Lim Meng Chai v Heng Chok Keng and Another

• Jurisdiction: Singapore
• Judge: Chan Seng Onn JC
• Judgment Date: 20 February 2001
• Neutral Citation: [2001] SGHC 33
• Court: High Court (Singapore)
• Published date: 26 March 2013
• Year: 2001
• Plaintiff Counsel: Tan Phuay Khiang and Tan Shiew Hwa (Tan Loh & Wong)
• Defendant Counsel: V K Rai (V K Rai & Partners)
• Citation: [2001] SGHC 33

JUDGMENT:

Grounds of Judgment

1. The defendant, Mdm Heng Chok Keng (Mdm Heng), applied for an order of committal for contempt of court against the plaintiff, Mr Lim Meng Chai (Mr Lim), and the respondent, Mr Krishna Bhaktavatsalu (Mr Krishna). At the hearing, the application against Mr Lim was withdrawn but that against Mr Krishna proceeded.

2. I found that Mr Krishna had committed contempt of court and imposed on him a total imprisonment term of 4 months. I now give my reasons.

Background

3. Mr Krishna, the sole proprietor of Krishna & Co, was the solicitor acting for Mr Lim in his divorce petition filed sometime in July 1998. The marriage of Mr Lim and Mdm Heng was eventually annulled in May 1999. In January 2000, Originating Summons No. 116 of 2000 was taken out by Mr Krishna on behalf of Mr Lim for the property known as Block 819 Yishun Street 81 #04-672 (the flat) and jointly owned by the ex-spouses to be sold, and the net proceeds of the sale to be dispersed solely to Mr Lim.

4. By a deed of settlement made on 11 May 2000, Mr Lim and Mdm Heng agreed, inter alia, that:

(a) The flat would be sold on the open resale market;

(b) Mr Lim would have conduct of the sale;

(c) Krishna & Co would hold the net proceeds of sale as stakeholder;

(d) Subject to payment of legal costs, the stakeholding monies together with interest accrued thereto would be utilised solely for the purpose of paying off the mortgage loan due to MBf Finance Berhad (MBF).

5. Mr Krishna attested the signature of Mr Lim on the deed. Being the solicitor advising Mr Lim on the deed, he ought to know his obligations as a stakeholder and to whom he had to pay over the stakeholding monies.

6. When the sale of the flat was completed, Krishna & Co, being the conveyancing solicitors, received a cheque dated 6 June 2000 for S$101,454.19. In a letter dated 20 July 2000, Krishna & Co advised the parties that there was a balance sum of S$87,789.09 in the clients account after certain agreed deductions.

7. However, Krishna & Co failed to release the stakeholding monies despite several written reminders (dated 24 August 2000, 31 August 2000 and 8 September 2000) from Mdm Hengs solicitors, Tan Loh & Wong (TLW). On 18 September 2000, Mr Krishna informed Mr Tan Shiew Hwa (Mr Tan), the solicitor from TLW handling the matter for Mdm Heng, that Mr Lim had refused to give him the authority to release the stakeholding monies and instead wanted Mr Krishna to release the monies to him. On the same day, TLW wrote to Krishna & Co stating that his client had wilfully breached the terms of the deed and they would be taking out proceedings against his client.

8. On 26 September 2000, TLW applied under Summons-in-Chambers No. 603944/00 (SIC) for the following orders:

1. A declaration that the stakeholding monies for the sum of S$87,789.09 together with interest accrued thereto (collectively called "the said sum") being the net sale proceeds in respect of [the flat] shall be utilised solely for the purpose of paying off the mortgage loan due to [MBF];

2. That the stakeholders namely, M/s Krishna & Co do forward forthwith to [TLW] the cheque for the said sum to be made in favour of [MBF] for [TLW] to forward the same to the Malaysian firm of solicitors acting for the Mortgagors and Mortgagees in the redemption of the mortgage loan in respect of the Malaysian property known as No. 3, Jalan Cenderai 22, Taman Perindustrian Kota Putri, 81750 Johor Bahru;

3. .

(Emphasis is mine.)

9. On 3 October 2000, Mr Lim appointed Myintsoe Mohamed Yang & Selvaraj to act for him in place of Krishna & Co. After that, Thomas Tham & Partners acted for him. However at the hearing of the SIC before Lai Siu Chiu J on 11 October 2000, Mr Lim discharged his solicitors and acted in person. Mr Tan applied orally to amend prayer 2 of the SIC. I noted that the words or its equivalent in Malaysian Ringgit (the oral amendments) were penned on the SIC in the court file after the words the said sum in prayer 2 of the SIC. From the handwriting, it appears to me that the judge wrote those words herself on the SIC following Mr Tans oral application to amend the SIC.

10. After the hearing, TLW immediately informed Krishna & Co vide a letter dated 11 October 2000 that Lai J had granted an order in terms of all the prayers in their clients SIC and that the sealed copy of the order of court would be served on them once it was extracted.

11. On the next day, TLW wrote to Krishna & Co enclosing a copy of the letter signed by the ex-spouses, where they jointly gave their irrevocable authority and directed Krishna & Co to release forthwith the net sale proceeds of the flat together with interest accrued to TLW. In the letter, both ex-spouses agreed to indemnify Krishna & Co against all claims, proceedings, suits or actions arising from their acting on their instruction to release the said sum to TLW. TLW requested for the release to them of the cheque for the stakeholding monies by 4.00 p.m. in exchange for the original of the aforesaid letter of authority and indemnity.

12. On the same day, Krishna & Co replied requesting for reasonable notice of at least 48 hours for verification of the document and confirmation that they would not be liable to any party in respect of the release of the stakeholder sum. They said that they would revert the next day and asked for a copy of the order of court. Mr Krishna signed that letter.

13. Subsequently, TLW extracted the court order as an order by consent in the following terms:

1. Order in terms for Prayer 1;

2. Order in terms for Prayer 2 as orally amended by Counsel for the Defendant; and

3. Costs to Defendant payable by the Plaintiff agreed at S$2,500.

14. On 18 October 2000 at 5.40 p.m., TLW served on Krishna & Co their letter enclosing the duly sealed order of court and a copy of the SIC. In that letter, attention was drawn to the amendments made to prayer 2 of the SIC, for which Lai J had granted leave. The specific amendments allowed were unambiguously set out and highlighted in that letter. By now, there was no question that Mr Krishna was personally aware of the full terms and ambit of the order made by Lai J.

15. That letter further made reference to a telephone conversation between Mr Krishna and Mr Tan, where Mr Krishna indicated that he preferred to make a telegraphic transfer (TT) to MBF the equivalent of the said stakeholding monies in Malaysian Ringgit because of the Malaysian foreign exchange control policy. Mr Tan said that he had no objections provided that Mr Krishna made the TT within the next 48 hours, and the copy of the TT slip and the statement of account with the relevant copies of the bank statement or deposit slips showing the fixed deposit facility and accrued interest earned were furnished to them.

16. On 20 October 2000, Mr Tan made four unsuccessful attempts between 9.00 a.m. till 5.45 p.m. to reach Mr Krishna on his office telephone. After expiry of the 48 hours, TLW wrote a letter dated the same day stating that both Mr Lim and Mdm Heng required him to hand over the stakeholding monies, and gave notice that unless they received their firms cheque for the stakeholding monies plus accrued interest by 11.30 a.m. on 21 October 2000, they would report to the relevant bodies on the matter.

17. Finally at about 11.15 a.m. on 21 October 2000, Mr Tan managed to speak to Mr Krishna by which time the 48 hours had expired. Mr Krishna said that he had uplifted the fixed deposit in respect of the stakeholding monies. (The significance of this would only be apparent later). However, Mr Krishna told Mr Tan for the first time that he was not prepared to release the cheque for the stakeholding monies together with the accrued interest as directed by the court order unless TLW gave his firm a letter of indemnity because a creditor of his ex-client, Mr Lim, had served him a garnishee order to show cause. Mr Tan then pointed out to Mr Krishna that the judgment debtor in the garnishee order was neither his ex-client Mr Lim nor the ex-spouse Mdm Heng, but one Creative Ceiling Design & Contracts. It was further pointed out to Mr Krishna that both the ex-spouses had given their written irrevocable authority to Mr Krishna to release the stakeholding monies to TLW and they also had given to him their written indemnity in respect of his acting on their written authority.

18. TLW followed up with another letter dated 21 October 2000 setting out the telephone conversations between Mr Tan and Mr Krishna. TLW put Mr Krishna on notice in the letter that the ex-spouses were relying on the stakeholding monies to complete the sale and redemption of their Malaysian property fixed on 11 November 2000. As Mr Krishna had told Mr Tan that he had uplifted the fixed deposit in respect of the stakeholding monies, TLW specifically asked for a copy of their initial letter addressed to the bank to place the stakeholding monies on fixed deposit, the relevant fixed deposit slips and their letter addressed to the bank instructing them to uplift the said fixed deposit facility and the banks statement showing the interest earned thereon. This was of considerable significance on the subsequent issue of whether Mr Krishna was mistaken about the details of this alleged fixed deposit as he had claimed. The constant reminders sent to Mr Krishna to furnish these documents, I believe, would have made it extremely improbable for Mr Krishna to be mistaken about this alleged fixed deposit and its uplifting.

19. TLW warned him that they were in the midst of taking their clients instructions on commencement of contempt proceedings in respect of Lai Js order dated 11 October 2000. As Mr Krishna had told Mr Tan that he would be making an application to the court, presumably an Interpleader Summons on the stakeholding monies, TLW asked to have by 2.30 p.m. on 23 October 2000 either the copies of their court application or alternatively their firms cheque, failing...