Lee Siew Chun v Sourgrapes Packaging Products Trading Pte Ltd and Others

JudgeMichael Hwang JC
Judgment Date17 December 1992
Neutral Citation[1992] SGHC 315
Docket NumberSuit No 2961 of 1987
Date17 December 1992
Published date19 September 2003
Plaintiff CounselLoh Lin Kok with Tay Siok Leng (Loh Lin Kok)
Citation[1992] SGHC 315
Defendant CounselDavid Mitchell (Donaldson & Burkinshaw),CR Rajah with Zahara Bakar (Tan Rajah & Cheah),First defendant and first third party absent,C Arul with R Vikneson (C Arul & Partners)
CourtHigh Court (Singapore)
Subject MatterExistence of duty of care outside contract,Indemnity,Negligence of legal assistant in witnessing and attesting signature resulting in financial loss to plaintiff,Negligence of legal assistant in witnessing and attesting signature caused financial loss to plaintiff,Total reliance placed on son's explanation,Carelessness of plaintiff in signing document contributed to loss,Legal assistant not engaged by plaintiff as solicitor but assumed responsibility as such,Contract,Vicarious liability of legal firm,Contributory negligence,Discretion of court,Civil Procedure,Mistake,Pleadings,Implied contracts,Breach of implied obligations under contract of employment,Apportionment of liability,Legal assistant to fully indemnify legal firm for breach,Factors to prove,Duty of care,Non est factum,Legal assistant improperly witnessed and attested signature resulting in financial loss to plaintiff,Adding new defence at close of trial,Son induced belief that document was testimonial,Amendment of defence,Legal Profession,Whether act of legal assistant was outside scope of employment,Discharge of counsel,Considerations,Mother tricked by son into signing mortgage,Balance of justice,Standard of care to be observed,Liability for negligence,Negligence,Whether duty of care owed by solicitor outside contract,Tort,Vicarious liability,Whether legal assistant owed any duty of care to plaintiff,Whether onus of proof of non est factum discharged

Cur Adv Vult

The plaintiff is a widow who contends that her home has been wrongly mortgaged, her signature to the mortgage having been obtained by fraud. She now claims:

(a) as against the mortgagee (the second defendant), an order that (i) the mortgage be declared fraudulent and void, (ii) it be set aside and (iii) the title deeds to her home be returned to her;

(b) as against the company whose liabilities the mortgage was intended to secure (the first defendant), an order for damages;

(c) as against the firm of solicitors (the third defendants) whose employed solicitor is alleged to have falsely witnessed her signature in the mortgage and attested her acknowledgment of execution, an order for damages.

There are also third and fourth party proceedings between the various defendants.
The second defendant claims an indemnity or damages (or both) from the other two defendants as well as from the solicitor personally. The third defendants, in their capacity as second third party, likewise claim an indemnity or damages (or both) from the solicitor (now no longer employed by them) as fourth party.

The first defendant has not entered appearance, and a default interlocutory judgment in favour of the plaintiff for damages to be assessed has been entered against it.
The trial has therefore proceeded with only the second and third defendants and the fourth party present.

I begin with an examination of the facts.

The evidence of the plaintiff

The plaintiff`s evidence (given in Cantonese) was this. She was born in 1919. She came to Singapore from China when she was about 11 years old, not having learnt any English there. She had received ten years of education in the Chinese stream in Singapore. At school, she learnt English two or three times a week, but she claimed that her English was poor. After completing her secondary education at the age of 19, she became a primary school teacher and carried on teaching until her retirement in about 1974.

She had a husband, Hoh Sou Yen, and three children:

(a) Hoh May Yin (born around 1952),

(b) Hoh Weng Cheong (born around 1953), and

(c) Hoh Weng Yip (born around 1964).

The property in question, No 64 Lorong 24A, Geylang (which I will call `the property`), is their family home, and was purchased in 1957 in the name of the plaintiff.
In 1973, the plaintiff conveyed the property to Hoh Weng Cheong and Hoh Weng Yip by way of gift. Later, Hoh Weng Cheong married and wished to purchase an HDB apartment. It was therefore necessary for him to divest himself of his interest in the property, and Hoh Weng Cheong and Hoh Weng Yip then conveyed the property to the plaintiff and her husband in 1978, again by way of gift.

In early 1984, the plaintiff`s husband became very ill, and in February he was admitted to Tan Tock Seng Hospital, where he remained until he died on the night of 27 June 1984.
Prior to his death, the title deeds to the property were kept in a safe deposit box in the joint names of the plaintiff and her husband. Around June 1984, the plaintiff took out everything in the safe deposit box, as she knew of a friend who had encountered difficulties in removing her belongings from her safe deposit box after her husband`s death. A few days after she brought the items home, the plaintiff handed the title deeds to Hoh Weng Cheong and asked him to photocopy them as a precaution. Thereafter, she forgot about the deeds until the events of November 1986, which I will describe later.

On 28 June 1984, the day after his father`s death, Ho Weng Cheong approached the plaintiff in her kitchen with two sheets of paper written in English, which he asked her to sign.
Ho Weng Cheong told her that he was in business and that he wanted others to know that he was a man of good character. She was therefore under the impression that what she was signing was a form of testimonial as to her son`s character to help him in his business. She did not understand the documents as they were in English, and she signed her name in Chinese on the two sheets of paper. (The two pages signed by her are reproduced at the end of this judgment.) No one else was present at this meeting.

Contrary to her belief, the two sheets were in fact the last two pages of a mortgage of the property.
The mortgage was purportedly made between the plaintiff and her husband of the first part, the first defendant (which I will call `Sourgrapes`) of the second part and the second defendant (which I will call `OCBC`) of the third part. Under the mortgage (which the plaintiff did not see until much later), the plaintiff and her husband jointly and severally guaranteed the credit facilities to be granted by OCBC to Sourgrapes, and the property was mortgaged to OCBC as security for the guarantors` obligations. Sourgrapes was controlled by Lee Boon Seng, the brother-in-law of Hoh Weng Cheong. (Hoh Weng Cheong was apparently working in Sourgrapes at this time and became a director shortly after the execution of the mortgage, although the plaintiff claimed that she did not know this at the time, or even that her son was involved in Sourgrapes.) Unknown to the plaintiff, Lee Boon Seng had negotiated with OCBC for a line of credit to be granted to Sourgrapes on the security (among other things) of a mortgage of the property, and Hoh Weng Cheong had been asked to secure the signatures of his parents to the engrossed mortgage. The two places where the plaintiff was asked to sign were in fact (i) the execution clause of the mortgage and (ii) the attestation certificate prescribed for mortgages requiring registration in the Registry of Deeds.

Also unknown to the plaintiff at the time, Hoh Weng Cheong, after obtaining her signature to the mortgage, forged his father`s signature.
His parents` purported signatures were then witnessed by the fourth party (whom I will call `the legal assistant`), who also signed the attestation certificate. The legal assistant, who had been retained by Hoh Weng Cheong to act for Sourgrapes in the transaction, then forwarded the mortgage to Messrs Wee Swee Teow & Co, solicitors for OCBC, who advised their clients to release the banking facilities to Sourgrapes. The facilities were also guaranteed by Hoh Weng Cheong and Lee Boon Seng. The plaintiff remained ignorant of all these matters until the events next described.

Sometime around 12 November 1986, the Registrar of Titles wrote to Messrs Wee Swee Teow & Co to advise them that the property was being brought under the provisions of the Land Titles Act (Cap 157).
A copy of this letter was extended to the plaintiff and her husband as owners of the property. When the letter arrived, Hoh May Yin was at home and opened the letter. When she read its contents, she realized that the property had been mortgaged to OCBC, and informed the plaintiff of this. The plaintiff then summoned Hoh Weng Cheong, who was not staying with them. He admitted that he had mortgaged the property to OCBC, and said that they had lost the house because his business (presumably referring to the business of Sourgrapes) had failed.

A few days later, the plaintiff went to the Jurong branch of OCBC (which was the branch in charge of Sourgrapes` account) and met the branch manager, Pang Tee Hiak.
After obtaining his confirmation that the property had been mortgaged to OCBC, the plaintiff queried how her husband`s name could have appeared in the mortgage as he had already passed away. She also told him that she had not knowingly signed the mortgage. Pang Tee Hiak advised her that, since the mortgage had been signed by both mortgagors, OCBC had advanced the credit facilities to Sourgrapes. He also informed her that the amount owing on this account was about $224,000.

She then returned home, and summoned Hoh Weng Cheong again to ask him who had signed her husband`s name.
He admitted that he had forged his father`s signature. He also told her that the legal assistant had `effected` the mortgage for him (which presumably meant that the legal assistant had acted in the mortgage transaction for Sourgrapes).

Some days later, the plaintiff returned to the Jurong branch of OCBC, and told Pang Tee Hiak that she wanted to sell her house to settle the amount owing from Sourgrapes.
He said that he would have to check on this with his superiors. Later, he called her to say that this could be done. Since she had been told that the amount owing on the account was about $224,000, she wanted to sell the house for about $320,000 so as to have enough left over to buy an HDB flat. However, the highest offer she received was only $240,000, and so she did not carry out her plan to sell the property.

In December 1986, she summoned Hoh Weng Cheong, the legal assistant and Lee Boon Seng for a meeting to try and resolve the matter by getting these three persons to pay her compensation of $60,000 each.
The meeting was held at the coffee house of the Hotel Grand Central, but nothing could be discussed because Lee Boon Seng failed to attend the meeting. Another attempt was made at a meeting a few days later at her house, but again Lee Boon Seng did not attend.

As no progress was being made towards a settlement of the problem, the plaintiff then decided to take legal advice.
She went to see a lady lawyer, who obtained a copy of the mortgage, and for the first time the plaintiff saw her own signature and the forged signature of her husband. She then changed lawyers, and briefed her present counsel. On 21 January 1987, she lodged a police report against Hoh Weng Cheong at the Commercial Crimes Division. This led to charges being preferred against Hoh Weng Cheong and Lee Boon Seng for cheating OCBC. Hoh Weng Cheong eventually pleaded guilty, and was sentenced to a term of 18 months` imprisonment on 13 July 1987. Lee Boon Seng claimed trial and, at his trial on 2 May 1989, Hoh Weng Cheong gave evidence on behalf of the prosecution. However, his credit was impeached and, as a result, Lee Boon Seng was...

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