Tan Ng Kuang and another v Jai Swarup Pathak

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JCA
• Judgment Date: 14 October 2021
• Neutral Citation: [2021] SGHC 232
• Court: Court of Appeal (Singapore)
• Docket Number: Originating Summons No 2 of 2021
• Published date: 20 October 2021
• Year: 2021
• Hearing Date: 05 August 2021
• Plaintiff Counsel: Tan Chuan Thye SC, Chew Xiang and Ou Wai Hung Shaun (Rajah & Tann Singapore LLP)
• Defendant Counsel: Cavinder Bull SC, Kong Man Er, Sam Yi Ting (Drew & Napier LLC) (instructed), Thio Shen Yi SC, Chua Han Yuan Kenneth and Hannah Alysha binte Mohamed Ashiq (TSMP Law Corporation)
• Subject Matter: Legal Profession,Disciplinary proceedings
• Citation: [2021] SGHC 232

Andrew Phang Boon Leong JCA (delivering the judgment of the court): Introduction

This is an application made by Mr Nicky Tan Ng Kuang (“Mr Nicky Tan”) and Ms Lim Siew Soo (“Ms Lim”) (collectively, the “applicants”), the judicial managers of two companies, Punj Lloyd Pte Ltd (“PLPL”) and Sembawang Engineers and Constructors Pte Ltd (“SEC”) (collectively, the “Companies”), for disciplinary action against the respondent, Mr Jai Swarup Pathak (“Mr Pathak”), a regulated foreign lawyer who has been the Partner-in-Charge of Gibson, Dunn & Crutcher LLP’s (“Gibson Dunn”) Singapore office and the Pacific Asia region since 2008.

Mr Pathak was convicted by Disciplinary Tribunal No 4A of 2020 (“DT4A”), consisting of Ms Molly Lim SC and Ms Peng Pheng Lim, of one charge of misconduct unbefitting a regulated foreign lawyer as a member of an honourable profession under s 83A(2)(g) of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“LPA”) for his role in assisting or permitting his client, Punj Lloyd Limited (“PLL”), to act in a manner he considered dishonest or ought to have considered dishonest. The charge stipulates that this was so because Mr Pathak failed to pay the applicants two tranches of S$250,000 deposited by PLL with Gibson Dunn when the applicants made written demands on 2 September 2016 for payment of the first tranche of S$250,000 and on 22 September 2016 for payment of the total sum of S$500,000. The DT4A determined that a cause of sufficient gravity for disciplinary action exists, and the applicants brought this application for an order that a penalty of between S$50,000 and S$100,000, the maximum financial penalty permitted under s 83A of the LPA, be imposed on Mr Pathak.

The present proceedings raise the important issue as to when a lawyer’s duty to his or her client is superseded by an overriding as well as countervailing duty that is owed to a third party. Much would depend on the precise facts and circumstances of the case. In the context of the present case, one significant issue that arises is whether the lawyer’s client owed legal obligations to that third party to begin with – absent which, that is the end of the matter.

Assuming that the issue just stated is answered in the affirmative, a closely related issue that arises relates to the circumstances under which the lawyer would be held to have been dishonest in withholding information from a third party of a contemplated breach by the lawyer’s client of the latter’s legal obligations vis-à-vis the third party (in this case, a contemplated breach of contract). In this last-mentioned regard, there are at least two sub-issues that would need to be considered.

The first relates to the precise scope of the legal obligations that have arisen between the lawyer’s client on the one hand and the third party on the other.

The second – and closely related – sub-issue is whether the charge proffered against the lawyer encompasses these obligations and, even if they do, whether, in withholding information of a possible breach of such obligations, the lawyer is guilty (beyond a reasonable doubt) of the offence charged based on the evidence of what the lawyer actually did. It bears reiterating that the precise facts and circumstances are therefore of the first importance. It should also be noted that, whilst the findings of fact of the Disciplinary Tribunal will not be departed from easily, this presupposes that such findings of fact are relevant to the elements of the charge themselves – a point to which we shall return below. It is also axiomatic that such findings of fact can also be departed from if they are against the weight of the evidence.

With these preliminary observations, let us now turn to the background to the present proceedings and the issues that arise for decision therefrom.

Facts and procedural history

We will first set out a brief overview of the factual background, and will set out our detailed analysis of the relevant written record later in the judgment.

The parties

The applicants are insolvency practitioners with nTan Corporate Advisory Pte Ltd. The respondent, Mr Pathak, is a regulated foreign lawyer registered under s 36C of the LPA. According to Mr Pathak’s affidavit of evidence-in-chief (“AEIC”) in the disciplinary proceedings, he has been in legal practice for over 35 years, and he has acted for, inter alia, governments, financial institutions and multinational companies in cross-border corporate work in various jurisdictions such as the United States, Europe and China.

The present proceedings arise out of the applicants’ complaints filed in April 2018 relating to their fees as judicial managers of the Companies. The applicants had acted as the judicial managers of the Companies from 27 June 2016 to 7 August 2017 when the Companies were wound up. At the material time from June 2016 to November 2016, Mr Pathak and Mr Robson Lee (“Mr Lee”) from Gibson Dunn acted for PLL. PLL is a company listed in India and the sole shareholder of PLPL, which in turn was the sole shareholder of SEC. PLL’s chairman was one Mr Atul Punj (“Mr Punj”).

27 June 2016 judicial management applications and meeting

On 16 February 2016, the Companies filed applications to be placed under judicial management (“JM Applications”). The applicants claim that, on 16 June 2016, they verbally conveyed that PLL would have to provide S$2 million to fund the costs of managing the Companies whilst under judicial management (“JM”) and to enable the judicial managers to “change the narrative” in respect of PLL and Mr Punj (“Deposit Agreement”). The applicants then provided Gibson Dunn with their Consent to Act as judicial managers of the Companies on 17 June 2016.

The hearing of the JM Applications was conducted on 27 June 2016 (“27 June Hearing”), and the applicants were appointed as the judicial managers of the Companies by the High Court on that day. After the 27 June Hearing, there was another meeting in the afternoon of 27 June 2016 among Mr Pathak, Mr Lee from Gibson Dunn, the applicants and Mr Punj (“27 June afternoon meeting”).

It is the applicants’ pleaded case that, during the 27 June afternoon meeting, the applicants “met with Mr Punj, Mr Pathak and Mr Lee, and Mr Punj verbally agreed to put the S$2 million towards the costs of managing the Companies whilst under judicial management and to help change the narrative in respect of PLL and Mr Punj”. Specifically, the applicants clarified in their further and better particulars that this so-called verbal agreement was concluded “by conduct” during the 27 June Hearing and confirmed verbally by Mr Punj at the 27 June afternoon meeting held in Gibson Dunn’s office.

Emails leading up to letters of demand

On 14 July 2016, Mr Pathak emailed the applicants to confirm that “[PLL] will be placing SGD 500k with us [ie, Gibson Dunn] towards payment of the JM fees”. Ms Lim then replied on 15 July 2016 to note that the terms to fund the deposit for the judicial managers’ remuneration, which had been agreed prior to the acceptance of such an appointment, were not reflected in the 14 July 2016 email from Mr Pathak. The applicants, Mr Punj and Mr Pathak then met on 19 July 2016 at Four Seasons Hotel, where the applicants allegedly informed Mr Punj that they needed “a representation from him regarding our fee arrangements”, and Mr Punj allegedly “agreed to do so by 21 July 2016”.

Then, on 27 July 2016, Mr Pathak emailed the applicants. The first paragraph of the email referred to an agreed fee of S$2 million for the judicial managers and a success fee of S$1 million to be paid in kind in the form of SEC shares. The second paragraph of the email stated that, “[w]ith respect to the issue of the trust deposit of the SGD Two Million with us, I confirm that the initial SGD 250k has been invoiced by us to PLL and we expect to receive these funds this month”, and that an additional S$250,000 would be received in August.

On 17 August 2016, Mr Pathak emailed the applicants to confirm that the first tranche of S$250,000 had been received by Gibson Dunn “and [had] been placed in our trust fund for the JM fees”, and that the next tranche of S$250,000 was to be expected.

2 and 22 September 2016 letters of demand

On 2 September 2016, the applicants’ then-lawyers from Tan Kok Quan Partnership (“TKQP”) issued a letter to Gibson Dunn. This letter had set out the purported terms of the Deposit Agreement and stated that, in light of PLL’s possible inability to honour the Deposit Agreement, the applicants were intending to file a costs application in court to determine their remuneration and expenses. The letter appended a draft affidavit for the costs application to give Mr Pathak “an opportunity to comment and respond to these paragraphs of the affidavit”. In the meantime, the letter requested Gibson Dunn to pay the first tranche of S$250,000 which it had received from PLL to TKQP’s clients’ account.

In response to this letter, Mr Pathak instructed Mr Lee to send an email on the same day (“2 September Email”) stating that Gibson Dunn disputed the contents of TKQP’s letter and the draft affidavit, and that Gibson Dunn was “not a party to any alleged fee arrangement with [the applicants]”. The 2 September Email also stated that PLL had instructed that Gibson Dunn “shall cease to be involved in any communications or have any role as regards any fee discussion or arrangement between [the applicants] and PLL” and that “[the applicants] or [TKQP] should henceforth write directly to [PLL] in respect of any fee matter. [Gibson Dunn] shall no longer be involved in this matter of fee discussion or arrangement”.

TKQP responded on 2 September 2016 to state that they had taken note of Gibson Dunn’s comments and had amended the draft affidavit, and further sought PLL’s comments. In response, Mr Lee sent an email on 5 September 2016 reiterating that Gibson Dunn no longer represented PLL in...