Hidden undertakings

During the sale of a residential property, a legal executive employed by the seller's solicitors gave an undertaking that a restriction registered on his client's title 'would be removed on completion'.


Prior to completion a statement was obtained from the person entitled to the benefit of the restriction. The statement consented to the sale of the property 'pursuant to the restriction dated X referred to in entry number Y on the proprietorship register'. Completion duly took place and the statement was handed to the buyer's solicitors together with other documentation.


For reasons that remained unexplained, the buyer's solicitors did not apply to register the purchase for six months. On eventual application, the Land Registry contacted the author of the statement who by then had changed her mind. She said she would not now consent to the removal of the restriction and had never done so.


The buyer's solicitors claimed the firm was in breach of its undertaking. The supervising partner defended the position on the basis that the statement had served to meet his firm's obligations.


The matter proceeded to adjudication. The adjudicator found that there had been a breach of undertaking. The solicitors had undertaken that the restriction would be 'removed on completion'. The terms of the document supplied on completion gave consent to the transaction pursuant to the restriction, but it did not confirm consent to the removal of the restriction. In the interim, the author of the statement had moved abroad. The supervising solicitor was in some difficulty. The adjudicator indicated that it was not his position to speculate on what might have happened if the buyer's solicitors had made an earlier application to register the purchase. It may well have been the case that the beneficiary's decision would have remained the same.


In the event, the supervising partner found himself in breach of principle 18.11 of The Guide to the Professional Conduct of Solicitors 1999 (Edition), in that he was responsible for honouring an undertaking given by a member of his staff. The adjudicator further considered that the statement, signed and presented on completion, had been given in good faith. It consented to the sale of the property by its referral to the restriction concerned.


The adjudicator chose not to impose any form of sanction on the solicitor as supervising partner, but to direct that his finding be recorded. The adjudicator was informed that the solicitor had done what he could to rectify the position and had spent considerable time attempting to do so. It was unfortunate that he found himself in such a predicament, but a finding of misconduct was nonetheless inevitable.


This case study is for illustration only and should not be treated as a precedent