Law Society of Singapore v Tan Phuay Khiang

• Jurisdiction: Singapore
• Judge: Chan Sek Keong CJ
• Judgment Date: 26 June 2007
• Neutral Citation: [2007] SGHC 83
• Court: High Court (Singapore)
• Year: 2007
• Published date: 06 July 2007
• Plaintiff Counsel: Samuel Chacko and Peter Wadeley (LegisPoint LLC)
• Defendant Counsel: Chandra Mohan K Nair (Tan Rajah & Cheah)
• Subject Matter: Legal Profession,Professional conduct,Breach,Lawyer advocate and solicitor acting for homeowners in transaction for sale of flat pursuant to referral for moneylender,Lawyer preparing power of attorney for homeowners for proposed sale of flat,Lawyer preparing statutory declaration for homeowners authorising distribution of sale proceeds to five enumerated parties,Lawyer acting for some enumerated parties previously and receiving referrals from them,Whether lawyer's conduct amounting to misconduct unbefitting advocate and solicitor,Section 83(2)(h) Legal Profession Act (Cap 161, 2001 Rev Ed),Conflict of interest,Whether lawyer owing overriding duty to homeowners in sale transaction,Show cause action,Lawyer advocate and solicitor found guilty of misconduct unbefitting advocate and solicitor,Appropriate sentence for misconduct,Mitigation,Whether public service constituting mitigating factor
• Citation: [2007] SGHC 83

26 June 2007

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

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 an order calling upon Tan Phuay Khiang (“the respondent”) to show cause as to why he should not be dealt with under s 83(2)(h) of the Act. The respondent is an advocate and solicitor of 13 years’ standing. The facts of this case illustrate that it is plainly insufficient for an advocate and solicitor to claim that he may have literally complied with the codes of practice. In our view, an overly formalistic approach to the interpretation and application of professional conduct rules is to be eschewed. We consider the following observations made by the authors of The Ethics and Conduct of Lawyers in England and Wales (Hart Publishing, 1999) at p 7 entirely apposite and meriting reproduction:

We share this broader perspective. … [P]rofessional ethics are principally concerned with the moral dimensions of professional work and … these dimensions cannot be covered comprehensively by rules alone. While, therefore, it might be argued that ethics described expectations of professional conduct at a time in history when ethics were lived, rather than written down, but, we argue, professional ethics embrace a broader framework of values, in education, in local communities and in new thinking about old problems. [emphasis added]

2 Having heard the submissions of the respective parties, we granted the application at the conclusion of the hearing and ordered the respondent to be suspended from practice for a period of two years. We now set out our reasons for our decision.

The facts

3 The proceedings before us stem from the respondent’s professional conduct while representing Mr Peer Mohammed s/o Shaik Abdul Koder (“Peer”) and his wife, Mdm Zeenath Beagum d/o Malik Maihin (“Zeenath”) (collectively referred to as “the complainants”) in the sale of their flat at Block 514, Choa Chu Kang Street 51 #06-54, Singapore 680514 (“the Flat”) sometime during 1999 and 2000.

4 The complainants have a rudimentary primary education. Peer is a warehouse supervisor while Zeenath is a homemaker.

5 In or about late 1999, the complainants employed Ali Hassan s/o Dawood Marican (“Ali”) to sell the Flat. Ali informed them that they had to purchase a new Housing and Development Board (“HDB”) flat before they would be permitted to sell the Flat. Ali then found the complainants a new flat and drew up a financial plan. The net outcome of purchasing this new flat using the complainants’ Central Provident Funds and the sale proceeds of the Flat appeared to give the complainants an excess of some $90,000. Pleased with this, the complainants agreed to proceed.

6 Soon after, the complainants were informed of an appointment at the HDB Hub Resale Office for the purchase of the new flat. The only apparent wrinkle in this arrangement was that Ali remained unable to sell the Flat. The complainants became anxious as they were required to make an immediate cash payment of $45,000 for the new flat. Ali calmed their concerns by advising them to take a loan which he would arrange with a licensed moneylender, DK Credit Pte Ltd (“DK”).

7 Ali then brought the complainants to DK’s office at Parkway Parade on 3 January 2000. A male Chinese, after introducing himself as the owner, agreed to lend the complainants $45,000 on condition that they signed some legal documents at the office of DK’s lawyer. He informed the complainants that they were required to repay the loan with a fixed interest of $7,000 on top of the principal amount (ie, making a total of $52,000). The complainants agreed and were promptly handed a number of documents that recorded the principal amount as $65,000. The complainants only signed the documents after receiving assurances from DK’s owner and Ali that it was standard procedure for the principal amount to be recorded differently from the actual loan disbursed.

8 The complainants were subsequently informed to proceed to the respondent’s office at Beach Road. They did so, accompanied by a property agent, one Poh Keng Ann (“Poh”), from Ecstasy Property Services (“Ecstasy”). There, the respondent prepared, and the complainants signed, a power of attorney appointing one Cheung Siew Cheong (“Cheung”) as the complainants’ attorney in the proposed sale and subletting of the Flat (“the first meeting”). The complainants did not know who Cheung was. Though the respondent did not procure a warrant to act authorising the preparation of the power of attorney, he confirmed the complainants’ instructions on the following day through a letter. The complainants acknowledge that they received the respondent’s letter, but claim not to have understood the contents of the letter. They had immediately passed the letter to Ali.

9 On leaving the respondent’s office, the complainants were then taken by Ali to a bank branch at Parkway Parade, where a representative of DK met them and handed, in their presence, a cash cheque for $60,000 to the teller. From that sum, $15,000 was deducted, by the DK representative, while the remaining $45,000 was handed to Ali to be paid over to the HDB for the new flat.

10 On 24 April 2000, the complainants signed a warrant to act appointing the respondent’s firm to act for them in the sale of the Flat (“the second meeting”).

11 After Ali failed to sell the Flat, the complainants appointed another housing agent by the name of Leonard to market the Flat. The Flat was later sold for $258,000 on 7 July 2000, and the HDB eventually handed a cheque for $142,694.11 upon completion of the sale to the respondent’s representative. This sum represented the surplus after all the incidental deductions had been made from the sale price.

12 While there is a minor controversy as to where the parties met on 8 July 2000, as well as the precise circumstances pertaining to the signing of a statutory declaration, it is common ground that a meeting took place between the complainants and the respondent on that date (“the third meeting”). The respondent handed Zeenath a cheque for $48.11. When queried about the paltry amount stated on the cheque, Ali (who was present, according to the complainants) promptly handed Zeenath a cheque for $86,461 made in their favour. The complainants were then requested by the respondent to execute a statutory declaration authorising the respondent’s law firm to make the following payments (“the statutory declaration”):

(a) $10,800 to Ecstasy;

(b) $23,700 to Poh;

(c) $70,994 to DK;

(d) $750 to ML Mayeh & Co;

(e) $35,050 to Saudagar Moneylenders (“Saudagar”); and

(f) $1,352 to the respondent’s law firm in payment of his professional fees.

13 The statutory declaration confirmed that the complainants had received a payment of $48.11 which represented the balance of the net proceeds of the sale of the Flat, and that this payment, together with the payments to the five other enumerated parties, constituted full and final settlement of the sale transaction pertaining to the Flat. Unknown to the complainants, an intricate web of relationships existed between almost all the payees named in the statutory declaration apropos each other, as well as with the respondent. Ecstasy and DK had engaged the respondent to act for them on previous occasions, and also referred potential clients to the respondent. Also, Ecstasy appeared to have some form of indirect interest in the execution of the statutory declaration, given that its agent (Poh) had brought the complainants to the respondent to prepare the power of attorney. Saudagar was taken over in April 2000 by Ng Boon Kiat (“NBK”), who managed Ecstasy.

14 Ali’s cheque for $86,461 was dishonoured and although he gave repeated assurances that payment in full would be soon made, he eventually disappeared after making just a few payments amounting to $20,000. The complainants felt deeply aggrieved by this unhappy experience but initially thought that only Ali had taken them for a ride.

15 In or about 2002, the complainants learnt from a newspaper article about a similar transaction involving DK and another lawyer. Suspecting that there had been a well-orchestrated conspiracy to defraud them, the complainants, with the assistance of a friend, wrote a letter to the respondent requesting copies of documents relating to the loan. Only after a reminder dated 6 July 2002 did they receive a reply dated 10 July 2002 from another law firm, M/s Goodwins Law Corporation (“Goodwins”), claiming that the respondent’s firm, M/s Tan Loh & Wong, had merged with them. The complainants were requested to precisely identify the documents they required. On 17 July 2002, the complainants replied, identifying the documents they required. However, there was no acknowledgement or response from Goodwins despite a reminder sent on 16 September 2002. The complainants then sent a further reminder on 14 October 2002, to which Goodwins responded, stating that the respondent had only acted for the complainants in the sale of the Flat, and that the file was closed upon the completion of the sale on 7 July 2000. Dissatisfied, the complainants wrote again on 28 October 2002 insisting on having copies of the documents being sought. Finally, after Goodwins again failed to respond, the complainants engaged a law firm to make a written demand on their behalf. Only on 19 March 2003, some ten months after the initial request, did the complainants finally receive copies of the documents. All the letters from Goodwins were drafted and signed by the respondent.

16 Upon reviewing the documents, the complainants learnt that they had signed documentation prepared by the respondent, authorising him to represent them in the sale of the Flat, to receive the sale proceeds and thereafter distribute it amongst various persons. They remained perplexed as to why the cheque for...