Law Society of Singapore v Udeh Kumar s/o Sethuraju

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 28 June 2013
• Neutral Citation: [2013] SGHC 121
• Court: Court of Appeal (Singapore)
• Docket Number: Originating Summons No 905 of 2012
• Year: 2013
• Published date: 17 July 2013
• Hearing Date: 08 February 2013
• Plaintiff Counsel: Tan Tee Jim SC, Darrell Wee and Yik Shu Ying (Lee & Lee)
• Defendant Counsel: Francis Xavier SC (Rajah & Tann LLP), S Magintharan and B Uthaya Chanran (Essex LLC)
• Subject Matter: Legal Profession,Professional Conduct
• Citation: [2013] SGHC 121

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

It is axiomatic that, subject to his or her overriding duty to the court, an advocate and solicitor’s first duty is to his or her client. This overarching duty takes various forms which are, in the final analysis, both obvious as well as commonsensical. One duty is to communicate directly with one’s client. Another is to keep the client reasonably informed. A third is to always advance the client’s interests unaffected by the advocate and solicitor’s and/or a third party’s interest, the failure to do so amounting to the advocate and solicitor placing himself or herself in an unacceptable position of a conflict of interests. All three duties were alleged to have been contravened by the advocate and solicitor (“the Respondent”) in the present proceedings, which concerned an application by the Law Society of Singapore (“the Applicant”) for an order pursuant to s 98(1) of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“the Act”) that the Respondent be made to suffer such punishment as is provided for in s 83(1) of the Act.

In The Law Society of Singapore v Udeh Kumar s/o Sethuraju [2012] SGDT 4 (“the Report”), the Disciplinary Tribunal (“the DT”) found that all three charges against the Respondent were made out beyond a reasonable doubt and that cause of sufficient gravity therefore existed for disciplinary action against him; hence, the present application which is before this court.

Facts Parties to the dispute

The Respondent is an Advocate and Solicitor of the Supreme Court of approximately 25 years’ standing. During the material time, he practised in the firm of S K Kumar & Associates (“the Firm”). He is now practicing in S K Kumar Law Practice LLP.

The complainant, Nor Afidah binte Mohamed Kassim (“the Complainant”), was the Respondent’s client. She worked as a school cleaner and claimed that she was not well-educated and was unfamiliar with the English language. She was married to one Norazman bin Ali (“Norazman”) and in 2009, the couple were in the process of undergoing divorce proceedings.

One Mohamed Haron Bin Hassan (“Haron”) was a housing agent who was employed by Happiness Housing System Pte Ltd (“Happiness”). Haron is also the cousin of the Complainant. Happiness was owned, in the proportion of 49%, by one Mr Peh Teck Tiong (“Peh”). Peh, whose first name is Desmond, was also the sole proprietor of Heedmasters Credit, a firm of licensed moneylenders (“Heedmasters”). Both Happiness and Heedmasters were, at the material time, located at Sultan Plaza at Jalan Sultan.

At the material time, the Respondent employed one Nur Elliana Taye Binte Saifuddin (“Elly”) as a conveyancing secretary. The Respondent had an office on the 9th floor of the Housing Development Board (“HDB”) Hub at Toa Payoh. It was on the same floor as two other law firms.

The events on 26 September 2009

In September 2009, the Complainant and Norazman asked Haron to sell their flat at Block 504 Bedok North Street 3 #11-126 (“the Flat”). Around the same time, the Complainant needed $10,000 to settle her debts. Haron claimed that she had sought his help to secure a loan and had told him that she was “desperate” because she was being chased by friends and relatives.

On 26 September 2009, Haron introduced the couple to Heedmasters at Sultan Plaza, so that the Complainant could borrow $10,000. The Complainant discussed the request for the loan with Peh who agreed to extend a loan of $10,000 to the Complainant. The Complainant signed a number of documents – the loan agreement, a loan application form (collectively, “the First Loan Agreement”), a form of note of contract under the Moneylenders Act and a declaration under the Bankruptcy Act as well as copies of the duly acknowledged cheque and cash voucher. In the First Loan Agreement, the Complainant was named as the borrower and Norazman was named as surety.

Whether she knew what she had signed and whether she had been given copies of those documents is in issue. One of the documents contained the Complainant’s confirmation that she had received $10,000, consisting of cash in the sum of $6,000 and a cheque for $4,000.

The events on 8 October 2009

On 8 October 2009, the Complainant and Norazman signed some documents in different offices at the HDB Hub in Toa Payoh, as follows: A Warrant to Act appointing the Firm in the sale of the Flat; A Letter of Authority declaring that the Firm was authorised to collect the sale proceeds on their behalf and to deduct, inter alia, the legal costs of $1,500 (“the First LOA”); and A Power of Attorney signed by Norazman authorising the Complainant to act in the sale of the Flat on his behalf (“the POA”).

On the very same day, presumably after the POA had been signed, the Complainant – without Norazman – signed the following documents: A Letter of Authority declaring that the Firm was authorised to pay out, from the sale proceeds, the sum of $19,000 plus interest in favour of Heedmasters (“the Second LOA”); A Statutory Declaration to the effect that she intended to sell the Flat and that she had applied to Heedmasters for a business loan of S$9,000 for a business enterprise known as “Afidah Spa” in the presence of Mr Loh Chiu Cheong of Chiu Cheong & Co, a firm of Advocates and Solicitors, which was on the same floor as the Respondent’s office; and A second loan agreement signed by the Complainant which stated that Heedmasters had agreed to extend a business loan of S$9,000 for a business enterprise known as “Afidah Spa” (“the Second Loan Agreement”). Curiously, the Second Loan Agreement was dated 9 October 2009 instead of 8 October 2009 (which was the date of signing).

The exact circumstances and locations in which these documents were signed are disputed by the parties. In summary, the Complainant contended that: she was taken to the Respondent’s office more than once to sign the aforementioned documents and was attended to by one David (who was an employee of Happiness); she did not read or understand the documents which she had signed and no one explained their contents to her; and she had only been paid $10,000, despite having signed documents to the effect that she had incurred a $19,000 loan, without realizing what she was doing.

The Respondent, however, contended that: Elly had explained these documents to the Complainant and that the latter had acknowledged that she understood them; there was no one by the name of David at the Respondent’s office on that day; it was the Complainant herself who told Haron that she had wanted to enter into the Second Loan Agreement; and the full $19,000 had been transferred to her.

HDB’s letter on the caveat

On 20 November 2009, HDB sent a letter to the Complainant informing her that a caveat (for a loan of $10,000) had been lodged against the Flat by Heedmasters (“the Caveat”). That letter went on to state that the HDB would not be able to process the application for the sale of the Flat unless the Caveat was withdrawn. It also noted that the Complainant had engaged a solicitor to Act for her in the sale of the Flat. In fact, the name of the Firm was indicated at the bottom of the letter as the letter was copied to the Firm as well.

Subsequent events in 2010 leading to the sale completion

By a letter dated 11 February 2010, the Firm wrote a letter (which was signed by the Respondent) to HDB stating that it had “taken [the Complainant’s] instructions on the matter and that [the Complainant and the buyers] are agreeable to complete on 25 March 2010”. A similar letter was sent to the Central Provident Fund (“CPF”) Board to give the latter notice to “discharge the [CPF charge] on the [Flat]”. HDB replied to the Firm on 13 February 2010 stating its in-principle approval for the resale transaction of the Flat to the buyers.

On 8 March 2010, HDB forwarded the Transfer instrument for the Complainant’s execution to the Firm. The Firm replied to HDB by way of a letter dated 18 March 2010, with a signed copy of the Transfer instrument (ie, with the Complainant’s signature) attached.

By a letter dated 22 March 2010, the Firm asked Heedmasters’ solicitors, TH Tan Raymond & Co (“TH Tan”), to withdraw the Caveat so as to enable completion of the sale of the Flat to take place on 25 March 2010. It also asked how much would be payable to Heedmasters on 25 March 2010. On the same day, TH Tan informed the Firm that it would withdraw the Caveat upon receipt of the Firm’s undertaking to pay $25,939.43 to Heedmasters and $500 to TH Tan (“the undertaking”). The Firm responded by furnishing the undertaking to TH Tan. It is disputed whether the undertaking was given with the Complainant’s knowledge and consent.

Completion of the sale of the Flat duly took place on 25 March 2010. On completion, the Firm received HDB’s cheque for the balance sale proceeds in the sum of $55,986.07 and the completion account.

Events after the sale completion

The Complainant sent the Respondent a letter dated 25 March 2010 (“the 25 March 2010 letter”) which was delivered on the morning of 26 March 2010. The 25 March 2010 letter was drafted by one Fadil of Billal & Co (who was also known as Sheik Nawaz) to revoke the Firm’s authority to deduct and/or disburse the sale proceeds to any party, and to instruct the Firm to forward the sale proceeds, less the Firm’s conveyancing fees of $1,200, to the new solicitors acting for the Complainant, Anthony & Co. The Complainant signed that letter on her own behalf as well as for Norazman. The 25 March 2010 letter was followed shortly by a letter dated 26 March 2010 from Anthony & Co to the Firm, essentially repeating the same points in the 25 March 2010 letter.

The Respondent replied to Anthony & Co on the same day (ie, 26 March 2010) stating that the Firm had obtained instructions from the Complainant to give an undertaking to TH Tan, and...