Law Society of Singapore v Dhanwant Singh

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ,Andrew Phang Boon Leong JA,Steven Chong JA
• Judgment Date: 20 December 2019
• Court: High Court (Singapore)
• Date: 20 December 2019
• Docket Number: Originating Summons No 4 of 2019

Law Society of Singapore

and

Dhanwant Singh

[2019] SGHC 290

Sundaresh Menon CJ, Andrew Phang Boon Leong JA and Steven Chong JA

Originating Summons No 4 of 2019

Court of Three Judges

Legal Profession — Disciplinary proceedings — Professional conduct — Breach — Conveyancing account — Solicitor placing money from conveyancing transaction in client account — Whether money should be placed in conveyancing account — Whether cause of sufficient gravity shown — Principles governing conveyancing transactions — Conveyancing and Law of Property (Conveyancing) Rules 2011 (S 391/2011)

Legal Profession — Disciplinary proceedings — Sanctions — Law Society drawing attention to other pending proceedings against solicitor — Whether pending proceedings an aggravating factor — Principles governing imposition of sanctions

Legal Profession — Disciplinary proceedings — Solicitor agreeing oral evidence need not be called — Tribunal proceeding to render decision — Whether solicitor prejudiced by Tribunal's decision declining to hear oral evidence — Whether appropriate sanctions affected by Tribunal's decision — Principles governing conduct of disciplinary proceedings — Principles governing standard of proof in sentencing

Statutory Interpretation — Construction of statute — Purposive approach — Solicitor disbursing money from client account — Option to purchase ultimately not exercised — Sale and purchase agreement ultimately not executed — Whether money “conveyancing money” if not paid pursuant to sale and purchase agreement — Principles governing conveyancing rules — Principles governing lawyers' ethical and professional rules — Conveyancing and Law of Property (Conveyancing) Rules 2011 (S 391/2011) — Legal Profession (Solicitors' Accounts) Rules (Cap 161, R 8, 1999 Rev Ed)

Held, imposing a fine of $50,000 on the Respondent:

Breach of the Conveyancing Rules and the LP(SA)R

(1) The Respondent was not prejudiced. The Tribunal's findings were not premised on the absence of the alleged agreements. Rather, its comments were made by way of obiter dicta. It had stated that even an acceptance of the Respondent's account of the agreements would not have absolved him of liability. Nevertheless, given the Tribunal's approach not to call oral evidence, the benefit of the doubt was extended to him and it was assumed that the alleged agreements did exist: at [58] and [59].

(2) Even proceeding on assumptions favourable to the Respondent, the issue remained whether the $100,000 was “conveyancing money” under the Conveyancing Rules. A duty was imposed once conveyancing moneys reached a solicitor's hands and the transacting parties' contract between themselves could not absolve a solicitor of his duty. This duty arose as a matter of statute and not contract. An exception to the duty could only arise under exhaustively stipulated conditions in rr 5(2)–5(6), which the Respondent could not avail of in his case: at [60], [62], [64] and [65].

(3) The principles of statutory interpretation applied with equal force to legislative provisions or regulations concerning lawyers' ethical and professional duties: at [77].

(4) Under the first step of statutory interpretation, the court would ascertaine the possible interpretations having regard to the text in isolation, as well as the textual context within the written law as a whole. The Respondent's interpretation that r 2(2)(a) of the Conveyancing Rules would only apply after the option was exercised and when a sale and purchase agreement was formed was misplaced. The plain text of r 2(2)(a) did not state that conveyancing moneys were only moneys governed by the sale and purchase agreement. Rule 2(2)(a) would operate in the sales and purchases of any land regardless of the presence of a formal sale and purchase agreement: at [75], [77(a)] and [79].

(5) The Respondent's interpretation was also not supported by the surrounding provisions of the Conveyancing Rules. Rule 2(2) did not limit conveyancing moneys to only sale and purchase agreements. The sub-rules of r 2(2) were organised sequentially and thematically, and its symmetry and logic implied that the moneys payable pursuant to a sale and purchase agreement under r 2(2)(c) were but a subset of the wider categories of any moneys payable pursuant to sale and purchases of land more generally. Rule 2(2)(a) was another subset under that wider category, but one specifically concerned with moneys accounting toward the purchase price: at [83] to [85].

(6) Under the second step of statutory interpretation, it was axiomatic that ethical rules had to be read in light of their object and purpose. The overriding purpose of the LP(SA)R was to impose obligations upon solicitors in conveyancing transactions to keep safe the moneys by way of adherence to the Conveyancing Rules. The legislative raison dêtre of the Conveyancing Rules was to provide the public with the additional safeguard of requiring solicitors to hold conveyancing moneys in conveyancing accounts as stakeholders. This legislative intent could also be gleaned from the negative obligation underscored by Rule 4(1) not to hold conveyancing moneys except in the manner prescribed, and the positive obligation under Rule 5(1) to place such conveyancing moneys into a conveyancing account: at [77(b)] and [86] to [89].

(7) Under the third step of statutory interpretation, the court would compare the possible interpretations against the purposes and objects of the statute. Extraneous material could be referred to in confirming the ordinary meaning of the provision (taking into account its context and purpose). In this regard, the Parliamentary statements confirmed that the only interpretation of the Conveyancing Rules and the LP(SA)R was that conveyancing money included moneys payable prior to the execution of a sale and purchase agreement. The stated legislative purpose was for the protection of the public, and the principal statutory change was the creation of conveyancing accounts. This new device and its attendant features of increased security supported a purposive approach to interpreting the Rules in a way that would protect the public's moneys: at [77(c)] and [90] to [92].

(8) The Respondent's argument that his failure to secure the moneys in his firm's conveyancing account was irrelevant as the Complainant was not his client was not accepted. The protection conferred by the Rules was for the protection of the public and not simply for the client of a solicitor. The Respondent's interpretation was also rigid and formalistic and led to an entirely commercially insensible result. It would leave conveyancing practitioners entirely adrift as to their ethical obligations. A lawyer receiving conveyancing moneys prior to the exercise of an option to purchase would not know which account to place the money in, and whether to disburse such sums on their client's instructions as the purchaser might yet exercise the option: at [94], [95], [98] and [99].

Bona fide belief

(9) Even if the Conveyancing Rules imposed strict rather than absolute liability, it was not a defence to a strict liability provision to claim bona fide belief. If the Respondent's submission were accepted, it would perversely be in a solicitor's interest to deliberately refrain from familiarising himself with the relevant professional conduct rules so as to evade liability: at [103] and [106].

(10) Even on the assumption the Conveyancing Rules imposed strict liability, the Respondent had not taken any steps evincing reasonable care. He did not verify which account was proper to place the money in the circumstances. It was also undisputed that the Respondent immediately cashed the Complainant's cheque for $100,000 and disbursed it directly to the Vendors, prior to the expiry of the option to purchase. As such, when he breached his obligations, he could not logically have known that the option would not be exercised. When the Respondent transferred the money into his firm's client account and disbursed it, he had done so either in blatant disregard or blatant ignorance of his legal professional obligations: at [100] and [107] to [109].

Cause of sufficient gravity

(11) Due cause had been shown for the main charge of improper practice under s 83(2)(b) of the Act. The Respondent's breach fell further along the spectrum of seriousness of breaches. This breach was not merely technical and not some momentary lapse as the Respondent had ignored the request to place the moneys into the conveyancing account. Nor was the breach trivial as it had caused the Complainant the potential loss of a significant sum: at [111].

(12) Due cause would also have been shown on the alternative charge for misconduct unbefitting an advocate and solicitor under s 83(2)(h) of the Act. Any reasonable person would agree that the Respondent's breach brought discredit to lawyers: at [112].

Appropriate sanctions to be imposed

(13) It could not be said that the Respondent had caused the definite loss of $100,000. Rather, the Respondent had caused the Complainant to lose a potential method of recovery should the Complainant eventually turn out to be so entitled to recover the $100,000 from the Vendors. This did not make the breach less egregious. The Rules were developed to protect the public via the very mechanism of the conveyancing account. The Respondent's action had caused the precise adverse consequences that the Conveyancing Rules were designed to prevent. Moreover, the Respondent's failure to make good on his breach by restoring the moneys into the conveyancing account pending resolution of civil proceedings meant there was the absence of a mitigating factor: at [124] to [126].

(14) The Respondent's antecedent in Dhanwant Singh was not a relevant aggravating factor. The Respondent had committed those breaches in 1989 and 1990, and was struck off the roll of advocates and solicitors in 1995. The antecedent was very dated and not material: at [127] and [128].

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