Topic 6-Solicitors Undertaking-Case-with-f-or-p PDF

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Solicitors’ undertaking INTRODUCTION  An undertaking is defined as: A statement of an intention / promise to do something / refrain from doing something to someone who reasonably relies on it. 

Hence, a solicitor’s undertaking: a promise by a solicitor to do something, to cause something to be done / to abstain from doing something in circumstances where the recipient of the promise reasonably places reliance on it.

Madam Packiam Ramalingam v. Badan Peguam Malaysia [1999] 4 CLJ 804, Abdul Malik Ishak J:“An undertaking may be described in many ways. Bluntly put, it is an unequivocal declaration of intention addressed to someone and that someone places reliance on it. Eg: “We M/S A & S as the solicitors for M/S Vendor Bank Bhd. hereby undertake that upon the payment of the redemption sum in respect of the said property in the sum of RM50,000/- we shall:a. forward the duly executed discharge of charge; and b. title deed to the said property, for your further action.”  Undertakings are distinguishable from non-enforceable promises.  Normal contractual principles (offer, acceptance, consideration and intention to create legal relations) do not apply. 

However, there are no clear rules about whether a particular promise is an undertaking.

 A benefiting party cannot assume everything is an undertaking. There is a considerable difference between a solicitor stating they will return a phone call and forgetting and failing to transfer money on completion day when managing a property transaction  If a time frame has been agreed it is more likely an undertaking exists  The undertaking should only be given if it is within the solicitor’s power to perform the task required by the undertaking. 

The reliance placed on the statement by the benefiting party is more important than the solicitor’s intent when making the statement. Hence, lawyers must be careful to ensure that they have their client’s instructions before executing and delivering an undertaking on behalf of clients.

 Solicitor must be careful to ensure that they have their client’s instructions before executing and delivering an undertaking on behalf of clients 1

APPLICABLE LAW English common law. As per T Damodaran V. Choe Kuan Him [1975] 1 LNS 143 (FC), Suffian LP: “The law and practice relating to solicitors' undertakings in Malaya is the same as that in England” (NATURE) PRINCIPLES RELATING TO UNDERTAKING (X11) (i) An undertaking can be given orally / in writing. (ii) It does not have to include the word "undertake“/ "undertaking". 1. How @ Ho Peng Kwang v Tricorp Properties Sdn. Bhd. [2015] 1 LNS 1485 : An undertaking is not precluded simply because the word “undertaking” was not expressly used. What is important is the language used. (iii) The terms must be clear, unqualified and unequivocal 2. In T Damodaram v. Choe Kuan Hin [1980] AC 497  F: An undertaking was given to confirm the balance of purchase price had been paid into the Solicitor’s account and would be released upon the transfer being presented for registration. Though the transfer was registered a third party registered a lis pendens (a written notice that a lawsuit has been filed)  H: The undertaking, which was to pay upon registration, was clear and thus enforceable. the Privy Council ruled that where the terms of a solicitor's undertaking are clear unqualified and unequivocal it is the Court's duty to order the solicitor to comply with his undertaking. 3. Choe Kuan Him v T Damodaran (HC), Syed Agil Barakbah J:  Great care ought therefore to be paid to the wording of an undertaking both by the solicitor giving it and by the person accepting. It must be clearly worded so as to express the intentions of both parties and this is all the more so when the undertaking is given to a person who is not a solicitor. It is for him to consider the probable effect of such instrument before he signs it for the language of an instrument is to be taken most strongly against the party using it. (Per Bayley J in Burrell v. Jones [1819] 106 ER 580, 582). 4. Oriental Bank Bhd. v Abdul Razak Rouse [1986] 1 MLJ 509 : The undertaking must be clear and unequivocal in its terms. Sometimes the word ‘undertaking’ need not be used at all.  F: although the word “undertaking” was not set out in the stakeholder solicitors’ letter, yet Abu Mansor J held that it was a breach of the undertaking when the solicitors failed to present a charge in favour of the bank after the bank had released the redemption sum based on the character of the undertaking and not the form in which it was drafted. (iv) It must be possible to be performed

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5. Oriental Bank Bhd. v Abdul Razak Rouse [1986] 1 MLJ 509: the undertaking must be one which is not impossible ab initio for the solicitor to perform Conveyancing Practice Rulings (Part VII: Undertakings) 23. Solicitor not to impose or request unreasonable undertakings No solicitor shall impose/ request any undertaking from another solicitor which, in the circumstances, is unreasonable and/or beyond the control of the other Solicitor. BC Rulings: 14.09. Undertakings (2) Solicitor not to impose or request unreasonable undertakings or conditions No Solicitor shall impose on or request from another Solicitor any undertaking or condition which is unreasonable and/or beyond the control of the other Solicitor (v) It must be given by a solicitor personally and in his professional capacity as a solicitor. 6. Seah Choon Chye v. Saraswathy Devi [1970] 1 LNS 143  The solicitor’s undertaking must be given by a solicitor personally and not merely as an agent on behalf of his client. It must be given in his professional capacity as a solicitor and not as an individual. 7. Sanjung Selamat Sdn Bhd v. CL Chin & Associates & Anor (Part 4) [2007] 7 CLJ 144; [2007] 1 MLJ 570, Abdul Wahab Patail J mentioned that a solicitor's undertaking is a special one based on his integrity, his profession and as an officer of the court. It is because of this, said His Lordship that such an undertaking is held in higher esteem than that made by the solicitor's client and even though the client did not give the undertaking himself - the solicitor's undertaking is also his undertaking. 8. Bank Kerjasama Rakyat Malaysia Bhd. V Tetuan Harany, Rani & Anikah [1999] 5 MLJ 199: An undertaking by a firm, binds the partners of the firm (vi) A firm is bound by undertaking given by legal assistant in firm’s as legal assistant has ostensible authority 9. Madam Packiam v Bar Council a. Where an undertaking given by a partner of the firm binds the firm. 10. Tunku Ismail b Md. Jewa v Tetuan Hisham, Sobri & Kadir [1989] 2 MLJ 489: An undertaking given by a legal assistant employed by the firm shall bind the firm. 11. Tommy Thomas v Peguam Negara Malaysia [2001] 3 CLR 457 b. Solicitor had through his counsel given an undertaking to the court that he would not publish, repeat certain libelous words made against certain individuals and corporations. However later the same evening during a press interview the appellant stated that the settlement was brokered by the insurers against his express objections. This was a sufficient breach of the undertaking given. 3

12. Re David Marshall; Law Society of Singapore v David Saul Marshall c. The respondent who was acting for employees of the Nanyang Siang pau Chinese language newspaper gave his assurance to the Attorney General in the presence Judge in Chambers that the contents of certain affidavits would not be leaked to the press before the hearing of the matter. However as it turned, there was a leak. It is a breach of undertaking. (vii) If an undertaking is conditional - the conditions must be fulfilled before the undertaking will be enforced. 13. Oriental Bank Bhd. v Abdul Razak Rouse [1986] 1 MLJ 509  Similarly, if the undertaking is conditional, the condition must be fulfilled before the undertaking will be enforced. (viii) An undertaking cannot be withdraw from except by consent. (ix) It is enforceable even upon the death of the client or client changes instructions or changes solicitors. ix) Where undertaking has been waived – it cannot later be enforced. (xi) Disclaimer in e-mail BC Ruling s: Ruling 14.09. Undertakings (3) Disclaimer in e-mails A law firm is prohibited from inserting a disclaimer at the foot of its e-mails to the effect that undertakings given by e-mail purporting to bind the firm shall not be valid unless the undertakings are confirmed in writing by letter on the firm’s letterhead and signed by a partner or partners of the firm. (Law firm is prohibited to insert a disclaimer at the foot of its e-mails to prevent itself bound from undertakings given by e-mails unless the undertakings are confirmed in writing by letter on the firm’s letterhead and signed by partner/ partners of the firm)

ENFORCEMENT OF UNDERTAKINGS 

GR: A solicitor have a professional duty to honour an undertaking once given.

Rulings of the Bar Council, Ruling No 14.09(1)(a) Failure to honour an undertaking amounts to professional misconduct BC Conveyancing Practice Rulings, Ruling No. 22: Failure to honour an undertaking is a breach of professional conduct. This could result in the undertaking being enforced in Court and could also result in disciplinary proceedings being taken for the breach.

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 ‘Misconduct’ in S. 94(3) LPA includes – (b) breach of duty to a court including any failure by him to comply with an undertaking given to a court How to enforce: (i)

applying to the court to exercise its intrinsic authority to order a solicitor (as an officer of the court) to fulfil an undertaking –summary jurisdiction

(ii)

Complaint to the DB for misconduct

(iii)

bringing a civil action in court for breach of undertaking and claim for specific performance and/or damages

1) SUMMARY JURISDICTION  Where a Solicitor gives an undertaking and fails to act on it he shall submit to the summary jurisdiction of the court. Court has jurisdiction to impose high standard of conduct on its officers.  Summary jurisdiction means that the solicitor cannot avail himself of the advantage of a trial i.e. – no pleadings, discovery, oral evidence except by leave of court. (Silver & Drake v. Baines) 14. Udall v Capri Lighting Ltd 1988  In the absence of evidence that the performance of undertaking is impossible, it would be usual to require the undertaking to be performed.  A breach of undertaking is a misconduct on the part of the solicitor and a case for summary jurisdiction.  If the misconduct causes loss court may order solicitor to make good the loss. The fact that the undertaking was to be performed by a third party shall not be a defence eg. solicitor’s clerk  If the undertaking becomes impossible to perform then the Solicitor may have to bear the cost personally occasioned by his breach of duty 15. Karpal Singh v Atip bin Ali 1987 MLJ 291  (Seah CJ) An A&S must first remember that he is an officer of the court and that his professional conduct is subject to supervision and scrutiny of the court. Where there is dereliction od duty on his part in the conduct of his professional wor, the court may, in a proper case, order him to be personally liable for the cost of the proceedings after giving him an opportunity to defend himself. 16. Seah Choon Chye v Saraswathy Devi 1970  …an undertaking given by a solicitor, who is an officer of the Court, is on a different footing since the High Court possesses an inherent disciplinary jurisdiction over its officers. The jurisdiction of the Courts is based upon the rights of the Courts to require its officers to observe a high standard of 5

conduct. The conduct required of solicitors is a higher standard than ordinary men in that it is subject to the special control which a Court exercises over its officers so that in certain cases they may be called summarily to perform their undertakings, even where the contention that they are not liable to perform them is entirely free from any taint of moral misconduct (per Hamilton J, supra). The purpose is to secure a speedy, convenient or inexpensive mode of trial. 17. T. Damodaram v Choe Kuan Hin 1980 PC  the Privy Council ruled that where the terms of a solicitor's undertaking are clear unqualified and unequivocal it is the Court's duty to order the solicitor to comply with his undertaking. 18. T. Damodaram v Choe Kuan Hin 1975 FC (Suffian LP)  (Suffian LP) Mr. Choe is an officer of the Court and we should compel him to honour undertakings by him promptly to secure public trust and confidence in the legal profession which is an ancient and honourable one. 19. S&M Shopping Arcade SB & Ors v Fui-Lian Kwong Hing SB (No. 2) [2006] 8 CLJ 543; [2006] 4 MLJ 350  Abdul Malik J cautioned that a solicitor's undertaking should not be taken lightly and the court has an inherent jurisdiction to entertain an application by any person to whom the undertaking has been given to exercise its summary procedure to compel the solicitor to carry out the undertaking eventhough the applicant is not the client of the solicitor. 20. Bank Kerjasama Rakyat Malaysia Bhd. V Tetuan Harany, Rani & Anikah [1999] 5 MLJ 199  The undertaking given by a clerk employed by the firm shall bind the firm. In this case, the court can exercise its summary jurisdiction to enforce the defendants' undertaking. The undertaking was clear in terms, it was for the payment of a specified amount by an ascertained date. 21. Tungku Ismail bin Tunku Mohd Jewa & Anor v Tetuan Hisham, Sabri & Kadir  Wan Adnan J held that the summary jurisdiction to enforce a solicitor's undertaking should only be exercised in a clear case.  Referred to Silver & Drake v Baines 1971 o Court shall ascertain that the undertaking was given in the solicitor’s personal professional capacity and not merely as an agent.  In this case, the undertaking given by a legal assistant employed by the firm bound the firm and thus enforceable. 22. Silver & Drake v. Baines [1971] 1 QB 396 where Lord Dening MR It may be a simple undertaking to pay money, provided always it is given 'in his capacity as a solicitor'. If such an undertaking is given, the court may summarily make an order on the solicitor to fulfil his undertaking... This summary jurisdiction means that the solicitor is deprived of the advantages which ordinarily avail a defendant on a trial. There are no pleadings; no discovery; and no oral evidence, save by leave.

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23. Tommy Thomas v Peguam Negara Malaysia 2000 Solicitor had through his counsel given an undertaking to the court that he would not publish, repeat certain libellous words made against certain individuals and corporations. But later the same evening, during a press interview, the Appellant stated that the settlement was brokered by the insurers against his express objections. This was a sufficient breach of undertaking given. 24. Seah Choon Chye v. Saraswathy Devi [1970] (Explained procedure)  The proper procedure is that the application should be entitled in the matter of the solicitor, and should be supported by affidavit (note: no SOC, SOD required) setting out the undertaking and other material facts. In the Chancery Division it is made by motion, and in the Queen's Bench Division by summons to a Judge in chambers. Where the undertaking was given in the Court of Appeal an application to enforce it may be made by motion to that Court. In Halsbury's Laws of England, 3rd Edn., Vol. 36, pp. 192-3 para. 263, it is stated that this disciplinary jurisdiction... is exercisable summarily upon application by originating summons, or motion or summons, or at the hearing of the proceeding, and in an appropriate case performance may be enforced by attachment or committal. 25. Re Marchant [1908] 1 KB 998  (Vaughan William LJ) describes the procedure as "what I may call an action commenced in this convenient way by an originating summons". In ordinary circumstances an application by way of motion should be the proper mode. 26. Re A Solicitor & Advocate [1932] MLJ 177  F: A new solicitor who took over the conduct of a matter gave an undertaking to pay the costs of the former solicitors.  H: the fact that the client had a cross complaint against the former solicitors did not detract from the solicitor’s need to honour the undertaking. It was sufficient to enable the court to exercise its summary jurisdiction to compel him to fulfill the undertaking given.

2) COMPLAINT TO DB FOR MISCONDUCT  

2nd method if you do not wish to file for summary proceeding Court may only summarily enforce the undertaking if the undertaking is clear, unambiguous and unequivocal, given in the professional capacity of a solicitor. 27. Lee Chee v Allen & Gledhill [1990]  Had the undertaking been given to the plaintiffs in respect of any litigation proceeding then there is no doubt that the Court has jurisdiction to admonish or penalise the defendants.  For complaints of misconduct, malpractice or dishonest in connection with Df’s practice as A&S, Plaintiffs refer their complaints to the Bar Council as the Court has 7

no jurisdiction to entertain such complaints and it is not the proper forum to deal with the same (the jurisdiction to discipline solicitors which is only given to DB)  Note: In England, Court have disciplinary jurisdiction (unlike Malaysia) because lawyers are expressly stated as officers of the Court in the Solicitors Act 28. Myers v. Elman [1939] 4 All ER 484 

F: The counsel for the P, invited the judge, on the evidence and facts disclosed, to exercise the court’s jurisdiction over its officers for professional misconduct against Mr. E, solicitor for the Dfs on the ground that, inter alia:i. ii.





Filing of defence for the Dfs which he knew to be false Allowing certain affidavit of discovery to be sworn and put on the file which was inadequate and false iii. He was obstructing the interest of justice and delay (Viscount Maugham) Misconduct in the course of proceedings in some cases sufficient to justify an order for cost against the solicitor personally. The primary object of the court is not to punish the solicitor but to protect the client who has suffered and to indemnify the party who has been injured. The jurisdiction ought to be exercised only when there has been established a serious dereliction of duty as a solicitor either by himself or by his clerks. Slides: (Lord Atkins) From time immemorial, Judges have exercised over solicitor a disciplinary jurisdiction in cases of misconduct. At times the misconduct is associated with the conduct of litigation proceeding in the Court itself. Rules are disobeyed, false statements are made to the Court or to the parties by which the course of justice is either perverted or delayed. The duty owed to the Court to conduct litigation before it with due propriety is owed by the solicitors for the respective parties, whether they be carrying on the profession alone or as a firm. They cannot evade the consequences of breach of duty by showing that the performance of the particular duty of which breach is alleged was delegated by them to a clerk. Such delegation is inevitable, and there is no one in the profession, whether in practice or as a Judge, who will not bear ungrudging tribute to the efficiency and integrity with which, in general, managing clerks, whether admitted or unadmitted, perform their duties. The machinery of justice would not work without them.

29. Au Kong Weng v Bar Committee, Pahang [1980] FC  F: DB took up the matter and DC’s investigation found the appellant guilty of confuct unbefitting an A&S. On appeal, Raja Azlan Shah CJ, delivered the judgement and said: “There are no closed categories of professional misconduct. One of the most fundamental duties of an A&S is that he must honour to the utmost the promise or undertaking given by him in a professional capacity to the Court and to members of his profession and failure to honour it is regarded as a breach of professional conduct”  The honesty of officers of the Court is very much the concern of the Court 8

30. Rajasooria v Disciplinary Comm...