Re Beloff Michael Jacob QC

JurisdictionSingapore
JudgeSundaresh Menon CJ
Judgment Date16 May 2014
Neutral Citation[2014] SGCA 25
CourtCourt of Appeal (Singapore)
Docket NumberCivil Appeals Nos 68, 69, 70 and 71 of 2013
Published date26 June 2014
Year2014
Hearing Date24 February 2014
Plaintiff CounselAurill Kam, Cheryl Siew, Alexander Sim and Jurena Chan (Attorney-General's Chambers),Lee Eng Beng SC, Low Poh Ling, Raelene Su-Lin Pereira and Jonathan Lee Zhongwei (Rajah & Tann LLP),Christopher Anand Daniel and Harjean Kaur (Advocatus Law LLP),Chan Hock Keng, Ong Pei Chin and Lawrence Foo (WongPartnership LLP)
Defendant CounselEdwin Tong, Kenneth Lim, Peh Aik Hin and Tan Kai Liang (Allen & Gledhill LLP)
Subject MatterLegal Profession,Admission,Ad hoc
Citation[2014] SGCA 25
Sundaresh Menon CJ (delivering the judgment of the court):

We heard a set of four appeals against the decision of the High Court judge (“the Judge”) allowing the ad hoc admission of the respondent, Mr Michael Jacob Beloff QC, to practise as an advocate and solicitor in Singapore pursuant to s 15 of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“the LPA”). The application had been made to enable Mr Beloff to represent nTan Corporate Advisory Pte Ltd (“nTan”) in its endeavour to set aside a judgment of the Court of Appeal (“the CA Judgment”) on the grounds that it was infected by lack of jurisdiction and breach of the rules of natural justice.

The CA Judgment is reported as The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appeal [2012] 4 SLR 1182 and it arose out of a dispute over nTan’s entitlement to fees said to be due from TT International Ltd (“the Company”) for work done as its independent financial advisor. This dispute arose in the context of a scheme of arrangement under s 210 of the Companies Act (Cap 50, 2006 Rev Ed) (“the Companies Act”) in respect of debts owed by the Company (“the Scheme”). Although the present application concerns the limited issue of whether Mr Beloff should be admitted pursuant to s 15 of the LPA, it is necessary for context that we first review the underlying dispute, at least in brief terms.

Facts Background: the Scheme and legal proceedings arising from it

The Company was incorporated in Singapore in October 1984 as a private limited company and it was subsequently listed on the Stock Exchange of Singapore in June 2000. It was the main distributor and licensee of the AKIRA brand of electronic products worldwide. The Company encountered financial troubles in 2008, which resulted in its creditors declaring events of default and threatening to commence or actually commencing legal proceedings against it. It was against this backdrop that nTan was appointed as the independent financial advisor to the Company and its subsidiaries by an appointment letter dated 28 October 2008. This letter, read together with another letter from nTan to the Company dated 15 May 2009, stipulated that the fees payable to nTan for its services comprised the time costs of its personnel and that in addition, what was referred to as a value-added fee (“VAF”) would be payable in certain circumstances.

The VAF lies at the heart of the CA Judgment which nTan has applied to set aside. It is a success fee payable to nTan in the event that a scheme of arrangement is entered into by the Company’s creditors and approved by the court. In simple terms, the VAF is a percentage of the total value of debt owed by the Company to its creditors, which is “waived, written off, extinguished, forgiven or avoided” or converted into equity in the Company pursuant to a successful scheme of arrangement. It follows that the greater the value of debt waived or otherwise rendered not payable, the greater the amount of VAF that nTan stood to receive. This is why the VAF has been described as a success fee. As at 14 March 2012 the Company estimated that the VAF came up to $15.2 million, whereas nTan put the amount at between $28.4 million and $31.8 million.

As events transpired the Scheme was proposed and on 29 January 2009 the High Court granted the Company liberty to call a meeting of those of its creditors to which the Scheme was to apply (“the Scheme Creditors”) in order that they might consider the Scheme and, if they thought fit, approve it. According to the Scheme documents, oversight of the Company’s implementation of the Scheme was to be entrusted to the Scheme Manager, identified in the Scheme documents as “Mr Nicky Tan Ng Kuang, Mr Dan Yock Hian and/or Ms Lim Siew Soo”, all of whom were nTan personnel. Mr Nicky Tan is and was the key figure at nTan; he was described as its owner in the CA Judgment at [2].

The meeting of the Scheme Creditors was held on 16 October 2009. Under s 210(3) of the Companies Act, approval of the Scheme required not only that a majority in number of voting Scheme Creditors give their sanction to it, but also that this numerical majority represent “three-fourths in value” of the Scheme Creditors. This latter requirement meant that the Scheme Creditors voting in favour of the Scheme had to hold at least 75% of the total value of debt owed by the Company to those Scheme Creditors who were voting at the meeting. Shortly after 5.00 pm on the day of the meeting, and after the votes had been cast by the Scheme Creditors, they were informed that the final outcome of the voting would be determined only after the Scheme Manager had completed the adjudication of the proofs of debt in order to ascertain whether the 75% threshold had been crossed. Two months later, on 17 December 2009, the Scheme Manager announced the voting results having completed the adjudication of the proofs of debt in the meantime: the required majority of Scheme Creditors had voted in favour of the Scheme. Of note was the fact that the required “three-fourths in value” had been attained by a razor-thin margin – the Scheme Creditors that had voted in favour were adjudicated to hold 75.06% of the total debt owed to the Scheme Creditors that voted at the meeting. It may be useful at this stage to note the following permutations of the ratio of those voting for and against the Scheme based on what was submitted on 16 October 2009 and based on what was adjudicated on 17 December 2009:

Submitted as at 16 October 2009 Adjudicated as at 17 December 2009
Total value of proofs voting, ie, less abstentions $554.70 million $485.39 million
Total value of votes in favour of the Scheme $364.98 million $364.34 million
And as a percentage of the total value of proofs 65.80% 75.06%
Total value of votes against the Scheme $189.74 million $121.05 million
And as a percentage of the total value of proofs 34.20% 24.94%

Based on the outcome of the vote, the Scheme was approved by Judith Prakash J in the High Court on 15 March 2010. However, a number of the Company’s creditors appealed against her decision in Civil Appeals Nos 44 and 47 of 2010 (“the Scheme Appeals”). After hearing arguments on 18 August 2010, the Court of Appeal on 27 August 2010 set aside the approval of the Scheme because certain aspects of the voting procedure and the adjudication of some of the proofs of debt were found to be unsatisfactory. In setting aside the Scheme, the Court of Appeal gave a number of directions, including a direction for a further meeting of the Scheme Creditors to be held within four weeks. That meeting was duly held on 24 September 2010.

Further hearings then took place before the Court of Appeal on 5 and 13 October 2010. At the latter hearing, the Court of Appeal issued brief grounds of decision (“the Brief Grounds”) which declared that the requisite majority of Scheme Creditors had voted in favour of the Scheme at the meeting of 24 September 2010: see [5] of the Brief Grounds. The Court of Appeal proceeded in the Brief Grounds to approve the Scheme, but subject to alterations (as detailed at [8]) which it considered it was empowered by s 210(4) of the Companies Act to make. One of these alterations was in the composition of the Monitoring Committee overseeing the implementation of the Scheme, so as to include in its membership, the three banks that are the appellants in Civil Appeal No 69 of 2013, namely DBS Bank, Habib Bank and Oversea-Chinese Banking Corporation (“the Banks”).

Dispute as to the VAF

The question of nTan’s entitlement to the VAF was first brought to the Court of Appeal’s attention some years later by a letter dated 27 January 2012 addressed to the Supreme Court Registry (“the Registry”) from Rajah & Tann LLP (“R&T”), which was acting for the Monitoring Committee. The letter was copied to Allen & Gledhill LLP (“A&G”), acting for the Scheme Manager (whom A&G identified as Mr Nicky Tan, the chief executive officer of nTan), and to WongPartnership LLP (“Wong”), acting for the Company. The letter alleged that the Monitoring Committee had only “recently” been apprised of the existence of the VAF, and set out the Monitoring Committee’s concern that a success fee of that sort would give rise to “a possible conflict of interest and duty on the part of nTan, in that it was nTan that adjudicated on the debts that were to be admitted for voting on and participating in the Scheme”. The Monitoring Committee then requested that the Court of Appeal direct that the VAF be subject to taxation in accordance with [8(j)] of the Court of Appeal’s Brief Grounds, which provided as follows:

All professional costs (and disbursements) of the Scheme Manager’s and [Company’s] professional advisors incurred after 27 August 2010 shall be taxed by the High Court.

There ensued a chain of correspondence between R&T, A&G, Wong and the Court of Appeal, which eventually culminated in the CA Judgment. For purposes of the present appeals it is not necessary to describe every item of correspondence in detail and we confine ourselves to a broad outline. In response to R&T’s letter, A&G wrote to the Registry on 1 February 2012 setting out the Scheme Manager’s proposal that the Monitoring Committee be required to file and serve a summons setting out the specific directions sought by it, supported by an affidavit, with leave to the Scheme Manager thereafter to file an affidavit in reply. This proposal was not taken up. On 7 February 2012, the Registry wrote to R&T, A&G and Wong conveying the Court of Appeal’s directions that, first, the Scheme Manager and the Company clarify a number of matters pertaining to the VAF, including whether the VAF had been disclosed to any of the Company’s creditors prior to the Court of Appeal’s approval of the Scheme on 13 October 2008; and...

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