Law Society of Singapore v Naidu Priyalatha

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 16 September 2022
• Neutral Citation: [2022] SGHC 224
• Court: Court of Appeal (Singapore)
• Docket Number: Originating Summons No 8 of 2021
• Published date: 21 September 2022
• Year: 2022
• Hearing Date: 09 May 2022
• Plaintiff Counsel: Saw Seang Kuan and Kang Su-Lin (Lee & Lee)
• Defendant Counsel: Anand Kumar s/o Toofani Beldar and Krishnasamy Siva Sambo (Pathway Law Practice LLP)
• Subject Matter: Legal Profession,Disciplinary proceedings,Professional conduct,Breach
• Citation: [2022] SGHC 224

Judith Prakash JCA (delivering the grounds of decision of the court):

In the practice of law, an undertaking given by a solicitor plays the role of a cast-iron guarantee, practically a sacred vow. Once it is given, other practitioners will govern their conduct in reliance on it. Such undertakings are indispensable to the speedy and efficient transaction of legal business including the handling of litigation. Due to the respect lay persons and other lawyers accord an undertaking, its breach by the undertaking solicitor can lead to serious consequences. Breach of an undertaking is, therefore, almost invariably an act of professional misconduct. This case, unfortunately, involves one such breach.

This was an application by the Law Society of Singapore (“the Law Society”) for an order pursuant to s 94(1) read with s 98(1) of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“the LPA”) that the respondent, Ms Naidu Priyalatha (“the Respondent”), be sanctioned under s 83(1) of the LPA. The application arose from a complaint that the Respondent had breached a solicitor’s undertaking she had given. The Respondent did not contest the charge preferred against her. Before the Disciplinary Tribunal (“the DT”), both the Law Society and the Respondent took the position that in this case there was no cause of sufficient gravity which required a reference to this court. Nevertheless, the DT held that the Respondent’s conduct was cause of sufficient gravity for disciplinary action and the matter thus came before us.

At the end of the hearing, we agreed with the DT that cause of sufficient gravity existed, and that due cause for disciplinary action had been shown. We imposed a three-month suspension on the Respondent. We now set out the full reasons for our decision.

The charge

The charges against the Respondent, which were framed in the alternative under ss 83(2)(b) and 83(2)(h) of the LPA, read as follows:

Charge

That you, Naidu Priyalatha, are guilty of grossly improper conduct in the discharge of your professional duty within the meaning of section 83(2)(b) of the Legal Profession Act (Chapter 161) to wit, that, on 18 April 2017, despite having given your solicitor’s undertaking not to release a cashier’s order for the sum of $26,896.45 made in favour of Balestier Hui Kee Pte Ltd to your clients (Ng Kar Kui and Chang Lien Siang) until a comprehensive agreement had been reached between your clients, and Wong Siew Lan and Seah Sai Hong, in full and final settlement of all issues and claims between them, you in breach of your solicitor’s undertaking released the said cashier’s order to your clients when no such agreement had been reached between your clients, and Wong Siew Lan and Seah Sai Hong.

Alternative Charge

That you, Naidu Priyalatha, are guilty of misconduct unbefitting an advocate and solicitor as an officer of the Supreme Court or as a member of an honourable profession within the meaning of section 83(2)(h) of the Legal Profession Act (Chapter 161) in that you, on 18 April 2017, despite having given your solicitor’s undertaking not to release a cashier’s order for the sum of $26,896.45 made in favour of Balestier Hui Kee Pte Ltd to your clients (Ng Kar Kui and Chang Lien Siang) until a comprehensive agreement had been reached between your clients, and Wong Siew Lan and Seah Sai Hong, in full and final settlement of all issues and claims between them, you in breach of your solicitor’s undertaking released the said cashier’s order to your clients when no such agreement had been reached between your clients, and Wong Siew Lan and Seah Sai Hong.

The facts

The following summary of the facts comes from the agreed statement of facts presented to the DT.

The Respondent was admitted to the bar on 8 October 1980. At the material time, she was the sole proprietor of the firm Messrs P. Naidu. Chang Lien Siang and Ng Kar Kui (collectively, “the Clients”) instructed the Respondent to act for them in early 2017 in a dispute with their business partner, Wong Siew Lan (“the Complainant”).

The Complainant and the Clients were the shareholders and directors of Balestier Hui Kee Pte Ltd (“the Company”), a company in the business of running a noodle stall. The Complainant, who was the cook at the noodle stall, had engaged one Seah Sai Hong (“Seah”) to work as a store assistant.

Cash takings from the stall were initially deposited into the Company’s bank account. At some point, the Complainant allegedly discovered that the Clients had issued cheques from the Company’s bank account without the Complainant’s knowledge. After this discovery, the Complainant stopped depositing the stall’s cash takings into the Company’s bank account and put them elsewhere. The Clients were upset by this behaviour and threatened to sue the Complainant unless she returned the funds so taken.

On 28 February 2017, Linus Law Chambers who was then acting for the Complainant and Seah, made a settlement offer that included a term under which the cash takings from the stall for the period from 19 December 2016 to 11 February 2017, amounting to $26,896.45, would be repaid by way of a cashier’s order in favour of the Company (“the Cashier’s Order”). On 29 March 2017, the Respondent asked for the Cashier’s Order to be given to her by 6.00pm that day, failing which legal action would be commenced by the Clients against the Complainant and Seah.

Linus Law Chambers then proposed that they would hand over the Cashier’s Order subject to an undertaking from the Respondent not to release the Cashier’s Order to the Clients until a comprehensive agreement had been reached by the parties in full and final settlement of all issues and claims between them (“the Undertaking”). The Respondent replied by letter on 30 March 2017, agreeing to the Undertaking.

Unfortunately, thereafter the parties were unable to settle their disputes. Accordingly, on 24 April 2017, the Clients commenced legal proceedings against the Complainant and Seah. Allen & Gledhill LLP (“A&G”) entered an appearance for the Complainant and Seah. On 4 May 2017, A&G asked for the return of the Cashier’s Order. On 9 May 2017, the Respondent replied to A&G, saying that the Cashier’s Order had been held by her until 18 April 2017, and had since been deposited by the Clients into the Company’s bank account to pay for the Company’s overheads.

A settlement was eventually reached between the Complainant and Seah and the Clients in April 2018.

The proceedings before the Disciplinary Tribunal

On 29 November 2019, the Complainant made a complaint against the Respondent for breach of the Undertaking to the Council of the Law Society of Singapore (“the Complaint”). On 26 January 2021, the DT was appointed to hear and investigate the Complaint.

During the proceedings before the DT, the Respondent pleaded guilty to the charge of grossly improper conduct under s 83(2)(b) of the LPA and admitted the agreed statement of facts. The main issue for the Tribunal was whether cause of sufficient gravity for disciplinary action existed under s 83 of the LPA.

The Law Society’s position

The Law Society contended that, while the Respondent was wrong to have breached her undertaking, no cause of sufficient gravity for disciplinary action existed under s 83 of the LPA. This was because the Respondent had not acted dishonestly when she breached the Undertaking and had been under a lot of pressure from her clients. Instead, the Law Society argued that a sanction under s 93(1)(b)(i) of the LPA was called for, and that the appropriate sanction in the circumstances was a penalty of $15,000.

The Respondent’s position

The Respondent submitted that she had only released the Cashier’s Order to her clients because the Company was incurring costs that were being met by her clients’ personal funds. She also alluded to the fact that the Complaint had been filed despite there having been a settlement between parties. Further, no loss was suffered by the Complainant.

In mitigation, the Respondent submitted that she had elected to plead guilty, and that the breach was a “bare breach” that was not deliberate. Citing the case of The Law Society of Singapore v Chan Chun Hwee Allan [2016] SGDT 3 (“Allan Chan”), she submitted that there was no cause of sufficient gravity for disciplinary action and that the appropriate sanction was either a monetary penalty or a reprimand.

The DT’s findings and determination

The DT agreed that the Respondent had not acted dishonestly when she breached the Undertaking and had been forthright with the Complainant’s solicitors when the return of the Cashier’s Order was requested. The DT also agreed that the Respondent had not benefited personally as the Cashier’s Order was deposited into the Company’s bank account.

The DT did not accept, however, that the Respondent’s breach of the Undertaking was not deliberate, or that it was a bare or technical breach. The DT also did not accept that the Respondent had no alternative but to give the Cashier’s Order to her clients, and opined that the Respondent could have continued to hold the Cashier’s Order or returned it to Linus Law Chambers. As for the Respondent’s argument that her performance of the Undertaking was rendered impossible by her client having deposited the Cashier’s Order into the Company’s bank account, this “impossibility” had been created by the Respondent’s breach of the Undertaking.

In breaching the Undertaking, the Respondent had facilitated the deposit of the Cashier’s Order into the Company’s bank account, which was what the Complainant and Seah had objected to in the absence of a resolution to the dispute between parties. While the parties eventually reached a settlement, the DT was of the view that the eventual settlement could well have been influenced by the Respondent’s breach of the Undertaking.

In the DT’s view, the Respondent’s breach of the Undertaking was deliberate,...