Law Society of Singapore v Zulkifli bin Mohd Amin and another matter

• Jurisdiction: Singapore
• Judge: Chan Sek Keong CJ
• Judgment Date: 20 January 2011
• Neutral Citation: [2011] SGHC 19
• Plaintiff Counsel: Andre Maniam SC and Wendy Lin (WongPartnership LLP)
• Docket Number: Originating Summons No 219 of 2010 and Originating Summons No 1292 of 2009
• Date: 20 January 2011
• Hearing Date: 06 August 2010,26 February 2010,23 February 2010
• Subject Matter: Legal Profession
• Year: 2011
• Citation: [2011] SGHC 19
• Defendant Counsel: the first respondent absent,Tan Cheng Han SC (Intelligen Legal LLC)
• Court: High Court (Singapore)
• Published date: 08 February 2011

Chan Sek Keong CJ (delivering the grounds of decision of the court): Introduction

Originating Summons No 219 of 2010 (“OS 219”) was an application by the Law Society of Singapore (“the Law Society”) for three advocates and solicitors who were all partners of M/s Sadique Marican & Z M Amin (“the Firm”) to show cause why they should not be sanctioned under s 83(1) of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“the Act”). All three respondents, Mr Zulkifli bin Mohd Amin (“Zulkifli”), Mr Mohd Sadique bin Ibrahim Marican (“Sadique”), and Mr Anand Kumar s/o Toofani Beldar (“Anand”) were admitted as advocates and solicitors in 2000. The disciplinary proceedings came about as a result of misappropriations by Zulkifli, in 2007, of clients’ monies in excess of $11m.

Originating Summons No 1292 of 2009 (“OS 1292”) was an earlier show-cause application against Zulkifli for grossly improper conduct under s 83(2)(b) of the Act in a property transaction in failing to: use reasonably available legal means consistent with his retainer to advance his clients’ interest; keep his clients reasonably informed of the progress of the transaction; and explain to his clients certain letters or notices received from the vendor’s solicitors.

The facts in OS 219

Zulkifli and Sadique set up the Firm in 2004 as equity partners, with Anand as a salaried partner.

Zulkifli was the managing partner, and he managed the Firm’s client and office accounts. He was also in charge of budgeting. Sadique and Anand had responsibility for matters concerning staff salaries and monthly reviews of the balances in the client account.

The Firm did not have an accounts clerk. From 1 March 2006 to 31 July 2007, the Firm employed one Ms Sally Ang (“Sally”) as finance and human resource manager. She worked under Zulkifli. Sadique explained how the Firm was managed as follows:

[I]n fact the whole accounting role was in a way performed by all of the staff who were handling the files because they prepared and assisted in the preparation of the documents in support of the payment vouchers and submission of the payment vouchers and copies of the cheques. This was to ensure their accountability for each of the file that they carry... it would be every single staff who handled a file and relating to a client account... No member of the staff kept account books. It was kept by Zulkifli and in Sally Ang’s room... As to the exact person or persons who fill up the books, I would not know. This is simply because the system in the firm, since we started, was one of accountability between the partners... we were not comfortable to allow a person in charge of the accounts to be – like a staff to be in charge of the accounts. So what we did was, as we did from the start, for a partner to be accountable to other partners as to how the accounts were kept. So I ensured that the books were there, and I also ensured that monthly reconciliations were sighted by myself and [Anand].

On 31 July 2007, Sally left the Firm. Subsequently, it was discovered that she had misappropriated $838,200 from the Firm. She has since been prosecuted and convicted of seven counts of criminal breach of trust under s 408 of the Penal Code (Cap 224, 2008 Rev Ed), as well as two offences under s 47(1)(b) of the Corruption, Drug Trafficking & Other Serious Crimes (Confiscation of Benefits) Act (Cap 65A, 2000 Rev Ed), and has been sentenced to five years’ imprisonment. According to Sadique, Zulkifli took charge of the Firm’s accounts after Sally left. He did not know whether Zulkifli was assisted by anyone. This admission showed that he did not know what was going on in the Firm in relation to their finances and clients’ monies.

The manner in which the Firm’s client account was managed was explained in a letter written by Sadique and Anand to the Law Society on 28 December 2007:

Essentially, the operation and management of the Client account is for conveyancing matters, of which Mr Zulkifli was the Managing Partner and Conveyancing Partner, to principally handle monies for conveyancing transactions.

…

Mr Zulkifli continued therefore to be in charge of inter alia the engagement of a book-keeper to maintain all cash books, ledgers, journals and reconciliation of the accounts.

The supervision over the Client account was ensured by having in place three signatories to the Client Account of which the mandate to the bank was for any two of the three signatories to sign, namely Zulkifli Bin Mohd Amin, Sadique Marican and Anand Kumar. Zulkifli Bin Mohd Amin is the main signatory.

The mandate given to the Bank was for any two of the three signatories and for any amount from the client account.

[emphasis in original]

Sadique and Anand claimed that stringent controls were in place as “every payment out from the client account had to be supported by payment vouchers, evidence of deposits, completion account breakdowns and other forms of paper work, as the case may be.” These controls were obviously not carried out in practice.

On 19 November 2007, Sadique and Anand discovered that both the Firm’s client and office accounts had been overdrawn. On 20 November 2007, Zulkifli absconded. Two days later, Sadique and Anand informed Ms Yashodhara Dhoraisingam (“Yashodhara”), a Senior Director of the Law Society’s Compliance and Conduct Department, that Zulkifli was missing and that they suspected him of misappropriating monies from both the client and office accounts. Sadique and Anand made a police report on the same day.

On 23 November 2007, Yashodhara informed Sadique and Anand that pursuant to rule 12 of the Legal Profession (Solicitors’ Accounts) Rules (Cap 161, R 8, 1999 Rev Ed) (“the SAR”), the Council of the Law Society (“the Council”) would inspect the Firm’s accounts for the period of 1 January 2007 to 22 November 2007 and requested them to deliver various books of accounts and other accounting records to the Law Society.

The inspection was conducted by the Law Society with the assistance of Mr Kon Yin Tong of Foo Kon Tan Grant Thornton. The inspection revealed that the Firm had not prepared any bank reconciliation statements after July 2007; that, contrary to the SAR, the Firm had issued cash cheques for a total of $5,660,357.02; and that the propriety of issuing these cheques could not be verified due to insufficient documentation supporting the payments.

On 23 January 2008, the Law Society sought a written undertaking from Sadique and Anand that they would cease to hold and receive clients’ monies or act as signatories to the client account of any law practice. On 1 February 2008, the undertaking, effective as from 29 February 2008, was furnished.

Pursuant to s 85(2) of the Act, on 3 June 2008, the Council referred the matter to an Inquiry Committee (“IC”), which recommended a formal investigation by a Disciplinary Tribunal (“DT”) pursuant to s 89(1) of the Act.

The Charges Charges against Zulkifli

A total of 211 charges were brought against Zulkifli for various breaches of the SAR. The 1st to 208th charges concerned the making of unauthorized withdrawals from the Firm’s client account in breach of rule 7(1)(a) of the SAR, which states:

There may be drawn from a client account — (a) in the case of client’s money — (i) money properly required for a payment to or on behalf of the client; (ii) money properly required in full or partial reimbursement of money expended by the solicitor on behalf of the client; (iii) money drawn on the client’s authority; (iv) money properly required for or towards payment of the solicitor’s costs where a bill of costs or other written intimation of the amount of the costs incurred has been delivered to the client and the client has been notified that money held for him will be applied towards or in satisfaction of such costs; and (v) money to be transferred to another client account.

The 209th charge concerned his failure to ensure that the Firm’s client account was not overdrawn on 19 November 2007 pursuant to rule 7(2) of the SAR, which provides as follows:

In the case of client’s money and trust money referred to in paragraph (1)(a) and (b), the money so drawn shall not exceed the total of the money held for the time being in the client account on account of the client or trust.

The 210th charge concerned his failure to record all transactions concerning the Firm’s client account in a ledger required to be maintained under rule 11(1) and (2) of the SAR, which reads: (1) Every solicitor shall at all times keep properly written up in the English language such cash books, ledgers and journals and such other books and accounts as may be necessary — (a) to show all his dealings with — (i) client’s money received, held or paid by him; and (ii) any other money dealt with by him through a client account; (b) to show separately in respect of each client all money of the categories specified in sub-paragraph (a) which is received, held or paid by him on account of that client and (c) to distinguish all money of the categories mentioned in sub-paragraph (b) received, held or paid by him, from any other money received, held or paid by him. (2) All dealings referred to in paragraph (1)(a) shall be recorded as may be appropriate — (a) in a client’s cash book or a client’s column of a cash book or (b) in a record of sums transferred from the ledger account of one client to that of another,

and in addition — (i) in a client’s ledger or a client’s column of a ledger; and (ii) in a journal.

Finally, the 211th charge concerned his failure to cause the balance shown in the clients’ cash books to be reconciled with the monthly bank statements of the Firm’s client account under rule 11(4) of the SAR, which states:

Every solicitor shall within one month of his commencing practice on...