JWR Pte Ltd v Edmond Pereira Law Corp and another

• Jurisdiction: Singapore
• Judge: Aedit Abdullah J
• Judgment Date: 12 November 2019
• Neutral Citation: [2019] SGHC 266
• Plaintiff Counsel: Syn Kok Kay (Patrick Chin, Syn & Co)
• Docket Number: Suit No 992 of 2015
• Date: 12 November 2019
• Hearing Date: 14 March 2019,12 March 2019,28 May 2019,13 March 2019
• Subject Matter: Breach of duty,Negligence,Breach,Contract,Tort
• Published date: 16 November 2019
• Defendant Counsel: Christopher Anand Daniel, Harjean Kaur and J Jayaletchmi (Advocatus Law LLP)
• Court: High Court (Singapore)
• Citation: [2019] SGHC 266
• Year: 2019

Aedit Abdullah J: Introduction

The plaintiff in these proceedings is a company controlled by Dr Chen Walter Roland (“Dr Chen”), its sole shareholder and director. The first defendant is a law corporation set up by the second defendant, a practising advocate and solicitor who serves as the former’s executive director.¹ The plaintiff commenced proceedings against the defendants for negligently providing advice and conducting proceedings in relation to a dispute that it was embroiled in previously. Following a three-day trial, I found that the plaintiff’s claims were not established. The plaintiff has since appealed against my decision.

Background

The present action arose out of a dispute the plaintiff had with certain third parties. Legal proceedings were commenced, with the first and second defendants representing the plaintiff. The plaintiff, however, was eventually unsuccessful in its claim against the third parties.

The underlying dispute as alleged by the plaintiff

The plaintiff, a wholesale medical product trade company, was incorporated in 2006.² In that year, one Lee Fichow Helen (“Lee”) proposed that Dr Chen be appointed the sole distributor of products (“Immunotec Products”) manufactured by Immunotec Incorporated, a Canadian company (“Immunotec Inc”).³ Lee represented to Dr Chen that she was a director of Immunotec Research (S) Pte Ltd (“IRS”), and was the sole distributor of Immunotec Products in Singapore. Acting on Lee’s representations, the plaintiff entered into an agreement with IRS in March 2006 whereby it was appointed as the sole distributor of Immunotec Products in Singapore.⁴

Sometime in July or August 2006, the plaintiff came to believe that there was another distributor of Immunotec Products in Singapore. Nonetheless, the plaintiff was assured by Lee that it was the sole distributor of Immunotec Products. At about this time, Lee also informed the Plaintiff that IRS could not continue to trade under its name, and was undergoing a name change to United Yield International Pte Ltd (“UYI”).⁵ This necessitated a new agreement being entered into with UYI, which was signed on 18 August 2006.⁶

Subsequently, the plaintiff discovered that certain representations made by Lee were false:⁷ IRS did not undergo a name change to UYI. Rather, they were both separate companies. There were other parallel importers in Singapore distributing Immunotec Products. The plaintiff had not been recognised by Immunotec Inc as the sole distributor of Immunotec Products in Singapore as Lee had not sought or obtained approval of this from Immunotec Inc. After this was raised to Lee, she caused UYI to send a notice of termination on 18 October 2006 purporting to terminate the distributorship agreement with the plaintiff.⁸

Legal advice obtained and proceedings conducted

Almost six years later, on 8 October 2012, Dr Chen met with the second defendant and informed him that the plaintiff wished to commence legal proceedings against Lee and UYI.⁹ On 13 October 2012, Dr Chen corresponded with the defendants, giving his views on the dispute.¹⁰ A letter was also sent on 15 October 2012 by Dr Chen to the defendants capturing these views and instructing the defendants to file a writ of summons against Lee and UYI as soon as possible.¹¹ On the same day (ie, 15 October 2012), the defendants advised the plaintiff by letter that proceedings against UYI would not be easy as it had been struck off the register of companies, and that the claim against Lee was unlikely to succeed as the agreement was between the plaintiff and UYI (“the 15 October Letter”).¹² Dr Chen replied to this on 16 October 2012 maintaining that Lee had been acting in her personal capacity.¹³

The Defendants sent a follow-up letter of advice by email and post on 16 October 2012 (“the 16 October Letter”), stating that:¹⁴ UYI and IRS had both been struck off; Lee had signed the distributorship agreements with the Plaintiff in her capacity as a director of UYI and IRS respectively; and piercing the corporate veil would require fraud and/or deceit. The defendants’ view was that there was insufficient evidence to succeed in a claim against Lee. Dr Chen, however, maintained that there was sufficient evidence.¹⁵

At a meeting with Dr Chen on the morning of 17 October 2012, the second defendant advised him of the difficulties in the plaintiff’s case, including the need to take urgent action in light of the impending time bar. UYI could not be included in any suit as it had been struck off. There was also insufficient evidence to substantiate the plaintiff’s claims. Dr Chen maintained that an action be commenced solely against Lee to keep the case alive.¹⁶

In the evening of 17 October 2012, the defendants commenced Suit 896 of 2012 (“Suit 896/2012”) against Lee for misrepresentation and breach of contract. ¹⁷

Subsequently, in April 2013, on Lee’s application in Summons No 1759 of 2013 (“Summons 1759/2013”), Suit 896/2012 was struck out. Lee relied on two grounds for striking out: (a) the plaintiff’s action was time-barred; and (b) the wrong party had been sued. The assistant registrar did not find that the suit was time-barred, but agreed that the wrong party had been sued. In relation to the plaintiff’s attempt to pierce the corporate veil against Lee, the assistant registrar was of the view that this was not sufficiently pleaded in the plaintiff’s statement of claim. While the assistant registrar would have been inclined to dismiss the application if there was evidence suggesting that the corporate veil could be pierced, no such evidence was included in the affidavit filed to resist the application. The plaintiff’s claim was thus struck out under O 18 r 19(b) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“ROC”) on the basis that it was factually unsustainable.¹⁸ No instructions to appeal were given by Dr Chen.

In a letter dated 8 July 2013, the plaintiff alleged that the defendants had been negligent in advising it on its claim against Lee, UYI and IRS. Numerous instances of alleged negligence were raised, which are elaborated on below (at [14]). The plaintiff claimed losses of about $115m. Unsurprisingly, these allegations were denied by the defendants.¹⁹

On 12 August 2013, the plaintiff sent a letter to the defendants reiterating its stance. It further threatened to lodge a complaint with the Law Society and commence a suit against the defendants for negligence if they refused to settle.²⁰ The defendants did not respond to the plaintiff’s letter directly and informed its insurers about the threat of legal action.²¹

On 8 July 2015, the plaintiff proposed mediation of its dispute with the defendants.²² The defendants failed to respond to the plaintiff’s offer. The plaintiff then commenced the present action on 29 September 2015.²³

Summary of the plaintiff’s case

The plaintiff’s claims against the defendants were grounded in both the tort of negligence and contract. The plaintiff raised numerous alleged instances of failure to exercise due care and skill on the part of the defendants which can be broadly summarised as follows:²⁴ The defendants failed to advise the plaintiff on the possibility of making an application under s 343 of the Companies Act (Cap 50, 2006 Rev Ed) (“CA”) to reinstate both UYI and IRS. This would allow a claim under s 340 CA for fraudulent trading to be brought against UYI and IRS to allow the imposition of personal liability on Lee. The defendants failed to conduct Suit 896/2012 properly by: commencing proceedings against the wrong party; not including sufficient reference in the pleadings filed for Suit 896/2012 to lifting of the corporate veil against Lee; and not including sufficient evidence in the pleadings and affidavit filed to resist Lee’s striking out application to support the plaintiff’s claims.

The effect of the defendants’ negligence was that the plaintiff’s claim in Suit 896/2012 was dismissed. Had the defendants not been negligent, the plaintiff was likely to succeed in its claim against Lee.²⁵

Summary of the defendants’ case

The defendants contended that the pleadings in Suit 896/2012 were drafted based on the plaintiff’s instructions.²⁶ The plaintiff was unlikely to succeed in an application under s 340 CA to impose personal liability on Lee.²⁷ In any event, the plaintiff would have been unable to make an application under s 343 CA to reinstate IRS and UYA in time; the defendants were first consulted by the plaintiff on 8 October 2012 and the time bar set in on 18 October 2012.²⁸ There was also insufficient evidence of the plaintiff having suffered any loss or that it would have succeeded in enforcing any judgment obtained in Suit 896/2012 against Lee had it prevailed.²⁹

The defendants also sought costs on an indemnity basis against the plaintiff on the basis that its claim was brought for an improper purpose, and that its conduct in the present proceedings was unreasonable.³⁰

The decision

I was not persuaded that the plaintiff’s claim was made out on the balance of probabilities. The claim was primarily founded on the duty of a solicitor to advise his or her client with due care, skill and diligence. The requisite standard of care is that of a reasonably competent and diligent solicitor and not one of a guarantee of success: Anwar Patrick Adrian v Ng Chong & Hue LLC [2014] 3 SLR 761 (“Anwar Patrick Adrian”) at [168].

I was satisfied based on the evidence, including the 16 October Letter, that instructions were obtained and complied with by the defendants. While Dr Chen disputed having read the letter on 16 October 2012, I was not persuaded that the 16 October Letter was not given at that time.

While this was not an emergency situation, I accepted that the standard of care expected of a solicitor would depend in part on any time or deadline pressures faced, such as the need to bring a claim before the setting in of a...