Law Society of Singapore v Nor'ain bte Abu Bakar and Others

• Judge: Chan Sek Keong CJ
• Judgment Date: 08 October 2008
• Neutral Citation: [2008] SGHC 169
• Defendant Counsel: N Sreenivasan (Straits Law Practice LLC),Deborah Barker SC (KhattarWong) and Dube Vinod Kumar (Peter Chua & Partners),Shashi Nathan and Adrian Wee (Harry Elias Partnership)
• Subject Matter: Appropriate punishment,Legal Profession,Sections 83(2)(b), 83(2)(h) and 83(2)(j) Legal Profession Act (Cap 161, 2001 Rev Ed),Fraudulent or improper conduct,Lawyers knowingly deceiving or misleading the court into releasing moneys paid into court,Show cause action
• Published date: 14 October 2008
• Court: High Court (Singapore)
• Plaintiff Counsel: Andre Yeap SC, Lai Yew Fei and Dominic Chan (Rajah & Tann LLP)

8 October 2008 Judgment reserved.

Chan Sek Keong CJ (delivering the judgment of the court):

Introduction

1 This is an application by the Law Society of Singapore (“the Law Society”) pursuant to s 94(1) read with s 98 of the Legal Profession Act (Cap 161, 2001 Rev Ed) (“the Act”) for Nor’ain bte Abu Bakar (the first respondent), Ruby Tan Kim Suan (the second respondent) and Peter Chua Seng Hock (the third respondent) to show cause as to why they should not be dealt with under s 83 of the Act.

2 The respondents are advocates and solicitors of the Supreme Court of the Republic of Singapore. The first respondent has been in practice for about seven years and was a partner in the firm of M/s Abu Bakar, Tan Ibrahim & Partners (“ABTIP”) at all material times. She is currently the sole proprietor of ABTIP. The second respondent has also been in practice for about seven years and was at all material times a partner of ABTIP. She is currently living overseas and has no intention of returning to Singapore in the foreseeable future. Nonetheless, she instructed counsel to appear for her in the proceedings before us. The third respondent is an advocate and solicitor of more than 20 years’ standing, having been admitted to the Bar on 9 June 1982. He is the sole proprietor of M/s Peter Chua & Partners except for the period of 1995 to 2002 when his brother joined him as a partner.

The factual background

3 Before we consider the findings of the disciplinary committee (“DC”) appointed by the Law Society and the arguments of counsel for the Law Society and for the three respondents before us, it is necessary that we set out the factual background against which the disciplinary proceedings were brought against the respondents. As the disciplinary proceedings arose out of the involvement of the respondents in the disposition of the proceeds of sale of the 29 properties belonging to the Basharahil estate (“the B Estate”), we provide below a flow chart as an easy guide to the various issues dealt with in this rather lengthy judgment.

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The Estate and its beneficiaries

4 On 15 July 1953, Shaik Ahmad bin Abdullah Wahdain Basharahil (“the testator”) died in Madura, Indonesia, survived by five widows and many children. He left an estate (the B Estate) comprising, inter alia, 61 immovable properties in Singapore. His will directed that the B Estate be held on trust for his heirs in accordance with “Mohamedeen Intestate Law” upon the expiry of 21 years from his death. However, the B Estate was not distributed among the beneficiaries on the date as directed by the will. Subsequently, 32 of the 61 properties were acquired by the Government of Singapore, leaving the B Estate with 29 properties (“the 29 Properties”) with which the present proceedings are concerned.

5 Two groups of beneficiaries (which will be referred to as the “Camp A” and the “Camp B” beneficiaries) claimed the 29 Properties. The Camp A beneficiaries comprised the testator’s grandchildren of the first wife’s six children who had passed away between 1973 and 1987 (“the six sub-estates”). They were purportedly represented by one Musa Said Wachdin (“Musa”) and Salim Hassan Wachdin (“Salim”). The Camp B beneficiaries comprised descendants of the testator through his second to fifth wives.

Sale of the 29 Properties by the Camp B beneficiaries

6 On 12 August 1993, the Camp B beneficiaries purported to sell the 29 Properties to Beng Tiong Trading Import and Export (1988) Pte Ltd (“Beng Tiong”) for $8.26m. Later, on 19 July 1999, Beng Tiong obtained an order in Suit No 1255 of 1996 (“Beng Tiong’s Suit”) that it was entitled to the rights, interests, benefits and entitlements of the Camp B beneficiaries in the 29 Properties. Beng Tiong also obtained a declaration that the Public Trustee (“PT”), who had been appointed trustee of the will of the testator by an order of court of 11 October 1996, was to take “such steps as are necessary in cognisance of the [said] declaration” (see Beng Tiong Trading, Import and Export (1988) Pte Ltd v Maria Janda Achmad bin Abdullah Wachdin Basharahil [2003] 2 SLR 518 at [4]). One JAK Alhadad & Co Pte Ltd (“JAK”) (whose involvement in the events will become evident later) had applied to be joined as a party in this action, and eventually the orders obtained by Beng Tiong were set aside.

Sale of the 29 Properties by the Camp A beneficiaries

7 By an agreement to purchase dated 5 November 1994 (“the 1994 Agreement”), one Abdurrachman Abdullah Wachdin Basyarahil (“Abdurrachman”) as “the attorney of the heirs and heiresses” of the testator and the sole representative of all the beneficiaries under the will, purportedly sold the 29 Properties to JAK for $14m. JAK was the corporate alter ego of one Syed Jafaralsadeg bin Abdul Kadir Alhadad (“Jafar”). Jafar was made a bankrupt on 18 January 1998 and is at present still a bankrupt. He had also been convicted and imprisoned for criminal breach of trust. By six deeds of assignment and release, each dated 12 February 1996 (“the 1996 Agreements”), the six sub-estates purportedly assigned and released to Jafar all their interests and entitlements in the 29 Properties for $2m each, making a total of $12m. There is no explanation on record for this transaction (such as why the purchaser became Jafar instead of JAK) and why the purchase price was reduced by $2m. The first respondent’s explanation that the 1996 Agreements were necessary because the beneficiaries had wanted a more concise agreement in the Indonesian language was rejected by the DC.

8 On 19 March 1996, JAK in turn sold 25 of the 29 Properties to By Products Traders Pte Ltd and one David Reginald Broadley (collectively “B&B”) for which they eventually paid a total of $3,642,000. The remaining four properties were purportedly sold to one Mohamed Ayoob s/o Meera Hussain (“Ayoob”).

PT appointed trustee of the B Estate

9 On 11 October 1996, the PT was appointed the trustee of the will of the testator, ie, the trustee of the B Estate. In view of the competing claims to the 29 Properties, the PT (together with a beneficiary from Camp B) made an application in Originating Summons No 1030 of 2000 (“OS 1030/2000”) on 11 July 2000 for an order to sell the 29 Properties. All the known claimants were made respondents to the application, including B&B, JAK, and Musa and Salim. Musa and Salim objected to this joint application for the sale of the properties. To prosecute their own claim, Musa and Salim filed Originating Summons No 600626 of 2001 (“the opposing OS”) as plaintiffs and named the PT and the beneficiary from Camp B as defendants.

10 In those proceedings (ie, OS 1030/2000 and the opposing OS), JAK produced the following documents as evidence of its claim to the 29 Properties:

(a) the 1994 Agreement;

(b) the 1996 Agreements;

(c) a power of attorney management dated 10 April 1997 executed by:

(i) Musa,

(ii) Saleh Umar Wachdin,

(iii) Abdurrahim bin Awad Wachdin,

(iv) Abdurrachman Ali Wachdin (also known as Abdurrachman bin Ali bin Achmad bin Abdullah Wachdin Basyarahil),

(v) Salim, and

(vi) Azizah Wachdin,

in favour of Musa and Salim; and

(d) an order obtained from the Pamekasan Religious Court of Madura, on 16 October 2000 (“the Pamekasan Order”).

Court declares distributive shares of beneficiaries of the B Estate

11 OS 1030/2000 (consolidated with the opposing OS) was heard by Lee Seiu Kin JC over a few days. On 5 July 2002, Lee JC decided that Musa and Salim were not the agents or authorised representatives of all the beneficiaries of the B Estate (see Re Will of Shaik Ahmad bin Abdullah Wahdain Basharahil [2003] 1 SLR 433 (“Re Will of Shaik Ahmad”)). As a result, they did not have, at the material time, the capacity to sell and/or transfer the 29 Properties to JAK.

12 On 30 July 2002, Lee JC held that the Camp A beneficiaries were only entitled to 43.75% of the B Estate. Lee JC also authorised the PT to sell the 29 Properties at a reserved price of $17,970,000 and that the PT “shall not make any payment out of the proceeds of sale to the beneficiaries without the leave of the Court” (see Re Will of Shaik Ahmad at [23]). The first and second respondents, and the third respondent were aware of this direction as they were at the hearing, representing, respectively, JAK, and Musa and Salim. Pursuant to this order, the PT sold the 29 Properties for some $12m (“the Sale Proceeds”).

13 Lee JC’s decision rendered null and void the purported sale of the 29 Properties by the beneficiaries of Camp A and of Camp B to JAK and Beng Tiong respectively and also the purported sub-sales by JAK to B&B and Ayoob. The total failure of consideration resulting from Lee JC’s decision led to the purchasers and sub-purchasers taking steps to recover the purchase moneys paid to the vendors. This was when the respondents got involved in the machinations of Jafar to try to recover the purchase moneys he had purportedly paid to the Camp A beneficiaries.

Suit against Musa and Salim and default judgment

14 On 13 December 2002, ABTIP (the first and second respondents’ firm) commenced Suit No 1497 of 2002 (“the JAK Suit”) on behalf of JAK against Musa and Salim (as the trustees of the Camp A beneficiaries pursuant to the Pamekasan Order) to recover the sum of $4,270,096 being moneys allegedly paid by JAK to the Camp A beneficiaries, plus interest and costs. The payments were made up of $3,348,970 being deposits to the beneficiaries and $921,126 for disbursements and expenses. The statement of claim alleged that Musa and Salim were aware of the full particulars of these payments. Salim accepted service of the writ in Singapore by prior arrangement with ABTIP on 5 January 2003, but subsequently failed to enter an appearance, resulting in judgment in default of appearance being entered against him on 14 January 2003. ABTIP acted for JAK, and the third respondent acted for Musa and...