Law Society of Singapore v Leong Pek Gan

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 19 August 2016
• Neutral Citation: [2016] SGHC 165
• Plaintiff Counsel: Dhillon Dinesh Singh and Felicia Tan May Lian (Allen & Gledhill LLP)
• Docket Number: Originating Summons No 4 of 2015
• Date: 19 August 2016
• Hearing Date: 20 April 2016
• Subject Matter: Disciplinary Proceedings,Professional Conduct,Breach,Legal Profession
• Published date: 25 August 2016
• Defendant Counsel: Michael Khoo SC, Josephine Low and Chiok Beng Piow Andy (Michael Khoo & Partners)
• Citation: [2016] SGHC 165
• Court: Court of Appeal (Singapore)
• Year: 2016

Andrew Phang Boon Leong JA (delivering the judgment of the court): Introduction

The present case throws into sharp relief the perennial tension between a lawyer’s duty as his or her client’s advocate and his or her duty to the wider legal system. Lawyers are often expected to fearlessly advance the interests of their clients. But when the notion of duty to the client is carried too far, lawyers may find themselves enabling and facilitating criminal conduct. Indeed, the present matter provides a timely reminder of what can go wrong when a lawyer deliberately turns a blind eye to signs of wrongdoing.

In this originating summons, the Law Society of Singapore (“the Law Society”) applied for the respondent (“the Respondent”), an advocate and solicitor of more than 30 years’ standing, to show cause as to why she should not be dealt with under s 83(1) of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“the LPA”). The conduct complained of was, in essence, that the Respondent had acted for the parties on both sides of an unlicensed moneylending transaction and had preferred the interests of the moneylender in the process. Four charges were brought against the Respondent, and the Disciplinary Tribunal determined that cause of sufficient gravity existed for disciplinary action under s 83(2)(b) or, alternatively, s 83(2)(h) of the LPA on each of the four charges. The Disciplinary Tribunal’s decision is reported in The Law Society of Singapore v Leong Pek Gan [2015] SGDT 4 (“the DT Report”).

Background facts The transaction in question

The transaction which the Respondent was engaged to handle (“the Transaction”) was, on its face, for the sale and purchase of a property at Bedok Court (“the Property”). The Property was owned by the complainant, Ms Vimala Devi d/o Selvadurai (“the Complainant”), and her husband (collectively referred to as “the Vendors”). At the relevant time, the Complainant was an insurance agent and her husband was a property agent. The intended purchaser was Invest-Ho Properties Pte Ltd (“Invest-Ho”). At all material times, Invest-Ho was represented by Benson Ho Soo Fong (“Ho”), who was its managing director and shareholder.

The Transaction was structured as follows. The Vendors would grant Invest-Ho an option, exercisable anytime within six months, to purchase the Property at a price of $651,000. It should be noted that the market value of the Property at the time was almost three times that amount (ie, approximately $1.7m), a point which we will return to later. The option fee was $250,000, and a further sum of $400,000 was to be paid upon the exercise of the option, leaving only a nominal $1,000 due on completion. At the same time, the Vendors would grant a power of attorney in Ho’s favour to allow him to deal with the Property. Among the broad powers granted to Ho were: (a) the power to “sell … and absolutely dispose of” the Property on such terms and conditions as he thought fit (cl 1.1); (b) the power, upon selling the Property, to give good receipt for any monies due to the Vendors and to do whatever he thought fit with those monies (cl 1.5); (c) the power to substitute any other person, at his pleasure, as the attorney (cl 1.17); (d) the power to deposit any monies which he received in his capacity as the Vendors’ attorney or which was otherwise due to the Vendors into any account in the name of any person whom he (Ho) deemed fit and to withdraw those monies for his own use and benefit, including investing those monies in his own name (cl 1.21); (e) the power to do all other acts whatsoever in connection with the power of attorney (cl 1.22); and (f) the power to lease the Property (cll 2.1 to 2.8). In addition, the power of attorney was stated to be “irrevocable until the Property is sold and all monies paid to [Ho]”.

The events leading up to the Transaction

Beyond the undisputed fact that the Vendors and Ho were introduced to each other by a mutual friend, one Mr Selvarajan s/o Letchuman (“Rajan”), the parties proffered divergent accounts of the events leading up to the Transaction. According to the Vendors, Ho agreed to loan them $250,000 for a period of six months at an interest rate of 15% per annum, on the condition that they provided an option to purchase as well as a power of attorney over the Property. The power of attorney was to enable Ho to enforce the option to purchase in the event that the Vendors defaulted on loan repayment and tried to renege on the option to purchase.

On the other hand, Ho (who was called as the Respondent’s witness) testified that the Transaction was a genuine sale and purchase of the Property. According to him, the Vendors were in dire financial straits and had approached him for a loan of $400,000. He had rejected their request because he was not a licensed moneylender. Subsequently, the Vendors approached him again to ask if Invest-Ho was willing to purchase the Property. He also claimed that the parties had agreed on the purchase price of $651,000 after some negotiation.

The Respondent’s involvement

At the material time, the Respondent was a partner at Ching Ching, Pek Gan & Partners and had over 30 years of experience in conveyancing practice. Ho instructed the Respondent to act in the matter by way of an email dated 2 August 2012 (“the 2 August 2012 Email”):

Hello . Miss Leong

Please see attachment . This is a Private 99 years . Can you please do for me

Thank you .

Ho Soo Fong

The “attachment” referred to in the email included a draft option to purchase as well as a power of attorney which were to be executed by the Vendors. The Complainant was copied in this email.

There is a dispute as to how the Respondent came to act for the Vendors. Ho’s account is that he instructed the Respondent on behalf of Invest-Ho and only introduced the Vendors to the Respondent when they asked if he knew of any conveyancing lawyer. Consistent with Ho’s account, the Respondent stated that she was introduced to the Vendors via the 2 August 2012 Email, and that the Vendors visited her office the next day (3 August 2012) and confirmed that they wanted her to act for them. In contrast, the Complainant states that it was Ho who chose the Respondent to act for her and her husband, and that Ho informed them that they would have to bear the solicitor’s fees of $1,000. According to the Complainant, the Vendors asked Ho if they could approach one of the lawyers whom her husband knew from his job as a real estate agent, but Ho insisted that they use the Respondent as their solicitor. Whichever was the case, the evidence was that the Vendors visited the Respondent’s office on 3 August 2012 and executed the option to purchase and the power of attorney in the Respondent’s presence. (The executed option to purchase and the executed power of attorney will hereafter be referred to as “the Option” and “the POA” respectively.) The handwritten attendance notes of the Respondent were bereft of details and simply stated as follows: - They signed (1) POA

(2) OTP

- But to wait for [Ho’s instructions] on Monday b4 proceeding any further - Email – apexintb24@singnet.com.sg - The OTP to be dated 3/8/12. - No [objection] to me replacing the pages of the OTP since signature page not affected - To email to her the amended OTP now - To email amended OTP to [Ho] also Although the Respondent’s handwritten attendance notes were dated 3 July 2012, it is common ground between the parties that the date of the Vendors’ visit to the Respondent’s office was 3 August 2012.

On 5 August 2012, the Vendors sent Ho a softcopy of the Option. According to Ho, the document which he received was “signed but undated”. Upon noticing two minor typographical errors in the Option, Ho sent an email to the Respondent and the Vendors pointing out those errors and asking the Respondent to make the necessary changes. The changes were made after the Vendors confirmed that they had no objections.

On 6 August 2012, the Respondent informed Ho that she would lodge the POA the next day and sought instructions as to whether a caveat should be lodged against the Property as well. The Respondent did not copy the Vendors in her email. Ho replied the next day (copying the Complainant) with instructions for the Respondent to lodge a caveat against the Property. In his reply, Ho also asked for a copy of the Option so that he could arrange for the option fee of $250,000 to be paid to the Vendors.

On 7 August 2012, the Respondent lodged a caveat on the Property in favour of Invest-Ho. It is particularly noteworthy that the caveat was lodged before the Vendors received the option fee, ie, before Invest-Ho’s interest in the Property had crystallised. The Respondent does not deny this. In fact, her evidence is that she lodged a caveat on the Property on Ho’s assurance that he would procure the payment of the option fee to the Vendors.

It was only on 8 August 2012 that the Vendors collected a cheque for the $250,000 option fee from Ho at Invest-Ho’s office. In exchange, the Complainant issued a cash cheque to Ho for the sum of $19,750, which, according to her, comprised $18,750 for the agreed 15% per annum interest on the loan for the six-month term and $1,000 for solicitor’s fees. Ho admits to having received the $19,750, but explains that the money was the commission for one Mr Nagasaravanan s/o Pillay (“Mr Sara”). According to Ho, Mr Sara had “inform[ed]” Rajan, who had in turn introduced him (Ho) to the Vendors (it is unclear from Ho’s evidence what Mr Sara had informed Rajan of). We will return to this point later.

The disagreements between the parties

On 1 January 2013, Ho sent the Complainant’s husband a text message which read as follows: “Hello. The exercise of your Option to Purchase of your property is coming very soon. Please let me know. Were [sic] you agree to us to extend your date of option in [sic] an urgent...