Undertakings - accept with care, fulfil without exception

A number of lawyers have recently come before the Discipline Committee for failing to respect the sanctity of their undertakings — such as by trying to avoid responsibility for certain elements of those undertakings or failing to fulfil the undertakings promptly.

In one case, Lawyer 1 gave an undertaking to Lawyer 2 to pay out a financial charge and to provide Lawyer 2 with evidence of the payout within five business days of the completion date. Although Lawyer 2 pressed Lawyer 1 for evidence of the payout for three months, Lawyer 1 failed to provide evidence of compliance until the Law Society began an investigation. At that point, it was determined that Lawyer 1 had handled the payout in a timely manner, but failed to fulfil his reporting obligations to Lawyer 2. The Discipline Committee directed that Lawyer 1 attend a meeting with a Conduct Review Subcommittee to discuss this conduct.

This investigation is one of a number in which lawyers accepted the standard Canadian Bar Association real estate undertakings without properly considering and diarizing the obligations arising from those undertakings.

In another case, a citation was issued against a lawyer on the basis that unreasonable delay in performance of the undertaking amounted to a breach of the undertaking. The lawyer argued that delay was not a relevant factor in assessing the conduct since timely performance was not a specific term of the undertaking and since the undertaking was ultimately fulfilled. The case came before the BC Court of Appeal: The Law Society of British Columbia v. Heringa 2004 BCCA 97. In reasons for judgment, Mr. Justice Hollinrake quoted with approval from the Law Society hearing panel decision concluding that Mr. Heringa’s delay in that case amounted to a breach of undertaking:

The heart of the panel’s reasoning is, in my opinion, found in these words:

[37]  Undertakings are not a matter of convenience to be fulfilled when the time or circumstances suit the person providing the undertaking; on the contrary, undertakings are the most solemn of promises provided by one lawyer to another and must be accorded the most urgent and diligent attention possible in all of the circumstances.

[38]  The trust and confidence vested in lawyers’ undertakings will be eroded in circumstances where a cavalier approach to the fulfilment of undertaking obligations is permitted to endure.  Reliance on undertakings is fundamental to the practice of law and it follows that serious and diligent efforts to meet all undertakings will be an essential ingredient in maintaining the public credibility and trust in lawyers.

After a lawyer accepts an undertaking, it is not open to the lawyer to pick and choose which elements of the undertaking will be performed or to improperly delay the performance of the undertaking.

The Discipline Committee emphasizes that undertakings are critical to the proper conduct of legal work and to public confidence in the profession. As expressed on many occasions over the past few years, the events surrounding the Martin Wirick matter should not leave anyone in doubt about the need to perform an undertaking completely and in a timely manner.

The Discipline Committee also reminds the profession that the Law Society Rules now place greater accountability on all lawyers involved in real estate transactions to monitor and report instances where parties to a closing have not fulfilled their obligations in a timely manner. Rules 3-88 and 3-89 require a BC lawyer to report to the Law Society the failure of a mortgagee to provide a registrable discharge of mortgage within 60 days of any real property transaction. The rules also oblige a lawyer to report to the Law Society the failure of another lawyer or a notary to provide satisfactory evidence that he or she has filed a registrable discharge of mortgage as a pending application at the Land Title Office within that 60-day period. A lawyer has five business days to report.