Anwar Patrick Adrian and another v Ng Chong & Hue LLC and another

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 14 November 2014
• Neutral Citation: [2014] SGHC 234
• Court: High Court (Singapore)
• Docket Number: Suit No 455 of 2012
• Year: 2014
• Published date: 17 May 2016
• Hearing Date: 07 October 2014,04 August 2014,25 August 2014,22 September 2014
• Plaintiff Counsel: Tan Cheng Han SC (instructed), Balachandran s/o Ponnampalam and Luo Ling Hui (Robert Wang & Woo LLP)
• Defendant Counsel: Michael Khoo SC, Andy Chiok and Kelvin Ho (Michael Khoo & Partners)
• Subject Matter: Damages,Quantum
• Citation: [2014] SGHC 234

Choo Han Teck J:

The facts of this case have been set out in my judgment in [2013] SGHC 202 and also in the Court of Appeal (“CA”) judgment in the same case in [2014] 3 SLR 761. For the purposes of following this judgment, the story, briefly, is as follows. Agus Anwar (“Anwar”), a businessman purchased several properties in Devonshire Road and Scotts Road. Some of those properties were purchased in the names of the plaintiffs who are his two young sons, one of whom was still a student in America at the time, and the other had just started work. On 16 October 2008, Society Generale Bank & Trust (referred to as “SGBT” by the CA) demanded payment of about US$17m due by Anwar to it.

Anwar began negotiating with SGBT through the second defendant, Ng Soon Kai. The second defendant is a lawyer practising under the name of the 1st defendant, Ng Chong & Hue LLC. Allen & Gledhill LLP (“A & G”) acted for SGBT and negotiations took place with Anwar taking an active part, sometimes contacting A & G directly, and sometimes with SGBT directly. Anwar informed SGBT that one of the Devonshire Road properties was being held by him in trust for a third party. Anwar, however, agreed to mortgage the remaining properties as further security to stay SGBT’s hand. In addition to the properties, SGBT also asked for personal guarantees to be executed in its favour by the plaintiffs. Anwar secured SGBT’s consent to waive the requirement for the plaintiffs’ personal guarantees. Anwar declared to SGBT that “the guarantees from the two young boys are not going to be worth anything”.

In the event, Anwar was unable to pay his debt to SGBT and in exercise of its rights, SGBT realised the security in the form of the properties. However, under the security (mortgage) documents the plaintiffs as owners were obliged to give their personal guarantees. They were thus called upon under their guarantees to pay the balance due. The second defendant continued acting as the solicitor for Anwar and the plaintiffs. SGBT then sued Anwar, his companies, and Anwar’s two sons (who are the second and third plaintiffs in Suit No 365 of 2009). In the end, SGBT agreed to settle the suit against the plaintiffs if they paid US$1m by a certain date. This was done. The plaintiffs then commenced this suit against the defendants claiming that the second defendant was in breach of his duty of care as the solicitor acting for them in the mortgage transaction in that he failed to advise them that the personal guarantee waived by SGBT is now reinstated in the mortgage documents. In this suit the plaintiffs claimed payment of the US$1m they paid under the settlement with SGBT, and legal costs amounting to $325,287.71.

I found that the defendants did not owe the plaintiffs a duty of care on the ground that the second defendant was acting for Anwar only, and that the two sons were only nominees of Anwar. I found that the second defendant was acting as the lawyer for Anwar only. On appeal, the CA held that the absence of any contractual connection between the plaintiffs and the defendants did not prevent a duty of care in tort from arising in respect of the defendants to the plaintiffs, if the second defendant knew that the plaintiffs would rely on his advice.

What was this advice? The plaintiffs ought to have been advised that if the loans were not repaid, the properties in their names would be forfeited by SGBT because the personal guarantee clause was part of the terms of conditions in the mortgage documents executed by the plaintiffs. Was this advice necessary? At the trial I found that this advice was not necessary because it was evident from that Anwar was an experienced businessman and must know that this would be the case. I disbelieved him when he testified that he could not...