the Bank will agree to release their charge on payment of the £275,000 in any event.
Assuming that these terms are agreed, I look forward to hearing from you with a draft undertaking for approval.
Yours sincerely"
"Dear Miss HallamMr and Mrs Sumption
Thank you for your faxed letter of this morning which I have been able to discuss with my client.
I am pleased to be able to confirm that the terms set out in your faxed letter are agreed in full.
Please therefore accept this letter as my firms undertaking, on receipt of the signed contract from Mrs Sumption, and on completion of the sale of Holcombe Court for £1,975,000, to make the payments listed in the numbered paragraphs 2,3,4,5,6 and 7 of your fax.
As to the payment of £275,000 to Barclays bank, we have not yet obtained written confirmation from the bank that they will release their charge upon receipt of that sum on completion. If the bank should require more, then the excess would be a charge against my clients half share of the final net proceeds.
I confirm that this does not constitute a final settlement between the parties and that if a different agreement can be reached before completion the arrangements set out above would be varied by such subsequent agreement.
You have asked for a draft undertaking for your approval but I hope that you will find the undertaking incorporated in this letter acceptable. If you would like any alterations would you please let me know by telephone as soon as you can.
My client has arranged for a messenger to attend at your clients surgery at 11am this morning to collect the contract signed by your client and I hope that you will find it possible to report to her before that time."
"Thank you very much for your fax of 16 November.I write to confirm on an open basis that the terms of your undertaking are accepted.
I have therefore authorised Mrs Sumption to release the contract for the sale of Holcombe Court, and I look forward to hearing from you with confirmation that contracts have been exchanged."
1) £25,000 costs of sale (Deduction A);
2) £500,000 AMC mortgage (Deduction B);
3) £275,000 to the bank (Deduction C)
4) £100,000 approx. To redeem the Spypost mortgage (Deduction D);
5) £275,000 in a school fees fund (Deduction E)
leaving a balance “estimated at £800,000” to be divided equally between the husband and the defendant. The balance could only be estimated because the exact redemption figure in respect of the Spypost mortgage was not known.
1) Deduction A £62,487,56. This was made up of agent’s fees of £52,214.06 and the claimants’ own costs of £10,273.50 The defendant contends that only £25,000 should have been deducted.
2) Deduction B £507,285.39. This was made up of the £500,000 due to the AMC together with interest. The defendant accepts that this deduction was properly made.
3) Deduction C £1,105,093.98 in respect of the bank’s second mortgage. Herein lies the heart of the present dispute. The defendant’s contention is that only £275,000 should have been deducted;
4) Deduction D £94,031.91. This in respect of the SpyPost mortgage, was less than had been contemplated. The defendant accepts that this deduction was properly made.
These deductions left a balance of £206,101.16 which was applied in creating the school feels fund.
The Construction Point
In relation to the £25,000 deduction it was submitted (correctly) that there was a factual dispute, incapable of resolution on a summary determination, as to the extent to which the defendant had failed to co-operate in achieving a sale of the chattels. Resolution of that dispute is, however, unnecessary for the purposes of construing the undertaking. In relation to the discharge of the bank’s second charge, it was submitted that further elaboration of the matrix was necessary and desirable before the court could come to a firm conclusion. The only pleaded fact relevant to the question was the fact that the indebtedness to the bank was, and was recognised to be, subject to the possibility of wide fluctuation. That fact is, however, plain on the face of the correspondence and I am unable to see how oral testimony would add to its effect. In addition, reference was made to several points at which Mr Pugsley in his witness statement took issue with what Miss Hallam had said (or had been taken as saying) in her witness statement concerning the oral communications between herself and Mr Pugsley. Again, however, resolution of these issues appears to me to be irrelevant to the questions of construction raised by the exchange of correspondence. I do not consider that the determination of those questions requires a trial.
Change of Circumstances
"From our own point of view the most important thing is a variation in my firms undertaking contained in our open letter of the 16 November, so that we may pay the net proceeds to the bank, without which we cannot get the Banks second mortgages discharged, which in turn would prevent the completion of the sale of Holcombe Court."
"Where, after the undertaking has been given, circumstances change so that the undertaking is no longer possible of fulfilment either wholly or in part, the recipient of the undertaking must be informed of the changed circumstances at the earliest opportunity. If the giver fails to notify the recipient of the change in circumstances the giver will be bound to honour the undertaking as originally given. Where, for example, an undertaking has been given to discharge a mortgage on the client’s behalf and it subsequently becomes clear that insufficient funds are available to discharge the debt, the recipient of the undertaking must immediately be informed of the changed circumstances, failure to disclose the change will result in the solicitor who gave the undertaking being liable to discharge the whole of the mortgage debt, even if this means that he has to use his personal funds to do so."
"The example envisaged by Cordery is somewhat different from the subject in this case, but the guidance seems, if I may say so, to be eminently proper and sensible as to what a solicitor should do if he finds that he cannot undertake what he has undertaken to do. Mr Thompson never, as far as we can see, did any of that, nor does he appear to have given any information to the recipient of the undertaking, until the argument before Wright J, that the position had changed. I would not base my judgment on that failure alone, but I do consider that the fact that that precaution was not taken by Mr Thompson further underlines the unsoundness of the ground on which he now seeks to avoid or set aside the order for committal made by Rougier J on the basis of Mr Thompson’s own admissions and assurances."
Appropriateness of relief claimed
"....even where it has been established that an undertaking has been given but not performed, the court still retains a residual discretion about the order which is appropriate in the circumstances. In cases where enforcement of an undertaking by an order for its performance is still possible and practicable, such an order will no doubt be made more or less as a matter of course. The reason is that the failure to perform an undertaking which is still capable of being performed will generally amount to professional misconduct or a serious dereliction of professional duty, to use the expressions mentioned in the judgments. But these passages also show, to use the language of Nicholls LJ post, p. 930F-G, that “a solicitor is not necessarily to be regarded as having misconducted himself by failing to honour an undertaking”. One of the examples which he gives is the situation “where there was real scope for genuine misunderstanding on what was said or meant by a solicitor on a particular occasion.”
© 2001 Crown Copyright