Law Society of Singapore v Fun Huay Yew

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 17 May 2005
• Neutral Citation: [2005] SGHC 96
• Date: 17 May 2005
• Subject Matter: Whether amounting to grossly improper conduct,Appropriate order to be made,Advocate and solicitor feigning payment of money to client and absconding with client's money,Show cause action,Legal Profession,Sections 83(2)(b), 98(5) Legal Profession Act (Cap 161, 2001 Rev Ed)
• Docket Number: Originating Summons No 414 of 2005
• Published date: 17 May 2005
• Defendant Counsel: The respondent absent
• Court: High Court (Singapore)
• Plaintiff Counsel: C R Rajah SC (Tan Rajah and Cheah) and Tan Beng Swee (Tan Beng Swee)

17 May 2005

Belinda Ang Saw Ean J (delivering the grounds of decision of the court):

1 This was an application brought by the Law Society of Singapore (“the Law Society”) under s 98(5) of the Legal Profession Act (Cap 161, 2001 Rev Ed) (“the Act”) to make absolute an order to show cause which Tay Yong Kwang J had made on 7 April 2005 against the respondent, Fun Huay Yew.

2 The respondent was called to the Singapore Bar in 1995. At all material times, he carried on practice as a sole proprietor under the style of M/s Fun Huay Yew & Co at 14 Mohamed Sultan Road, #02-02, Singapore 238963. His last known residential address was Block 5 Jurong East Street 32, #10-01, Singapore 609479. The affidavit of service confirmed that all necessary letters and cause papers were sent to both last known addresses. However, they were left unclaimed as the respondent had moved away. Pursuant to the directions of Tay J, the order to show cause was advertised in The Straits Times. The respondent was not present in court on the day this application was heard. Neither was he represented by counsel. No cause was shown and at the conclusion of the hearing we ordered that the respondent be struck off the roll of advocates and solicitors of the Supreme Court of Singapore.

3 The story began with a claim brought by Toshiba Machine S E Asia Pte Ltd (“Toshiba”) against Reliance Plastic Sdn Bhd (“Reliance”), a Malaysian company, for payment of approximately $1.3m being the purchase price of 11 machines sold to the latter. The respondent was retained as instructing solicitor to work on the claim with a Malaysian law firm, M/s K N Fan & Company. In the course of the proceedings, Toshiba obtained an interim injunction to repossess the 11 machines. By consent of the parties, the 11 machines were sold to a buyer in Singapore. The sale proceeds of $650,000 were held by the respondent as stakeholder pending the outcome of the proceedings in Malaysia. The Malaysian proceedings were eventually settled and Toshiba was to be paid the net sum of $635,000. Initially, Toshiba made no headway in its attempts to secure the release of the $635,000 from the respondent. Finally, on or about 14 February 2003, the respondent handed over a cheque for $635,000 which was post-dated to 5 March 2003. However, the cheque was dishonoured upon presentation for payment on 5 March 2003. Toshiba made a police report against the respondent on 7 March 2003 for misappropriation of the $635,000.

4 Toshiba also lodged a complaint with the Law Society. A Disciplinary Committee was appointed pursuant to s 90 of the Act to hear and investigate the complaint. The respondent did not appear at the hearing of the Disciplinary Committee. Before the Disciplinary Committee, two charges were preferred against the respondent. They were:

First Charge

That you, Fun Huay Yew are guilty of grossly improper conduct in the discharge of your professional duty within the meaning of Section 83(2)(b) of the Legal Profession Act (Chapter 161) in that you had, in breach of your written professional undertaking stated in your letters dated 13th September 2001 and 1st October 2001 to Toshiba Machine S E Asia Pte Ltd (“Toshiba”), namely to hold the sum of S$650,000.00 as a stakeholder pending the outcome of the trial in the Malaysian case of Suit No. 22-110-1999 (“the suit”), wilfully failed and/or refused to pay the balance sum of S$635,000.00 as stakeholder, to Toshiba as ordered upon conclusion of the suit despite their repeated demands and requests.

Second Charge

That you, Fun Huay Yew are guilty of fraudulent conduct in the discharge of your professional duty within the meaning of section 83(2)(b) of the Legal Profession Act (Chapter 161) in that you had, on or about 5th March 2003, issued a cheque payment to your client, Toshiba Machine S E Asia Pte Ltd by way of a Standard Chartered Bank cheque No. 678555 issued from the client’s account of your firm, namely, M/s Fun Huay Yew & Co which cheque was dishonoured upon presentation for payment.

5 Before the Disciplinary Committee, Michael Sim Chee Sin, the deputy general manager of Toshiba, gave evidence. He testified as to the circumstances surrounding the appointment of the respondent and the events leading to the sum of $650,000 being held by the respondent as stakeholder. Prior to the appointment of the respondent as stakeholder, there was an issue as to who should hold the sale proceeds pending the outcome of the Malaysian proceedings. The proposal was for the sale proceeds to be held in a trust account in the joint names of the Malaysian lawyers representing the litigants. Mr Sim testified that the respondent had advised Toshiba against the transfer of the sale proceeds to Malaysia and warned Toshiba of foreign exchange losses and possible complications arising from foreign exchange controls. The respondent advised Toshiba to transfer the sale proceeds to his firm. Toshiba agreed and the sum of $650,000 was deposited with the respondent’s firm as stakeholder pending the outcome of the Malaysian proceedings. The firm duly issued an official receipt no 1207 dated 20 September 2001 which described the payment as “[b]eing Sale Proceeds held by us as stakeholders”.

6 The first charge concerned the respondent’s undertaking. It is helpful to set out the relevant paragraphs of the respondent’s letters of 13 September 2001 and 1 October 2001 to Toshiba. The first letter reads:

…

Further, we have also explained the need to transfer the sum of S$650,000.00 to us to hold as stakeholders pending the outcome of the trial. As mentioned before, the said sale proceeds should not be held by you and since [Reliance is] now making an issue out of this, we must therefore assure the Malaysian Court that the monies are safely held in our Clients’...