Law Society of Singapore v Tham Kok Leong Thomas

• Judge: Chao Hick Tin JA
• Judgment Date: 23 December 2005
• Neutral Citation: [2005] SGHC 231
• Citation: [2005] SGHC 231
• Defendant Counsel: Chelva R Rajah, SC (Tan Rajah and Cheah), Lai Swee Fung and G Dinagaran (Unilegal LLC)
• Published date: 27 December 2005
• Plaintiff Counsel: Bernard Doray and Foo Soon Yien (Bernard Rada and Lee Law Corporation)
• Date: 23 December 2005
• Docket Number: Originating Summons No 1312 of (Notice of Motion No 84 of 2005)
• Court: High Court (Singapore)
• Subject Matter: Whether advocate and solicitor breaching undertaking as stakeholder by prematurely releasing monies to client,Appropriate penalty,Sections 83(1), 83(2)(b), 83(2)(h)Legal Profession Act (Cap 161, 2001 Rev Ed),Legal Profession,Advocate and solicitor making misleading statements that stakeholder sums still intact,Whether solicitor's conduct amounting to grossly improper conduct or conduct unbefitting an advocate and solicitor,Show cause action

23 December 2005

Tay Yong Kwang J (delivering the judgment of the court):

1 This was an application under s 98(5) of the Legal Profession Act (Cap 161, 2001 Rev Ed) (“LPA”) taken out by the Law Society of Singapore (“the Law Society”) to make absolute an order to show cause against the respondent. These proceedings relate to two charges alleging grossly improper conduct on the part of the respondent in respect of his conduct as a stakeholder in circumstances which we now relate.

The facts giving rise to the two charges

2 The respondent was admitted as an advocate and solicitor in 1974. He has been practising as M/s Thomas Tham & Co (“the law firm”). Dr Sam Lin Wang (“Dr Wang”) was one of his clients, representing two companies known as Golden Gate Technologies (S) Pte Ltd (“the Singapore Company”) and Golden Gate International Group Pte Ltd (“the Foreign Company”). The complainant was Sanchai Taevivat (“Taevivat”), a Thai businessman who is in the business of the import and sale of cars in Bangkok. SLS Karl Pte Ltd (“SLS”) is a Singapore company from which Taevivat purchased cars. Jerry Lum was the sales manager of SLS.

3 In the late 1990s, Taevivat had difficulty obtaining banking facilities to import cars into Thailand. He found out through some friends that someone in Singapore was able to assist in opening letters of credit for a fee.

4 In the morning of 19 April 2001, Taevivat was in Singapore. He went with Jerry Lum of SLS and three Thai associates to meet Dr Wang at the latter’s office here. Taevivat needed a letter of credit for US$500,000 in favour of SLS by 26 April 2001 so that new Mercedes Benz cars of that value could be imported into Thailand. Dr Wang wanted Taevivat to deposit US$60,000 with him in return for opening the letter of credit. Taevivat did not agree with this arrangement. He suggested giving a banker’s guarantee instead. Dr Wang then suggested that Taevivat deposit the said amount of money with his (Dr Wang’s) lawyer and that the same lawyer draw up the agreement between the parties.

5 Dr Wang then called the respondent. After the respondent arrived in Dr Wang’s office, the issue of the deposit and the prospect of him acting as a stakeholder of the money were discussed in his presence. After a while, the respondent returned to his office.

6 In the afternoon, Dr Wang, Taevivat and Jerry Lum went to the respondent’s law office where the respondent prepared three documents. The first of these was an agreement between the Foreign Company (it should have been the Singapore Company) and SLS whereby the Foreign Company agreed to issue a letter of credit in favour of SLS. Besides setting out the requirements of the letter of credit, cl 2 of this agreement provided:

In consideration of [the Foreign Company] issuing the said Commercial Letter of Credit herein, [SLS] shall place a sum of US$60,000/- (United States Dollars Sixty Thousand) as fees which sum shall be held by M/s Thomas Tham & Company of No: 81 Kampong Bahru Road, Singapore 169378, and shall be released to [the Foreign Company] when the said Letter of Credit is issued not later than 26th April 2001. This Letter of Credit shall be verified and authenticated by the Adivisng [sic] Bank.

This agreement was signed the same day (19 April 2001). The signing by the authorised signatory of the Foreign Company was witnessed by someone from the law firm (said to be the respondent’s secretary) with a round stamp of the law firm affixed over the witness’s signature.

7 The second document was an “Acknowledgement Receipt” of the same date in the following terms:

We Thomas Tham & Company hereby acknowledge receipt of the sum of United States Dollars Sixty Thousand Only (US$60,000.00) from [Taevivat] … pursuant to an Agreement dated the 19th day of April 2001 made between [the Foreign Company] of the one part and [SLS] of the other part.

This was printed on the law firm’s letterhead and was signed and stamped with the law firm’s stamp. It was not in dispute that the amount of US$60,000 in cash was deposited with the law firm that day.

8 The third document prepared and signed that day was a “Letter of Undertaking” whereby Taevivat confirmed that he had requested Dr Wang to issue the said letter of credit and acknowledged that he (Taevivat) would be indebted to Dr Wang in the amount of US$500,000 when the letter of credit was utilised and be personally liable to pay the said amount to Dr Wang on or before 26 October 2001. The signing of this document did not appear to have been witnessed by anyone from the law firm.

9 After the said deposit was placed with the respondent, Dr Wang requested the respondent that very same day to release US$54,000 to him so that he could pay his bankers. Initially, the respondent was not willing to do so. He finally relented on the condition that Dr Wang give him a personal cheque for US$54,000 and sign an indemnity in favour of the law firm. Dr Wang then handed over a personal cheque from Standard Chartered Bank dated 19 April 2001 for the said amount, payable to the law firm. He also signed an “Acknowledgement Receipt” dated the same day whereby he acknowledged receipt of the same amount “pursuant to an Agreement dated the 19th day of April 2001 made between [the Foreign Company] of the one part and [SLS] of the other part”. In this document, Dr Wang also undertook to immediately refund the said amount to the law firm in the event that he was unable to issue the aforesaid letter of credit.

10 After signing the above documents, Taevivat and Jerry Lum arranged to meet a solicitor from the law firm of M/s Tang & Tan. It came to light that the Foreign Company named in the documents was not registered in Singapore. Taevivat and Jerry Lum then retained the said solicitor to represent them in the further conduct of the matter.

11 An exchange of correspondence took place between Tang & Tan and the law firm. Tang & Tan’s letter to the law firm dated 21 April 2001, after referring to a telephone conversation with the respondent and stating that the Foreign Company’s name could not be traced in the records of the Registry of Companies, went on to state:

In the premises, we have requested your Mr. Thomas Tham not to release the sum of US$60,000.00 to anyone until we take further instructions from our client and revert to you.

Please let us have your written confirmation that you will hold the aforesaid sum in your client’s account until the matter is resolved.

The law firm replied on 23 April 2001 stating:

We confirm that we will hold the aforesaid deposit of US$60,000/- and according to the Agreement that our clients signed with [SLS], this sum shall be released when the Letter of Credit is issued …

It also explained that there was a typographical error as to the contracting party in the agreement and that the name of the Foreign Company should be substituted with the name of the Singapore Company.

12 On 27 April 2001, Tang & Tan wrote to the respondent to “[p]lease let us have your confirmation that you are still holding the US$60,000.00 as stakeholders and will not release the sum to anyone until the matter is resolved”. Further letters were exchanged between the solicitors but the confirmation sought was not provided by the respondent. On 30 April 2001, Tang & Tan wrote to remind the respondent about the request and to seek his confirmation that the said sum of money had been deposited into the respondent’s client’s account. The law firm replied the same day stating that the respondent was abroad and would revert the following week.

13 On 9 May 2001, the law firm replied, asking whether the letter of credit had been verified and authenticated and “[i]f so, please confirm that we may release the US$60,000.00 to our clients”. On 10 May 2001, Tang & Tan wrote to the respondent noting that their request for confirmation about the US$60,000 was still not met and claiming that the respondent’s clients were in breach of the agreement of 19 April 2001. A demand was also made for the return of the said sum by 11.00am the next day. By its letter of 11 May 2001, the law firm replied, stating, among other things:

We confirm that we are still holding the said sum pending the outcome between our respective clients on this matter.

…

We are instructed to retain the said sum of US$60,000/- until the matter is resolved between our respective clients.

14 On 20 June 2001, the remaining US$6,000 was released by the respondent to Dr Wang. As with the earlier release of the US$54,000, Dr Wang also gave the respondent a cheque (of the Singapore company) for US$6,000 dated 20 June 2001 and an acknowledgement of receipt in terms similar to those of the first.

The charges against the respondent before the disciplinary committee

15 The charges formulated by the Law Society at the disciplinary committee hearing were:

FIRST CHARGE

That THOMAS THAM KOK LEONG is guilty of such misconduct unbefitting an advocate and solicitor or as a member of an honourable profession within the meaning of Section 83(2)(h) of the Legal Profession Act (Chapter 161) in that on 19 April 2001 or any time thereafter, in breach of Rule 3 of the Legal Profession Act (Solicitor’s Account) Rules, he failed and/or neglected to pay client’s monies of cash US$60,000 into a client’s account of Thomas Tham & Company.

SECOND CHARGE

That THOMAS THAM KOK LEONG is guilty of grossly improper conduct in the discharge of his professional duty within the meaning of Section 83(2)(b) of the Legal Profession Act (Chapter 161) in that he on 19 April 2001 and 20 June 2001, despite his undertaking or duty to hold US$60,000 cash as stakeholder, did breach his undertaking or duty as stakeholder when he released US$54,000 and US$6,000 respectively to one Sam Lin Wang in exchange for two (2) cheques for the same amounts which were not banked in.

ALTERNATIVE SECOND CHARGE

That THOMAS THAM KOK LEONG is guilty of such misconduct unbefitting an advocate and solicitor or as a member of...