Guan Ming Hardware & Engineering Pte Ltd v Chong Yeo & Partners and Another

JurisdictionSingapore
Judgment Date26 May 1997
Date26 May 1997
Docket NumberCivil Appeal No 111 of 1996
CourtCourt of Appeal (Singapore)
Chong Yeo and Partners and another
Plaintiff
and
Guan Ming Hardware and Engineering Pte Ltd
Defendant

[1997] SGCA 63

Yong Pung How CJ

,

M Karthigesu JA

and

L P Thean JA

Civil Appeal No 111 of 1996

Court of Appeal

Tort–Negligence–Defences–Immunity of counsel–Whether advocates and solicitors entitled to immunity recognised inRondel v Worsley–Tort–Negligence–Duty of care–Advocate and solicitor–Delay in summary judgment application due to counsel's default so that debtors wound up before judgment could be executed–Whether counsel owed a duty of care in these circumstances–Whether delay amounted to breach of duty of care

The plaintiff/respondent was the client of the defendants/appellants, a law firm. The firm applied for summary judgment in the client's claim against a debtor under the recently amended The Rules of Court 1996 O 14. The firm failed to exhibit the documents in the affidavit filed in support of the application as required by the new O 14. The application for summary judgment was thus adjourned. By the time the summary judgment was obtained, a receiver had been appointed over the debtors and the company was eventually wound up. The client sued the firm for negligence on the basis that the firm in failing to exhibit documents in the O 14 application had breached its duty of care to the client causing them damage. The firm's defence was that there was no negligence either because it did not owe a duty to take care or it had not breached its duty or it had not caused any damage and it further argued that it possessed the immunity from suit recognised in Rondel v Worsley [1967] 3 All ER 993. The firm counterclaimed for its retainer fees. The judge found that the firm had been negligent in the O 14 application, but found against the client on all other issues. The judge also found that there was no immunity applicable in the circumstances. The firm appealed.

Held, allowing the appeal in part:

(1) The position in Singapore on the immunity of counsel from negligence actions on the basis of Rondel v Worsley was open so the judge below was free to determine the scope of the rule. In determining whether the principle should apply in Singapore, the public policy considerations might be categorised as: (a) overriding duties; (b) general privilege; and (c) abuse of process: at [40] and [42].

(2) In respect of the overriding duties, this encompassed consideration of the cab rank rule, the principle of independence of counsel, and the duties owed to the Court. The cab rank rule did not apply in Singapore but even if it did, it does not necessarily lead to the conclusion that counsel should be covered by immunity for negligence. If a barrister was under a duty to represent anyone who was able to afford his services, the restriction on the freedom to refuse a client could be dealt with by a restriction on the duty of care. The principle of the independence of counsel was related to the duty owed by counsel to the court. There was no reason why counsel should be torn between their duty to their client and to the court. The duties owed to the court and counsel's independence were higher duties which might excuse the breach of the duty owed to the client: at [42] to [45].

(3) The argument that if counsel were liable for negligence, they would engage in defensive litigation by being prolix and pursuing unnecessary arguments was also adequately controlled by imposing hearing fees, case-management by the courts, intervention by judges and award of costs: at [47].

(4) In respect of the general privilege conferred on participants in a trial which exempted them from actions in defamation, this did not grant immunity from negligence but merely protected freedom of speech. It was therefore irrelevant to this suit: at [49].

(5) In respect of the question of abuse of process, this concerned mainly the fear of re-litigation of issues settled in the earlier hearing when counsel were sued subsequently for negligence. However the difficulties with re-litigation were not insurmountable. The fear was also strongest only in the context of criminal trials where it was necessary to ensure that criminal convictions were challenged in the proper forum as part of the criminal trial process. Many of the problems highlighted in the English cases would not be faced in Singapore as juries were no longer in use here. Any difficulties that did remain act as a deterrent against frivolous suits by disgruntled litigants and militate strongly against trigger-happy tendencies. In any case no such considerations applied to a claim of negligence in the conduct of civil matters: at [51] to [53].

(6) Therefore, the public policy considerations that led to theRondel v Worsley immunity did not apply in Singapore. A claim in negligence against an advocate and solicitor in respect of the conduct of proceedings in court was not barred save where that claim was against the conduct of a criminal case. In such a case, the bar to the suit arose not because of an immunity granted to the advocate and solicitor but because the suit would be an abuse of the court process: at [55].

(7) The only duty of care owed by the firm was the general duty to conduct proceedings with due diligence and speed and not to cause any delays [at 56]. The firm did not owe a duty to guard against the winding up or appointment of receiver over the debtor as there was not a sufficiently proximate relationship between the parties to justify the imposition of such a duty. Holding the firm to such a duty would impose too heavy a burden on advocates and solicitors accepting a normal retainer: at [56] and [60].

(8) The firm failed to exhibit the necessary documents as required by the new O 14 rules. This was clearly a breach of the duty of care they owed: at [74].

(9) The breach would normally only cause a delay in the client's recovery of the sums due to them. The winding up of the debtors was therefore a break in the chain of causation unless it was likely to occur. On the facts, it was questionable whether there was any likelihood, as opposed to a possibility, of the winding up occurring: at [75] and [76].

(10) The actual loss to the client was being out of pocket for the period of delay occasioned by the delay caused by the firm's breach. The sum to be recovered was therefore the loss of use of money: at [79]and [80].

(11) The firm's counterclaim for its retainer was granted as they managed to obtain judgment which would have returned a sum to the client if it were not for the winding up: at [81].

Caparo Industries plc v Dickman [1990] 2 AC 605; [1990] 1 All ER 568 (refd)

Carslogie Steamship Co Ld v Royal Norwegian Government [1952] AC 292 (refd)

Demarco v Ungaro (1979) 95 DLR (3d) 385 (refd)

Duchess of Argyll v Beuselinck [1972] 2 Lloyd's Rep 172 (refd)

Roger John Massie Dunlop v Woollahra Municipal Council [1981] 2 WLR 693 (refd)

Edward Wong Finance Co Ltd v Johnson Stokes & Master (a firm) [1984] AC 1296 (refd)

Faithfull v Kesteven (1910) 103 LT 56 (refd)

Giannarelli v Wraith (1988) 81 ALR 417 (folld)

Godefroy v Dalton (1830) 6 Bing 460; 130 ER 1357 (refd)

Hadley v Baxendale (1854) 9 Exch 341 (refd)

Harrington v Binns (1863) 3 F & F 942; 176 ER 429 (refd)

Kitchen v Royal Air Force Association [1958] 1 WLR 563; [1958] 2 All ER 241 (refd)

Koufos v C Czarnikow Ltd [1969] 1 AC 350 (refd)

Laidler v Elliot (1825) 3 B & C 738; 107 ER 907 (refd)

Lamb v Camden London Borough Council [1981] QB 625 (refd)

Levy v Spyers (1865) 1 F & F 5n; 175 ER 599 (refd)

Majid v Muthuswamy [1968-1970] SLR (R) 229; [1965-1968] SLR 325 (refd)

Oropesa, The [1943] P 32; [1943] 1 All ER 211 (refd)

Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty [1967] 1 AC 617 (refd)

Rees v Sinclair [1974] 1 NZLR 180 (refd)

Rondel v Worsley [1969] 1 AC 191; [1967] 3 All ER 993 (not folld)

RSP Architects Planners & Engineers v Ocean Front Pte Ltd [1995] 3 SLR (R) 653; [1996] 1 SLR 113 (folld)

Saif Ali v Sydney Mitchell & Co (a firm) [1980] AC 198 (folld)

Smith v Linskills (a firm) [1996] 1 WLR 763 (refd)

Somasundaram v M Julius Melchior & Co (a firm) [1988] 1 WLR 1394 (refd)

Wagon Mound, The [1961] AC 388 (refd)

Wai Wing Properties Pte Ltd v Lim, Ganesh & Liu [1994] 1 SLR (R) 1004; [1994] 3 SLR 101 (refd)

Bankruptcy Act (Cap 20,1996 Rev Ed)s 53 (1)

Companies Act (Cap 50,1994 Rev Ed)s 329

Rules of Court 1996,TheO 14r 2

Wong Meng Meng SC, Monica Chong and Nandakumar (Wong Partnership) for the appellants

Devinder Rai and Melvin Khoo (Harry Elias & Partners) for the respondent.

Judgment reserved.

Yong Pung How CJ

(delivering the judgment of the court):

1 This is an appeal against a decision of Christopher Lau JC finding that the appellants were negligent in the conduct of a matter for which they were retained by the respondents, and disallowing the appellants' claim for their retainer. After hearing arguments from both sides, the court took time for consideration. Judgment is now given.

The facts

2 In late 1991, the respondents were owed money by Argos Engineering Pte Ltd (“AE”) and Argos Steel Structure (S) Pte Ltd, which were, as their names show, related companies. Larry Lee (“Mr Lee”), the managing director of the respondents, decided to commence legal proceedings against the Argos companies and in October 1991, the respondents retained the appellants, the second appellant being the partner having conduct of the matter.

3 Although a number of allegations were made by the respondents below as regards the conduct by the appellants of the matters against both AE and Argos Steel, the present appeal is only concerned with the proceedings against AE, which owed the respondents $82,920.40. On or about 24 October 1991, the respondents received a cheque for $20,600.30 from AE in part payment of the money owed. There was a dispute in the court below about whether the appellants actually advised the...

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