Koh Kim Teck v Shook Lin & Bok LLP

• Court: Court of Three Judges (Singapore)
• Judge: Sundaresh Menon CJ
• Judgment Date: 10 December 2020
• Neutral Citation: [2020] SGCA 118
• Citation: [2020] SGCA 118
• Hearing Date: 26 October 2020
• Docket Number: Civil Appeal No 25 of 2020
• Published date: 15 December 2020
• Plaintiff Counsel: Derek Kang Yu Hsien and Ashok Kumar Rai (Cairnhill Law LLC)
• Defendant Counsel: Jamal Siddique Peer, Leong Woon Ho and Liew Zhi Hao (Shook Lin & Bok LLP)
• Subject Matter: Insolvency Law,Bankruptcy,Statutory demand,Application to set aside

Woo Bih Li J (delivering the judgment of the court):

The appellant, Mr Koh Kim Teck, appeals against the High Court judge’s dismissal of his application (“the Application”) to set aside a statutory demand dated 30 September 2019 (“the SD”) served on him by the respondent, Shook Lin & Bok LLP. The decision of the High Court judge (“the Judge”) can be found in Koh Kim Teck v Shook Lin & Bok LLP [2020] SGHC 86 (“the GD”) and was made following a similar dismissal of the Application by an Assistant Registrar (“AR”) in HC/OSB 129/2019 (“OSB 129”).

The Application was brought firstly on the basis that the SD was not validly served. There are two potential dates on which the SD might have been validly served: 4 October 2019 and 22 October 2019. In the event we find, as the Judge did below, that the SD was validly served on 4 October 2019, the appellant seeks the requisite extension of time to bring the Application as it was filed only on 31 October 2019, ie, more than 14 days after 4 October 2019. The appellant then contends that the SD should be set aside because the quantum of the debt is disputed; that he has a cross-demand that exceeds the debt under the SD; and that there was an implied term which disentitles the respondent from payment in the present case.

Background facts The 26 October 2017 invoice

A chronology of the relevant events can be found in Annex A. The respondent acted for the appellant in two suits heard in the High Court (“the Consolidated Suits”) from May 2013 to 22 January 2018.¹ The SD is premised on Invoice No 150722, issued by the respondent on 26 October 2017² (“the 26 October 2017 invoice”). This invoice was for a sum of $269,066.57, billed for the work done by the respondent between 18 February 2017 and 31 July 2017.³ However, the debt as stated in the SD was $106,133.52 (inclusive of interest)⁴ as an aggregate sum of $176,025.30,⁵ held on account for the appellant in the respondent’s client account, was set off against the sum originally claimed under the 26 October 2017 invoice at the time it was issued.

The parties spoke about the 26 October 2017 invoice over the phone on 11 December 2017, during which the appellant sought a discount of 50%.⁶ Over lunch on 3 January 2018, the respondent informed the appellant that if he disputed any part of the 26 October 2017 invoice, he was entitled to approach the court to have this taxed. The appellant stated that he would have to consider whether to continue to engage the respondent to act for him.⁷ The respondent sent a follow-up electronic mail (“email”) on 9 January 2018, and again on 17 January 2018,⁸ seeking the appellant’s confirmation as to whether he intended to continue engaging the respondent. On 19 January 2018, the appellant confirmed that he wished to continue doing so but the respondent inquired about payment of the 26 October 2017 invoice.⁹ On 22 January 2018, the respondent was informed by Optimus Chambers LLC (“Optimus Chambers”) that it had been instructed to take over the continuing trial of the Consolidated Suits.¹⁰

On 27 March 2018, the respondent wrote to Optimus Chambers, enclosing the 26 October 2017 invoice and another invoice, ie, Invoice No 152152 dated 13 March 2018 (“the 13 March 2018 invoice”) for work done in the Consolidated Suits between 1 August 2017 to 22 January 2018.¹¹ The respondent informed Optimus Chambers that it would be setting off the sum of $176,008.04 held on account for the appellant against the unpaid invoices.¹² According to the respondent, Optimus Chambers suggested that the respondent speak to the appellant personally, and the respondent did so on 23 April 2018, informing the appellant that if he disputed any of the unpaid invoices, he was entitled to apply to the court to tax those invoices. On the other hand, the appellant suggested that the respondent communicate with Optimus Chambers.¹³ On 7 September 2018, the respondent again wrote to Optimus Chambers to state that the sum of $176,008.04 had been set off against the “total amount owing to [the respondent]”. The respondent reiterated that the appellant was entitled to proceed to taxation if he disputed any part of its professional charges. At that time, no distinction was drawn between the two invoices for the purpose of set-off.¹⁴

Statutory demands and service

The respondent then issued three statutory demands in relation to the 26 October 2017 invoice. First, the respondent wrote to Optimus Chambers on 29 November 2018 enclosing a statutory demand also dated 29 November 2018 for the full amount claimed under the 26 October 2017 invoice and enquired if Optimus Chambers had instructions to accept service of that statutory demand on the appellant’s behalf (GD at [4]).¹⁵ This was because the set-off previously mentioned by the respondent had been effected against the sum claimed under the 13 March 2018 invoice.¹⁶ At that time, the appellant had not yet pursued taxation of either invoice.

On 15 January 2019, the appellant filed HC/OS 67/2019 (“OS 67/19”) seeking an order for taxation in respect of the 13 March 2018 invoice, as well as leave to seek an order for taxation in respect of the 26 October 2017 invoice given that the application was not made within the 12-month period prescribed by s 122 of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“LPA”). We note that for the 26 October 2017 invoice, the appellant did not require leave for an order for taxation so long as he satisfied the requirement of special circumstances under s 122 of the LPA. In the supporting affidavit filed for OS 67/19, the appellant stated that he had informed the respondent that there was no reason for it to have issued a statutory demand since the invoices were disputed and he was willing to have them taxed.¹⁷ No further steps were taken in respect of the statutory demand dated 29 November 2018.

Aedit Abdullah J, who heard OS 67/19, granted the order for taxation of the 13 March 2018 invoice but dismissed the application in relation to the 26 October 2017 invoice. No appeal was filed by the appellant against Abdullah J’s decision. Cairnhill Law LLC (“Cairnhill Law”), his current solicitors, were appointed in relation to the taxation proceedings on 20 August 2019 (see GD at [7]). The bill of costs for the 13 March 2018 invoice has since been taxed by an AR. According to the respondent, aside from Section 2 costs, 12.38% of the bill of costs relating to the 13 March 2018 invoice was taxed off.¹⁸ The appellant’s application for review of the taxation was dismissed by Abdullah J on 19 October 2020.¹⁹

Subsequently, a fresh statutory demand dated 10 May 2019 was issued by the respondent on the basis of the 26 October 2017 invoice. This was sent by registered post to a unit at 72 Bayshore Road, Costa Del Sol, Singapore 469988 (“the Bayshore Road property”). This address was referred to by the parties and the Judge as the appellant’s “last known address”. This statutory demand was returned uncollected. Thereafter, on 26 July 2019, the respondent attempted substituted service on the appellant by sending an email to him and LVM Law Chambers LLC, who were the appellant’s solicitors in the appeal against the decision in the Consolidated Suits (“the 26 July 2019 email”) which was given on 7 August 2018. LVM Law Chambers LLC went on record as the appellant’s solicitors in the appeal on 6 June 2019. The respondent had previously communicated with the appellant at the email address used.²⁰ No reply was received from the appellant and no further step was taken by the respondent in relation to this statutory demand.

The SD in the present appeal is dated 30 September 2019. It is for a net sum of $106,133.52 as by then the respondent had set off an aggregate sum of $176,025.30 from the original sum of $269,066.57 in the 26 October 2017 invoice instead of setting it off against the 13 March 2018 invoice. The net sum includes interest under para 5 of the Legal Profession (Solicitors’ Remuneration) Order (Cap 161, O 1, 2010 Rev Ed). The other invoice, ie, the 13 March 2018 invoice, was being taxed at that time. The respondent had asked Cairnhill Law on 18 September 2019 if it had instructions to accept personal service of process on behalf of the appellant, but apparently received no reply.²¹ The respondent then attempted to serve the SD on the appellant in the following ways: On 30 September 2019 and 1 October 2019, the respondent’s clerk attempted personal service at the Bayshore Road property, but on each occasion the door was locked. At the time these attempts were made, the respondent was aware that the appellant no longer owned the Bayshore Road property, which was instead owned by a third party. In contrast, the appellant had been the owner of the Bayshore Road property in March 2019, although a title search then had shown that the third party had already lodged a caveat as a purchaser. An Enhanced Individual Search on the appellant conducted on 29 October 2019 did not reveal any details of the appellant’s residential address.²² The appellant accepts that two unsuccessful attempts had been made at personal service.²³ Subsequently, on 4 October 2019, the respondent placed an advertisement (“the Advertisement”) in the Straits Times of a notice of the SD. The notice referred specifically to r 96(4)(d) of the Bankruptcy Rules (Cap 20, R1, 2006 Rev Ed) (“BR”), the 26 October 2017 invoice, and the sum of $106,133.52.²⁴ A copy of the notice advertised was also sent to Cairnhill Law by email on 4 October 2019 at 12.03pm (“the 4 October 2019 email”).²⁵ On 22 October 2019, Mr Ashok Kumar (“Mr Kumar”) from Cairnhill Law replied to the email. He referred to the notice of statutory demand and requested documents such as a breakdown of the time spent by the respondent’s solicitors “which was the subject of all the invoices” issued by the respondent to the appellant. The respondent declined to provide a breakdown and sent Mr Kumar a copy of...