Law Society of Singapore v Uthayasurian Sidambaram

• Judge: Chao Hick Tin JA
• Judgment Date: 13 August 2009
• Neutral Citation: [2009] SGHC 184
• Defendant Counsel: Narayanan Sreenivasan and Heng Wangxing (Straits Law Practice LLC)
• Citation: [2009] SGHC 184
• Subject Matter: Circumstances in which stay of one set of proceedings would be granted,Whether lawyer preferred interests of one client over others,Appropriate sentence for misconduct,Implied retainer,Whether lawyer guilty of improper conduct or practice,Client,Section 83 Legal Profession Act (Cap 161, 2001 Rev Ed),Lawyer's duties when acting for multiple parties where there were no common interests,Rule 7(1)(a)(iv) Legal Profession (Solicitors' Accounts) Rules (Cap 161, R 8, 1999 Rev Ed),Concurrent civil or criminal and disciplinary proceedings,Whether lawyer's conduct amounting to misconduct unbefitting advocate and solicitor,Disciplinary proceedings,Lawyer advocate and solicitor taking instructions from agent,Lawyer advocate and solicitor acting for multiple clients,Show cause action,Failure to advise,Lawyer advocate and solicitor found guilty of misconduct unbefitting advocate and solicitor,Conflict of interest,Sections 83(2)(b) and 83(2)(h) Legal Profession Act (Cap 161, 2001 Rev Ed),Duties,Administrative Law,Whether lawyer advised complainant on consequences of imbuing agent with blanket authority,Legal Profession,Lack of delivery of bill of costs to client,Breach,Actual or potential conflicts of interest,Professional conduct
• Published date: 20 August 2009
• Plaintiff Counsel: Denis Tan and George John (Toh Tan LLP)
• Year: 2009
• Court: High Court (Singapore)

13 August 2009

V K Rajah JA (delivering the grounds of decision of the court):

Introduction

1 Conflict of interests issues often raise knotty overlapping problems in relation to a solicitor’s duty of confidentiality, loyalty and conscientiousness. While these issues are certainly not peculiar to the legal profession, the problems they engender are nowadays among the most common ethical challenges faced by all solicitors on a daily basis. Solicitors have to always bear in mind that they are in a fiduciary relationship with their clients and reliance is being placed on them for their expertise, integrity, fairness and judgment. If they have not been careful in making a decision to represent multiple clients, not only can they be disqualified from acting any further for all of the clients in the same matter, an error could also expose them to disciplinary action. The present matter is a timely reminder to the legal profession of the possible pitfalls faced by solicitors when they act for multiple clients with conflicting interests in the same transaction.

2 The Law Society of Singapore (“the Law Society”) applied, pursuant to s 94(1) read with s 98 of the Legal Profession Act (Cap 161, 2001 Rev Ed) (“the Act”) (the latest edition being the 2009 Rev Ed, but the applicable version in the present case is the 2001 Rev Ed), for an order calling upon Uthayasurian Sidambaram (“the respondent”) to show cause as to why he should not be dealt with under ss 83(2)(b) and 83(2)(h) of the Act. The respondent is an advocate and solicitor of some 18 years’ standing. After we heard the submissions of the respective parties, we granted the application and ordered the respondent to be suspended from practice for a period of one year. We now set out our reasons for our decision.

The factual background

3 Mr Satinder Singh Garcha (“the complainant”) engaged the respondent to act for him in the proposed joint development of the land at No 7 Tanglin Hill, Singapore (“the Property”) with the owner of the Property, the Royal Brunei Government (“RBG”).

4 The complainant is a boutique property developer who has been involved in developing properties in prime locations in Singapore through his company, Elevation Developments Pte Ltd. He is a self-styled “private investor … a high net worth individual” who “develop[s] real estate [and] invest[s] in companies”^{[note: 1]}. It is common ground that he is a savvy businessman.

5 In 2001, the respondent was introduced to Louis Ang Pau Chuang (“Ang”) by a client of his firm^{[note: 2]}. While they did not have any dealings, the respondent was aware that Ang was a bankrupt^{[note: 3]}. They lost contact in 2002^{[note: 4]}. Some three years later, Ang approached the respondent in August 2005 and asked him to handle legal work in respect of several development projects in Singapore and Malaysia.^{[note: 5]} Ang claimed to be a close business associate of Pengiran Setia Negara, Pengiran Haji Mohammad PSN bin Pengiran Haji Abudul Rahim (“PSN”), who represented RBG’s interests in Singapore. Ang told the respondent that he handled all of PSN’s affairs in Singapore and that RBG was keen to work with an investor who could build good-class bungalows on the Property. The bungalows would then be sold, with the fruits of the joint development to be divided among the parties, in accordance with an agreed ratio (“the Project”).

6 Ang further informed the respondent that PSN would be receiving a mandate from RBG to deal with the development of the Property. Ang also claimed that he had a power of attorney from PSN to manage all his affairs in respect of the Property. The respondent, not surprisingly, was keen to accommodate Ang.

7 In September 2005, Ang discussed the Project with the respondent and introduced the respondent to PSN over the phone. According to the respondent, PSN confirmed in the course of the telephone conversation that:

(a) he would not have any difficulty in obtaining a mandate from RBG for the development of the Property but wanted Ang to ensure that the potential parties who wanted to be involved in the Project had the financial means^{[note: 6]};

(b) the respondent be his legal advisor in respect of the Project; and

(c) the respondent could take instructions from Ang and his son, Pengiran Haji Yura Atamaya PSN (“Atamaya”) and liaise with them regarding the payment of his legal fees.

The respondent agreed to act for them. Ang and the respondent agreed that his legal fees would be in the range of $200,000 to $250,000, including disbursements with a retainer fee of $100,000. Pertinently, the respondent did not subsequently receive the retainer from either Ang or Atamaya.

8 Following this, the respondent met Ang on several occasions to discuss the appointment of architects and consultants for the Project. During one such meeting, the respondent was introduced to Lim Peng Lee (“Lim”) who had incorporated a British Virgin Islands company, Langston Key Investments Limited (“LKIL”). Lim represented that he had PSN’s consent to negotiate with potential developers of the Project. LKIL would enter into a joint development agreement with RBG. The approved developer would, in turn, enter into a joint venture with LKIL or would be a subsidiary of LKIL.

9 In or about April 2006, the respondent was informed by Ang and Lim that they had finally found a potential joint developer. Lim gave instructions to the respondent to prepare a pre-contract agreement for the joint development of the Property (“the Pre-Contract Agreement”) between LKIL and Langston Key Investments Pte Ltd (“LKIPL”). Chin Bay Ching (“Chin”) was a director cum shareholder of LKIPL. The process leading to the finalisation of the Pre-Contract Agreement was fairly protracted but on 25 April 2006, all parties signed the agreement. Under the terms of the Pre-Contract Agreement, Chin was to pay Atamaya a sum of $300,000 as earnest monies towards the joint development of the Property. This sum was intended to be held by stakeholders until in-principle approval was obtained from RBG^{[note: 7]}.This condition was eventually waived and the sum was released to Atamaya, in exchange for his agreement under an Indemnity and Guarantee dated 28 April 2006^{[note: 8]}, in favour of Chin, to return the sum in the event the joint development project did not materialise. The respondent subsequently sent this document to Chin’s solicitors, M/s Derrick Wong & Partners.

10 However, matters took a different turn when the respondent was subsequently informed by Ang that Chin was not a suitable joint developer. Ang indicated that he, together with one, Frank Kuhn Swi Hwa (“Kuhn”), were actively searching for alternative investors. The respondent pressed Ang about the payment of his legal fees for services rendered until then. Ang replied that he would be paid once a suitable joint developer was found. Atamaya also confirmed that the respondent would be paid soon.

11 The complainant only entered the picture at this point in time. He quickly expressed interest in purchasing the Property. The respondent informed the complainant by way of a letter dated 10 April 2006^{[note: 9]} that his clients were not considering a sale of the Property but were considering a joint development of the Property. Not long after this, the complainant met Ang for the very first time. Ang tried to convince him to invest in the Project rather than purchase the Property. The complainant testified in the course of the disciplinary proceedings that he was initially not keen to be an investor.

12 On 19 May 2006, Ang and Kuhn met the complainant to persuade him to invest in the Project. At this meeting, the complainant expressed reservations about the Project as well as his concerns as to how his investment would be protected. Ang informed the complainant that the respondent acted for PSN and that he would introduce the respondent to him to address his concerns. According to the complainant, at this meeting, both Ang and the respondent were candid^{[note: 10]} in responding to his concerns. The complainant was concerned about two aspects of the Project: whether his investment could be protected via a caveat or a charge over the Property^{[note: 11]} and the implications of the Project being based upon a power of attorney^{[note: 12]}.

13 Several further meetings took place between Ang and the complainant in the absence of the respondent. These meetings were held at various locations such as the Marina Mandarin Hotel, Four Seasons Hotel as well as the complainant’s home^{[note: 13]}. The complainant eventually agreed to become involved in the Project and invest $1m in the Project as well as buy out Chin’s interests. He also agreed to appoint the respondent to act for him in the Project. On 23 May 2006, the complainant attended at the respondent’s office at 133 New Bridge Road, #25-02, Chinatown Point, Singapore 059413 with Ang. He deposited the sum of $1m into the respondent’s client account by way of two cheques of $500,000. The complainant alleged that the sum was to be divided in the following manner:

(a) $300,000 would be paid to Chin to buy out Chin’s interests; and

(b) $700,000 was to be used as paid-up capital for a company to be incorporated for the purposes of the Project.

The complainant also signed a warrant to act, appointing the respondent to act for him in the Project^{[note: 14]}.

14 While there is a minor controversy as to what transpired at a meeting on 24 May 2006, as well as the precise details leading up to the execution of a letter of authority given to Ang, it is common ground that Ang and the complainant met at the complainant’s home and that the issue of the disbursement of $1m was discussed. The complainant alleged that he had called the respondent, who advised him to execute a letter of authority stating that the complainant “authorise[d] [Ang] to disburse funds as he deeme[d] fit on [his] behalf”^{[note: 15]}. He further alleged that it was the respondent who dictated the exact content of the letter of...