Law Society of Singapore v Ang Chin Peng

• Jurisdiction: Singapore
• Judgment Date: 26 November 2012
• Date: 26 November 2012
• Docket Number: Originating Summons No 74 of 2012
• Court: High Court (Singapore)

Law Society of Singapore

Plaintiff

and

Ang Chin Peng and another

Defendant

[2012] SGHC 234

Chao Hick Tin JA

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Originating Summons No 74 of 2012

High Court

Legal Profession—Remuneration—Advocate and solicitor charging for work done on non-contentious matter based on oral agreements—Whether oral agreements valid—Whether solicitor might charge by way of percentage of value of subject matter without regard to time spent—Whether oral agreements provided absolute cover to invoice raised by solicitor—Section109 Legal Profession Act (Cap 161, 2009 Rev Ed)

Legal Profession—Professional conduct—Grossly improper conduct—Advocate and solicitor relying on oral fee agreements to render bills wholly out of proportion to work done—Whether conduct amounted to grossly improper conduct—Rule 38 Legal Profession (Professional Conduct) Rules (Cap 161, R 1, 2010 Rev Ed)

The first respondent (‘the 1st Respondent’) was an advocate and solicitor (for simplicity, hereinafter referred to as ‘Solicitor’) of 19 years' standing and the second respondent (‘the 2nd Respondent’) of 21 years' standing (together ‘the Respondents’). At all material times, the Respondents were partners of the firm Ang & Lee.

Mr Quek Seng Kee (‘QSK’) died testate on 24 November 1987, leaving behind an estate worth $3.7 m (‘the Quek Estate’). In 1990, the executors and trustees of the Quek Estate engaged the law firm, Laycock & Ong (‘Laycock’), to obtain the grant of probate for the Quek Estate. The 2nd Respondent, who was then a legal assistant at Laycock, worked on the file. In 1999, the Quek Estate file was transferred from Laycock to Ang & Lee where the Respondents were practising.

In relation to the question of fees which the Respondents could charge for their professional services, QSK's grandson, Mr Quek Tsiu Weng (‘the Complainant’), the Law Society, and the Disciplinary Tribunal (‘the DT’), all accepted that there was an oral agreement between the Respondents and the executors and trustees of the Quek Estate, fixing the fees for legal services at 5% of the gross value of the Quek Estate as at the date of the realisation of the assets.

On 21 October 2001, Mdm Leong Siew Fong (‘Leong’), QSK's wife and 35% beneficiary of the Quek Estate, passed away leaving behind the Leong Estate, consisting of Leong's beneficial interest in the Quek Estate. During a meeting between the Respondents and the executors and trustees of the Leong Estate, the Respondents proposed that the same fee arrangement as that for the Quek Estate be applied,ie, 5% of the gross value of the Leong Estate as at the date of the realisation of the assets.The executors and trustees of the Leong Estate were not agreeable as they felt that there would be considerable overlap between the work done for the two Estates. It was eventually agreed that the Respondents' fees for handling the Leong Estate would only be 3% of the gross value of the Leong Estate as at the date of the realisation of the assets.

On 2 September 2004, the same day the parties met to discuss the Respondents' fees for the Leong Estate, an invoice of $489,267.17 was issued by Ang & Lee for work done for the Quek Estate. On 7 March 2005 and 17 December 2007, two invoices for the work done on the Leong Estate were issued, amounting to the total sum of $150,640.

1. (a) Meanwhile, also in December 2007, the executors and trustees of the Leong Estate instructed Rajah & Tann LLP (‘R&T’) to take over the handling of the estate.On 20 February 2008, R&T wrote to the Respondents complaining that the fees charged by Ang&Lee for attending to the Leong Estate were grossly excessive, and inviting them to either set out their reasonable costs or have the bill taxed. Two days later, on 22 February 2008, the Respondents replied to R&T by letter, stating that ‘ [a]s legal costs had been agreed upon, the issue of re-negotiation of legal costs or taxation of our legal costs does not arise’. Subsequently, on 21 April 2009, Lee & Lee, who was by then acting for the Quek Estate, also wrote to the Respondents asking for taxation of the invoices for the Quek Estate.The Respondents replied on 24 July 2009, again declining the offer to tax the bill.

2. (b) On 23 December 2008, the Complainant lodged a complaint with the Law Society, alleging,inter alia,that both the Quek Estate and the Leong Estate had been grossly overcharged by the Respondents. An Inquiry Committee was convened on 29 June 2009 and it ruled that the complaint merited referral to the DT for further investigation and action. As the Respondents refused to agree to the taxation of their invoices issued against the two Estates, the executors and trustees of the Estates applied to the court for an order that the Respondents' respective invoices be taxed.Both applications were granted by the court. Pursuant to the orders of court, the Respondents filed their Bills of Costs for both the Quek Estate (Bill of Cost No 171 of 2010) (‘BC No 171’)and the Leong Estate (Bill of Cost No 172 of 2010) (‘BC No 172’) for taxation.Upon review of the costs taxed by the taxing Registrar, the amount of legal fees allowed by the reviewing Judge for BC No 171 was $120,000.00 and $50,000 for BCNo 172.

On 30 December 2011, the Disciplinary Tribunal (‘the DT’) held, pursuant to s 93 (1) (c)of the LPA, that cause of sufficient gravity for disciplinary action existed against the Respondents under s 83 (2) (b)of the LPA. Specifically, the DT found that the Respondents were guilty of overcharging and that the level of overcharging amounted to grossly improper conduct in the discharge of the duty of a Solicitor.

Held, granting the application - imposing a three-month suspension against each of the Respondents:

(1) The purpose of requiring a signed written agreement under s 109 (4) of the LPA was not only to ensure clarity but certainty in such fee arrangements, in order to safeguard the interests of the client. To allow the formal requirements to be constructively satisfied by reference to a signature on a cheque and/or bills making reference to the fee arrangement would defeat the object of s 109 (4). However, there was nothing to suggest that an oral fee agreement was invalid, as the absence of formalities (viz, in writing and signature) went towards enforceability rather than validity. The court saw no reason why it should not have regard to the oral agreements, which existence was not in dispute, to assess if they in fact provided the Respondents with a defence against the charges brought against them: at [28] and [29].

(2) It was clear that under s 109 (3) of the LPA, there was nothing wrong with a Solicitor entering into an agreement on fees for work done on a non-contentious matter based on a percentage of the estate. Indeed the wording of s 109 (3) expressly contemplated such a fee arrangement. However, this should in no way be construed to mean that so long as the client agreed, a Solicitor could charge for any amount or at whatever percentage of the subject matter and that fee arrangement would still be in order. The over-riding consideration was that a Solicitor had to charge fairly for work done. Section 109 (3), read with s 109 (1) of the LPA, was purely facilitative and should not be read as sanctioning overcharging. In every instance, the Solicitor had to satisfy the test of fairness or reasonableness of the amount charged in relation to the services rendered: at [31], [32] and [34].

(3) The Respondents' arguments that they were givencarte blanche,by virtue of the fee agreements, to render a bill grossly disproportionate to the time spent on the matter, could not be sustained, as such an agreement was not sacrosanct but always subject to the test of reasonableness. Rule 2 (2) (c) of the Professional Conduct Rules (Cap 161, R 1, 2010 Rev Ed) (‘PCR’) stated that a Solicitor had an obligation ‘to act in the best interests of his client and to charge fairly for work done’. What was a ‘fair’ charge had to necessarily depend on all the circumstances of the case. Thus, the presence of a fee agreement did not end the inquiry: it was but one factor, together with the nature of work done, that ought to be taken into consideration in determining whether there was overcharging: at [41], [42], [46] and [48].

(4) The invoices billed to the two Estates were based solely on the fee agreements, and had absolutely no correlation to factors such as the complexity of the matter, time spent, number and importance of documents prepared or perused,etc. Indeed, the amounts charged by the Respondents to the Quek Estate and the Leong Estate were way over the amount of legal fees for work done eventually awarded after taxation. Neither did the Respondents make any effort to assess whether the quality of service rendered by them (viz,time spent, complexity of work, nature of documents involved,etc) was commensurate with the overall fee charged. In fact, the Respondents had, without reticence candidly admitted that the work done in relation to the two Estates was neither factually or legally complex.Moreover, there was no justification to charge more fees just because the value of the assets of an estate had gone up. In our opinion, there was clearly gross overcharging by the Respondents: at [51] and [52].

(5) The total fees charged by the Respondents for the two Estates were three to four times more than the total amount eventually awarded after taxation. In absolute figures, the total difference was around $400,000. Such a huge difference in the figures could only be regarded as egregious and could hardly be justified. The Respondents also never once raised the option of taxation to the clients, and continued to adamantly refuse to tax the invoice even after the new solicitors for the two estates had written to the Respondents asking for taxation of the same. When made to undergo taxation pursuant to an order of court, the Respondents...