Legal Profession

• Author: Khelvin XU1 LLB (Hons) (National University of Singapore); Advocate and Solicitor (Singapore); Partner, Rajah & Tann Singapore LLP.
• Publication year: 2021
• Citation: (2021) 22 SAL Ann Rev 633
• Date: 01 December 2021

I. Introduction

22.1 This review covers:

(a) cases relating to ethics and professional responsibility;2 and

(b) cases relating to the disciplinary framework, procedural matters, and admissions to the Bar.3

II. Duties owed by lawyers to third parties

22.2 Law Society of Singapore v Lee Teck Leng Robson,4 Law Society of Singapore v Jai Swarup Pathak5 and Tan Ng Kuang v Jai Swarup Pathak6 arose out of complaints by two insolvency practitioners (“the JMs”) against the respondent lawyers (“RL” and “JP” respectively). In June 2016, the JMs were approached by RL and JP, who were lawyers for Punj Lloyd Limited (“PLL”). PLL owned and controlled two companies, SEC and PLPL (“the Companies”), and wanted the JMs to act as judicial managers of the Companies.

22.3 The JMs agreed, provided that PLL would deposit $2m with RL and JP's firm (“GDC”) towards the expenses of the judicial management (“Deposit Agreement”). On 27 June 2016, the High Court appointed the JMs as the judicial managers of the Companies.

22.4 In July 2016, JP sent various e-mails to the JMs to confirm that PLL would place a deposit of $500,000 with GBC “towards payment

of the JM fees”7 and referred to the agreed fee of $2m for the JMs. On 17 August 2016, JP e-mailed the JMs to confirm that the first tranche of $250,000 had been received by GDC “and [had] been placed in [GDC's] trust fund for the JM fees”, and that the second tranche of $250,000 was to be expected.

22.5 On 2 September 2016, the JMs' then-lawyers issued a letter of demand to GDC setting out, inter alia, the terms of the Deposit Agreement and requesting payment of the first tranche of $250,000. In response, JP instructed RL to send an e-mail disputing the contents of the letter of demand, stating that GDC was “not a party to any alleged fee arrangement with [the JMs]”8 and would cease to be involved in the fee discussion between the JMs and GDC.

22.6 On 22 September 2016, the JMs' then-lawyers issued another letter of demand for the full sum of $500,000 that GDC had received from PLL. On or around the same day, JP was verbally instructed by PLL that PLL would pay the JMs' fees directly. RL then e-mailed the JMs stating, inter alia, that GDC was “not holding any fee deposit for [the JMs]”.9

22.7 The JMs complained to the Law Society of Singapore (“the Law Society”), who referred the complaint to two review committees (“RCs”). The RCs summarised the complaint as follows:

(a) JP and RL had knowingly deceived the JMs and/or knowingly aided and abetted PLL in deceiving the JMs with regard to the terms of remuneration of their appointment (“the First Complaint”).

(b) JP and RL had aided and abetted PLL in not paying to the JMs a substantial amount of moneys that PLL had placed with them for the express purpose of providing a deposit for the JMs' fees (“the Second Complaint”).

22.8 The RCs dismissed both complaints. The JMs filed for a review of the RCs' decisions. The High Court upheld the RCs' decision to dismiss the First Complaint but quashed the RCs' decision to dismiss the Second Complaint. Two inquiry committees (“ICs”) were constituted, both of which were of the view that no formal investigation by disciplinary tribunals (“DTs”) was required and recommended the dismissal of the Second Complaint. The Law Society accepted the ICs' recommendations.

22.9 The JMs then filed for a review of the ICs' decisions. The High Court found that the JMs had established a prima facie case and ordered the Law Society to apply to the Chief Justice for the appointment of DTs to investigate JP and RL's alleged misconduct. In the DT proceedings, JP and RL were accused of having “assisted or permitted PLL” in a dishonest manner.10

22.10 The DTs made several findings. In particular, the DTs found that there was no breach of r 10(6) of the Legal Profession (Professional Conduct) Rules 2015 (“PCR”), which provides that practitioners must not knowingly assist or permit their clients (a) to mislead a court of tribunal; or (b) to do any other thing which the practitioner considers to be dishonest:

(i) In respect of RL, the DT departed from a previous DT's decision and found that the rule only applied in the context of court/tribunal proceedings. The charges therefore were dismissed as the present scenario did not involve RL representing PLL in such a context.

(ii) In respect of JP, the DT dismissed the charges as this rule was applicable only to foreign lawyers registered under s 36P of the Legal Profession Act11 (“LPA”), but JP was a foreign lawyer registered under s 36C of the LPA.

22.11 The next charge related to whether RL and JP had assisted or permitted PLL in a manner which they considered dishonest or ought to have considered dishonest by not paying to the JMs the deposit received. This gave rise to four issues:

(a) whether there was a Deposit Agreement made between the JMs and PLL (through RL and JP who were representing PLL) that PLL would provide the deposit of $2m towards the costs of managing the Companies under judicial management;

(b) if so, whether RL and JP knew of the Deposit Agreement.

(c) whether RL and JP had received either or both tranches of $250,000 from PLL between 17 August and 8 September 2016 as part of the Deposit Agreement; and

(d) whether RL and JP had assisted or permitted PLL in a manner which RL and JP considered dishonest or ought to have considered dishonest in not paying the two tranches to the

JMs when the JMs had demanded payment through their then-solicitors' letters.

22.12 On the first three issues, the DT found that:

(a) there was a Deposit Agreement;

(b) RL and JP knew or should have known that a Deposit Agreement had been agreed; and

(c) RL and JP knew that GDC had received funds to be held for the JMs' fees.

22.13 On the fourth issue, the DT diverged as between RL and JP. In RL's case, his role was limited to sending various e-mails to the JMs' lawyers, in which he conveyed that (i) GDC would cease to be involved in the fee discussions between the JMs and PLL; (ii) GDC no longer represented PLL in respect of any fee discussion with the JMs; and (iii) GDC was not holding any fee deposit for the JMs.

22.14 During this time, RL was facing a severe problem involving his child and was therefore unable to focus on his work; thus, the contents of the e-mails would have substantially come from JP. There was no evidence that RL knew that (a) the funds received were to be used for payment of GDC's invoices; or (b) PLL did not intend to make payment directly to the JMs. As such, it was not established beyond reasonable doubt that RL had assisted or permitted PLL in a manner which RL considered dishonest or ought to have considered dishonest in not paying the $500,000 for the JMs' fees.

22.15 Turning to JP, the DT reached a different conclusion on the fourth issue:

(a) JP was well aware that the $500,000 placed with GDC was for the specific purpose of the JMs' fees.

(b) JP had given instructions for the $500,000 to be appropriated for GDC's outstanding invoices. However, he should not have assisted or permitted PLL to not pay the $500,000, or used the sum to pay down PLL's outstanding liabilities owing to GDC for other work done.

(c) JP had played a part in misleading the JMs as to the true state of affairs. He did not tell the JMs that GDC was no longer holding the $500,000 as a deposit for the JMs' fees, and did not correct an untrue statement made by PLL's representative that PLL had placed such a deposit. There was a need for JP to inform the JMs about the change in the situation.

(d) To aggravate matters, the funds were used to pay GDC's invoices. PLL was insolvent at this point, and JP played a role in extracting these funds for the JMs' fees by issuing sham invoices. In the end, PLL did not pay the JMs anything.

22.16 The DT therefore held that JP was guilty of misconduct unbefitting a regulated foreign lawyer as a member of an honourable profession under s 83A(2)(g) of the LPA, in so far that his word should have been his bond, and other professionals like the JMs should be able to rely on his word that GDC would hold the money received for the JMs' fees. The DT determined, pursuant to s 93(1)(c) of the LPA, that a cause of sufficient gravity for disciplinary action existed under s 83A of the LPA.

22.17 The JMs then applied to the Court of Three Judges for disciplinary action against JP. The Court of Three Judges affirmed the DT's finding on the first three issues. However, in a twist, the Court of Three Judges held that JP had not been dishonest and set aside the DT's finding that JP was guilty of such misconduct.

22.18 In considering the issue of dishonesty, the Court of Three Judges considered whether JP had “assisted or permitted” PLL to act in a manner he considered dishonest or “ought to have considered dishonest” by not paying the sum of $500,000 to the JMs:

(a) The JMs' case was that even if the decision to use the $500,000 sum for PLL's outstanding invoices with GDC had emanated from PLL, JP should have informed the JMs that the $500,000 sum was no longer designated for the original purpose of the Deposit Agreement. However, this would require JP to flout his duty of confidentiality to his client, PLL.

(b) The question was whether JP owed any duties to the JMs in the first place. Under r 8 of the PCR, JP owed some duties to the JMs, such as the duties of honesty, courtesy and fairness. However, apart from these duties, JP did not owe any legal or ethical duty to serve the JMs' interests.

(c) In contrast, JP owed the duties of confidentiality and loyalty to his client, PLL. If PLL had instructed JP that it intended to breach the Deposit Agreement and to use the $500,000 sum to pay its outstanding invoices with GDC, JP had a duty to maintain the confidentiality of this instruction, which was not overridden by his duties to the JMs.

(d) The charge against JP was that he was...