Alfons Tanumihardja v Thio Su Mien and Others

JurisdictionSingapore
JudgeChoo Han Teck J
Judgment Date11 March 2005
Neutral Citation[2005] SGHC 54
Docket NumberSuit No 638 of 2003
Date11 March 2005
Year2005
Published date18 March 2005
Plaintiff CounselDanny Chua and K Murali Pany (Joseph Tan Jude Benny)
Citation[2005] SGHC 54
Defendant CounselC R Rajah SC, Imran H Khwaja and Christine Lee (Tan Rajah and Cheah)
CourtHigh Court (Singapore)
Subject MatterWhether two related actions can be distinguished so defendant solicitors can act for plaintiff in one action and not the other,Whether solicitor having implied duty to client in absence of express instructions,Whether relationship terminated when plaintiff consulted independent legal advice due to conflict of interest,Client,Negligence,Whether solicitor from firm subsequently acting against former client can advise such former client,Whether solicitor having duty to state in covering note that file would be closed after payment of final bill,Whether plaintiff's loss caused by defendants,Solicitor-client relationship,Tort,Breach of duty,Conflict of interest,Whether plaintiff can instruct different solicitors in respect of each action,Whether solicitor closed client's file,Causation,Whether defendants breaching any duty to plaintiff,Duties,Legal Profession

11 March 2005

Choo Han Teck J:

1 At the heart of this negligence suit by the plaintiff, Alfons Tanumihardja, against his former solicitors, is the judgment entered against him in Suit No 1191 of 2002. Suit No 1191 of 2002 was commenced on 9 October 2002 by RHB Bank Bhd (“RHB Bank”) against Multico-Orchids (S) Pte Ltd (“Multico”) as the first defendant, and Alfons Tanumihardja as the second defendant. The claim was for $2,780,108.09 in principal credit advanced under a facilities letter from RHB Bank to Multico dated 17 January 1998. The total claim, inclusive of interest and legal fees, came to $6,098,625.86. The plaintiff was sued as a guarantor under a letter of guarantee dated 12 October 1990 (“the Guarantee”). On 14 March 2003, RHB Bank obtained summary judgment for the sum of $6,098,625.86 against the plaintiff, who did not resist the summary judgment application because his present solicitors advised him that he had no defence to the claim.

2 The plaintiff brought this present action against the defendants who were his solicitors in 1990 when he executed the Guarantee. The Guarantee was given to RHB Bank, known at that time as the United Malayan Banking Corporation Bhd (“UMBC Bank”). At that time, the plaintiff was a director of Multico and its related group of companies. The main shareholders of those companies were, according to the plaintiff, one William Soeryadjaya, and Theodore Rachmat, an old classmate and friend of the plaintiff (collectively “the other parties”). Eventually, a dispute arose between the plaintiff and the other parties, culminating in civil proceedings brought by the plaintiff in Suit No 1401 of 1992 and Originating Petition No 45 of 1992, against Shonan Shoji Pte Ltd, a company in which the other parties had an interest. The dispute was resolved by a deed of settlement dated 26 August 1993 (“the Settlement Deed”) executed by the plaintiff, and Tradexim Ltd (“Tradexim”), as agent for the other parties. The defendants acted as solicitors for the plaintiff in that dispute, and helped him in the advice and drafting of the Settlement Deed. The solicitor in charge was the 23rd defendant, Christopher Chuah. Another partner, Leena Sankaran, who is the ninth defendant, was involved in the drafting of the Settlement Deed.

3 By the Settlement Deed, the suit and originating petition were withdrawn, and various other obligations had to be performed by the plaintiff. It was not disputed that all those obligations had been performed. In consideration of all that, the other parties agreed to pay the plaintiff a sum of $1,173,000 in five instalments. The first was to be paid within 14 days of the signing of the agreement, and the balance in four annual instalments. Furthermore, cl 7 of the Settlement Deed provided that Tradexim “shall procure the release of [the plaintiff] from [the Guarantee] given by him to [UMBC Bank] … within one (1) year after the fulfilment [of the obligations by the plaintiff]”. The plaintiff averred that he fulfilled his obligations in August/September 1994 whereas the defendants averred that it was on 15 November 1994. This was not made an issue of contention because both sides agreed that it did not matter when the obligations were fulfilled. It followed that there was no dispute that Tradexim was to procure the release of the Guarantee within a year from either August 1994 at the earliest or 15 November 1994 at the latest.

4 Nothing more took place between the plaintiff and the parties represented by Tradexim thereafter, and the former collected all the payments due to him under the Settlement Deed, the last being made in 1997. In the meantime, Christopher Chuah and Leena Sankaran had rendered their respective final bills and closed their files in respect of this matter. The relevant file (Christopher Chuah’s) was closed on 1 October 1996. On 21 June 2000, the plaintiff received a letter of demand from RHB Bank through the defendants, now acting on behalf of RHB Bank, but a different solicitor, Tony Yeo, was in charge of this claim. RHB Bank’s demand was for a sum of $5,139,307.12 due under the loan facilities to Multico, and which, it was alleged, the plaintiff had guaranteed.

5 The plaintiff contacted Christopher Chuah on the same day. In his testimony in court, the plaintiff appeared outraged that the lawyers whom he had instructed to get him released from the Guarantee became the ones who were suing him on it. Christopher Chuah testified that he immediately realised that the defendants were in a position of conflict of interest. Therefore, he advised the plaintiff that he had to seek independent legal advice. At this juncture, there were disagreements regarding the nature of the discussion between the plaintiff and Christopher Chuah. The former alleged that he was not advised that he had a claim against the parties represented by Tradexim (which were referred to at trial as “the Releasees”) for not procuring his release from the Guarantee. He alleged that Christopher Chuah only referred him to an independent lawyer in respect of defending RHB Bank’s claim against him, but he, the plaintiff, was still looking to Christopher Chuah to advise and act for him in respect of any claim against Tradexim and its principals in regard to their breach of the Settlement Deed, namely, their failure to procure his release from the Guarantee. Christopher Chuah’s version was that he called Peter Chow of M/s Wee Swee Teow & Co immediately to enquire, after briefly explaining the background facts, if he could act for the plaintiff. Peter Chow called back shortly and said that he could. He then met the plaintiff about the same day. It was not known what actually transpired at that meeting because Peter Chow was not called to testify. The plaintiff alleged that the meeting was a short one and nothing concerning his rights against Tradexim and its principals were discussed.

6 It will be helpful to note at this point, that RHB Bank did not commence action after its letter of demand of 21 June 2000, until 9 October 2002. By that time, the defendants had also ceased to act for RHB Bank. RHB Bank’s action was subsequently taken over by its new solicitors, M/s Shook Lin & Bok. The plaintiff, who was then unrepresented, filed his own Defence on 8 January 2003. He instructed his present solicitors shortly after that, and as mentioned, consented to judgment by RHB Bank on 14 March 2003. The plaintiff’s claim against the defendants was premised on the fact that he could no longer seek recovery from Tradexim and its principals (for the judgment sum he owed to RHB Bank) because his rights against them had become time-barred, and he blamed that situation on the defendants’ negligence.

7 In this context, which is, in my view, the key one, the allegations of negligence were that Christopher Chuah failed to advise the plaintiff of his rights against Tradexim and its principals. This would have included an advice that his rights would soon be time-barred. That would be an undeniable duty had Christopher Chuah been the plaintiff’s lawyer. But was he? That was the question. Christopher Chuah testified that he had closed his file in respect of the plaintiff’s matter on 1 October 1996. The plaintiff disputed this on the basis that the covering letter merely presented the solicitors’ bill but did not mention that they were closing the file. Furthermore, Mr Danny Chua, counsel for the plaintiff, submitted that the work was not completed because there was one more instalment payment to collect. This was not disputed, but Christopher...

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1 cases
  • Toh Wai Sie and another v Ranjendran s/o G Selamuthu
    • Singapore
    • High Court (Singapore)
    • 10 February 2012
    ...to what the career advancement would be in the absence of any evidence from her employers. The case of Lee Teck Nam v Kay Hock Seng Paul [2005] SGHC 54 (“Lee Teck Nam”) cited by the plaintiffs for the proposition that the claim for future increments and promotion opportunity properly falls ......
2 books & journal articles
  • Tort Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2005, December 2005
    • 1 December 2005
    ...before the formal professional-client relationship commenced. The reverse, as it were, was at issue in Alfons Tanumihardja v Thio Su Mien[2005] 2 SLR 445, where the allegation was that a duty of care continued to be owed even after the defendant solicitors had closed the plaintiff client”s ......
  • Legal Profession
    • Singapore
    • Singapore Academy of Law Annual Review No. 2005, December 2005
    • 1 December 2005
    ...of the stringency with which the courts scrutinise such agreements. Conflict of interests 18.2 In Alfons Tanumihardja v Thio Su Mien[2005] 2 SLR 445, the defendant firm of advocates and solicitors represented the RHB Bank which was suing the plaintiff on a guarantee he had provided in 1996 ......

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