New Zealand Law Society - Fined for breach of undertaking

Fined for breach of undertaking

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[Names used in this article are fictitious]

Despite his client instructing him not to honour an undertaking he had given, a lawyer has been fined $2,500 for breaching that undertaking.

The lawyer, Rokesmith, acted for his client, Mr Ayresleigh, who was selling a property.

Mr Ayresleigh agreed to complete some remedial works to the property before settlement. However, an inspection before settlement alerted the buyers to the fact that the remedial works were not complete. The buyers then sought a $3,000 reduction in the purchase price.

However, Ayresleigh did not agree to that. After further discussion between the parties, Rokesmith agreed to an undertaking that he would hold $3,000 in his trust account for two weeks to allow the buyers to inspect the works, which “will need to be completed in a satisfactory and workmanlike manner to [the buyers]”.

After settlement, the buyers maintained that the remedial works were not completed and sought payment of the $3,000.

Rokesmith’s client maintained that the remedial works had been completed and, on his instructions, Rokesmith refused to release the $3,000.

The buyers’ lawyer complained on their behalf to the New Zealand Law Society Complaints Service.

A lawyers standards committee found that Rokesmith had breached his undertaking, and that was unsatisfactory conduct.

“The undertaking is clear,” the committee said. “The work was to be completed to a standard satisfactory to the purchasers.”

Had Rokesmith given the language in the undertaking more thought “he clearly could have amended it to express what he says the undertaking intended, yet he didn’t.

“Undertakings are given and taken based on the trustworthiness and integrity of the legal profession.

“This would be greatly diminished if any practitioner were to be permitted to say: ‘I should not have to honour this undertaking because even though I accepted it, it does not say what I intended it to say’.”

As well as the fine, Rokesmith was ordered to pay $750 costs.

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