Tan Ng Kuang v Jai Swarup Pathak

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JCA,Steven Chong JCA,Woo Bih Li JAD
• Judgment Date: 14 October 2021
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 2 of 2021

Tan Ng Kuang and another

and

Jai Swarup Pathak

[2021] SGHC 232

Andrew Phang Boon Leong JCA, Steven Chong JCA and Woo Bih Li JAD

Originating Summons No 2 of 2021

Court of Three Judges

Legal Profession — Disciplinary proceedings — Regulated foreign lawyer purportedly agreed, on behalf of his client, with the judicial managers of two companies to deposit sum of money with the lawyer's law firm to fund the judicial managers' fees — Charge in disciplinary proceedings alleged that regulated foreign lawyer assisted or permitted his client to act in manner he considered dishonest or ought to have considered dishonest by not paying the judicial managers the deposit money when the latter demanded for it — Whether due cause had been shown that regulated foreign lawyer was guilty of charge — Whether regulated foreign lawyer had acted in manner he considered dishonest or ought to have considered dishonest

Held, dismissing the application:

Was there a Deposit Agreement?

(1) Having carefully considered the evidence, the Court of Three Judges was unable to accept Mr Pathak's submission that there was no concluded Deposit Agreement and that the S$500,000 sum received by Gibson Dunn was instead merely a “good faith deposit” by PLL. The contemporaneous objective record showed that Mr Pathak had unequivocally confirmed that there was an agreement by PLL to deposit S$2 million with Gibson Dunn for the judicial managers' fees: at [42].

(2) While the DT4A's finding was that the S$2 million sum was for the “costs of the Companies under judicial management”, the contemporaneous objective record showed that the specific agreement was not that the S$2 million deposit would be used for the costs of the judicial management, but that it would be used for the judicial managers' fees instead: at [42].

Knowledge and receipt

(3) It was clear from Mr Pathak's e-mails that Mr Pathak knew of the Deposit Agreement, as he had repeatedly used explicit terms to “confirm” that the “trust” deposit of S$2 million had been placed with Gibson Dunn by PLL for the “JM fees”: at [48].

(4) The clear terms of Mr Pathak's own e-mails demonstrated that the two tranches of S$250,000 had been received by Gibson Dunn as part of the Deposit Agreement for the judicial managers' fees: at [50] and [51].

Dishonesty

(5) A lawyer was not a mere “legal mercenary” or a “hired gun”. Mr Pathak owed a duty to the applicants under r 8(3) of the Legal Profession (Professional Conduct) Rules 2015 (“PCR”) “not [to] take unfair advantage of any person” and not to act towards any person “in a way which [was] fraudulent, deceitful or otherwise contrary to the legal practitioner's position as a member of an honourable profession”. As the applicants were unrepresented, Mr Pathak also owed a duty under r 8(2) of the PCR to decline to give the applicants legal advice and to “take reasonable steps” to ensure that the applicants were not under the impression that their interests were protected by Mr Pathak. In this case, it was never the applicants' case that Mr Pathak had breached r 8 of the PCR, so there was no basis to conclude that there had been such a breach: at [55] to [57].

(6) Mr Pathak was not the applicants' counsel. Beyond the duties under r 8 of the PCR, Mr Pathak did not owe any legal or ethical duty to serve the applicants' interests: at [58].

(7) On the other hand, Mr Pathak had a fundamental legal and ethical duty to maintain and protect the confidentiality of PLL's instructions and intended course of action. If PLL had instructed Mr Pathak that it intended to breach the Deposit Agreement and to use the S$500,000 sum to pay its outstanding invoices with Gibson Dunn instead, Mr Pathak had a duty to maintain the confidentiality of this instruction. Mr Pathak's duties owed to the applicants did not override his fundamental duty of confidentiality to his client, PLL. Thus, the Court of Three Judges rejected the applicants' submission that, even if the decision to use the S$500,000 sum for PLL's outstanding invoices with Gibson Dunn had emanated from PLL, Mr Pathak should have informed the applicants that the S$500,000 sum was no longer designated for the original purpose of the Deposit Agreement: at [54] and [63].

(8) A lawyer, as a fiduciary to his client, also owed a duty of “unflinching loyalty” to his client. This buttressed the foregoing point that it could not be right that Mr Pathak had a duty to inform the applicants that the S$500,000 sum was no longer being deposited with Gibson Dunn for the purpose of the Deposit Agreement: at [64] and [65].

(9) The impugned act in Charge 1A was the act of “not paying each of the tranches [of S$250,000] to the [applicants] when [they] made a written demand for them”. There could be no dishonesty on Mr Pathak's part in not paying the S$500,000 sum to the applicants if he had no duty to do so in the first place. That was clearly the situation in this case, as there was no obligation on Mr Pathak's part in September 2016 to transfer the S$500,000 sum to the applicants. Mr Pathak's obligation in September 2016, pursuant to the Deposit Agreement, was to hold the S$500,000 sum as a deposit for the judicial managers' fees, and to only pay them to the applicants when their fees as judicial managers had been raised for payment. Therefore, Charge 1A was clearly unsustainable and was set aside: at [68] to [69].

[Observation: In the e-mail correspondence, Mr Pathak had used the term “trust” extensively to describe the money deposited with Gibson Dunn by PLL. While it was not the applicants' case that the S$500,000 sum was held on trust, and it was Mr Pathak's prerogative to run his case in whatever manner he chose, it was inconsistent with Mr Pathak's standing as a senior lawyer who was a member of an honourable profession that he had attempted to resile from the clear terms of his own e-mails and run a case in these disciplinary proceedings that the S$500,000 sum was merely a “good faith” deposit. Nevertheless, since it was not the applicants' case that the S$500,000 sum was held by Mr Pathak on trust for the applicants, the Court of Three Judges did not say any more on this matter: at [44] to [46].

The overarching duty of a lawyer was to serve not merely his client but also the administration of justice and fairness generally (including a duty, in appropriate circumstances, to the court). Thus, even in a civil context, while a lawyer had a duty to serve his client's interests, including complying with a client's instructions to breach a contract, that was subject to the following important caveats: at [86].

Absent criminal behaviour or any conduct that gave rise to a civil claim against the lawyer himself (for example, dishonest assistance of a breach of trust or the tort of inducement to breach a contract), a lawyer did not act “dishonestly” or in a manner that was “unbefitting” a lawyer if that lawyer was complying with the client's instructions to facilitate a breach of contract or other private obligation, as a lawyer had a duty to his client to act with undivided loyalty: at [87] and [94(a)].

A lawyer was also not ethically obliged to “whistle-blow” on his client to an opposing party (for example, by informing the opposing party that the lawyer's client was intending to breach a private obligation vis-à-vis the opposing party), as this would contravene the lawyer's own legal and ethical obligations of confidentiality and loyalty to his own client: at [58] to [65] and [94(b)].

When a lawyer's client wished to breach a private obligation, the lawyer should seek to properly advise and dissuade the client from committing such a breach: at [87], [88] and [94(c)].

Generally, the lawyer should also not be the party to suggest to the client to commit the breach of the client's contractual or other private obligation: at [89] and [94(d)].

Generally, the lawyer should not be involved in assisting or committing the client's breach of the latter's private obligation: at [90] to [92] and [94(e)].

If a lawyer's client insisted on committing any acts which would require the lawyer to act in a manner that was dishonest or unbefitting a member of an honourable profession, the lawyer should apply to discharge himself as counsel for the client: at [93] and [94(f)].

Thus, in this case, it would have been a very different situation if the idea to change the purpose of the S$500,000 deposit had come from Mr Pathak himself. If so, Mr Pathak would, at least, had been guilty of a breach of r 5(2)(j) of the PCR and misconduct unbefitting a regulated foreign lawyer under s 83A(2)(g) of the LPA. However, that was not how the case was run against Mr Pathak before the DT4A. Therefore, the Court of Three Judges did not pursue this issue further: at [95], [96], [101] and [102].

While the parties did not address the Court of Three Judges on Charges 2AA and 2BB, the court observed that those charges might not be made out as well, as the alleged acts of dishonesty in those charges were also not made out: at [103] to [106].]

Case(s) referred to

China Coal Solution (Singapore) Pte Ltd v Avra Commodities Pte Ltd [2020] 2 SLR 984 (refd)

Ho Yew Kong v Sakae Holdings Ltd [2018] 2 SLR 333 (refd)

Law Society of Singapore v Amdad Hussein Lawrence [2000] 3 SLR(R) 23; [2000] 4 SLR 88 (refd)

Law Society of Singapore v Chong Fook Choon @ Ronnie Chong [1998] SGDSC 1 (refd)

Law Society of Singapore v Choy Chee Yean [2010] 3 SLR 560 (refd)

Law Society of Singapore v Ezekiel Peter Latimer [2019] 4 SLR 1427 (refd)

Law Society of Singapore v Jasmine Gowrimani d/o Daniel [2010] 3 SLR 390 (folld)

Law Society of Singapore v Lim Cheong Peng [2006] 4 SLR(R) 360; [2006] 4 SLR 360 (folld)

Law Society of Singapore v Manjit Singh s/o Kirpal Singh [2015] 3 SLR 829 (folld)

Law Society of Singapore v Ng Chee Sing [2000] 1 SLR(R) 466; [2000] 2 SLR 165 (distd)

Law Society of Singapore v Tan Buck Chye Dave [2007] 1 SLR(R) 581; [2007] 1 SLR 581 (refd)

Law Society of...