The Law Society of Singapore v Wong Kai Kit

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 03 December 1993
• Neutral Citation: [1993] SGHC 287
• Citation: [1993] SGHC 287
• Defendant Counsel: YR Jumabhoy (B Mohan Singh & Co), SB Shah (SB Shah) and M Dass (M Dass & Co)
• Published date: 19 September 2003
• Plaintiff Counsel: Yang Lih Shyng and James Lau Oon Beng (Koh & Yang)
• Date: 03 December 1993
• Docket Number: Originating Summons No 1062 of
• Court: High Court (Singapore)
• Subject Matter: Professional conduct,Legal Profession,Whether matters outside an original complaint can form the subject matter of disciplinary proceedings,Solicitors' Account Rules 1985,Obligation to give notice to the advocate and solicitor under s 86(6),ss 83, 84, 85 & 86 Legal Profession Act (Cap 161, 1990 Ed),Breach,Unauthorized use of funds from clients' account,Client account,Solicitors' Account (Deposit Interest) Rules 1970,Validity of charges

(delivering the grounds of judgment of the court): In 1987 the respondent, then an advocate and solicitor of 12 years` call practising as the sole proprietor of KK Wong & Co, acted for Kimly Construction Pte Ltd (`Kimly`) in the sale of their property, a unit in Shenton House. Upon completion, which occurred on 13 November 1987, the respondent informed Kimly that the balance of the sale proceeds due to Kimly was $239,898.78. He sent a copy of his bill in respect of the sale to Kimly. However it was only after repeated demands and an AR Registered demand from Kimly`s new solicitors that the respondent paid to Kimly the following sums: $25,000 on 22 December 1988, $35,000 on 18 January 1989 and finally, the balance of $179,898.78 on 14 November 1989.

By a letter dated 24 January 1990, Kimly complained to the Law Society of the respondent`s conduct when he acted for them in the sale of their property in 1987. The letter set out the matters stated above and stated that the respondent had not paid to Kimly any interest upon the said sums in respect of the period of retention.

On 12 February 1990 an inquiry committee was appointed to hear and investigate Kimly`s complaint. On 8 May 1990 it recommended a formal inquiry by a disciplinary committee. The Law Society formulated five charges against the respondent and on 27 August 1990 a disciplinary committee was appointed to investigate into these five charges. It found on 12 October 1992 that the first and second charges were made out and that cause of sufficient gravity existed under s 83 of the Legal Profession Act (Cap 161) (`LPA`). The Law Society took out an application to show cause and the High Court ordered the respondent to show cause why he should not be dealt with under s 83 of the LPA. In this way the parties came before us.

The charges against the respondent were that:

Sometime between 13 November 1987 and 14 November 1989, while acting as solicitors for Kimly Construction Pte Ltd in the sale of their property at No 3, Shenton Way, #10-07, Shenton House, Singapore,

(1) You did pay or cause to be paid to yourself or to Messrs KK Wong & Co, the firm of which you were at all material times sole proprietor, sums totalling $239,898.78 out of the firm`s client account which payments were made in circumstances other than as permitted by Rule 7(a) of the Solicitors` Accounts Rules 1985 and you have thereby contravened s 83(2)(j) of the Legal Profession Act 1990 (`the Act`) ...

(2) You did, on or about 14 November 1989, pay or cause to be paid out of the client account of the firm to Kimly Construction Pte Ltd a sum of $179,898.78 in circumstances other than as permitted by Rule 7(a) of the Solicitors` Accounts Rules 1985, and you have thereby contravened s 83(2)(j) of the Act.

The first charge

Factually the respondent`s case on the first charge was that there had been a joint venture between himself and Kimly, in which they had agreed that Kimly would develop a piece of property in Dunearn Road which was owned by the respondent. He maintained that the proceeds from the sale of Kimly`s unit in Shenton House were paid out to himself from Kimly`s client account between August 1987 and January 1988 as part payment for the purchase price of his Dunearn Road property.

Witnesses for Kimly said that there had been no such joint venture. The disciplinary committee was satisfied beyond a reasonable doubt that this was so. It was found that the property in Dunearn Road and the property in Shenton House were the subject matter of two completely separate transactions. There was no written joint venture agreement even though the respondent was an experienced solicitor conversant with joint ventures. Also the disciplinary committee found the respondent to be a wholly unconvincing witness. We saw no reason to disturb any of these findings. While there was some evidence that the respondent was to acquire an interest in the development upon the Dunearn Road property once it was completed, we suggested to counsel that this did not constitute a joint venture. Counsel for the respondent replied that perhaps it was not a joint venture in the strict sense. However, in our view, it was not a joint venture in any sense. There was no agreement as to the sharing of profits and losses.

In any case, whether or not there was in law a joint venture between Kimly and the respondent, the real issue in respect of the first charge was whether the respondent had been justified in taking for himself moneys in Kimly`s client account that constituted the proceeds of sale of a distinct property, the Shenton House unit, that had no apparent connection with the property which was the subject matter of the alleged joint venture, the Dunearn Road property.

Counsel for the respondent pointed out that the respondent and Kimly had had a long course of dealing with each other and enjoyed a special relationship of informality such that oral instructions would often be given and accepted. He further asserted that Kimly had not made any request or demand for the proceeds of sale of the Shenton House unit at any time for 18 months after he had written to inform them of completion and sent them a completion account. It was in these circumstances that he had given Kimly possession of his Dunearn Road property for development. The only inference, he said, that could be drawn from this was that Kimly was fully aware of an agreement that the proceeds of sale of the Shenton House unit should be paid to the respondent as part payment for the Dunearn Road property.

We did not agree that this was the only inference possible. In fact, we did not think it a possible inference at all. There were written agreements dated November 1987 and July 1988 relating to the sale of the Dunearn Road property from the respondent to Kimly. Specifically they provided for different prices at which that property would be sold, depending on the circumstances appertaining at the time of drafting. As it happened, these agreements were eventually cancelled and so were of no material substance to the case, but they were drafted at a time when this long-standing relationship of informality and trust between Kimly and the respondent was supposed to have existed, by the respondent`s own assertion. Quite apart from being inconsistent with this assertion, these agreements were drafted in the course of the transaction relating to the Dunearn Road property, which was the subject matter of the oral joint venture alleged by the respondent. It seemed altogether too much of an absurdity that this relationship of informality existed for the purposes of the overall joint venture and for the purposes of payment out to the respondent of the proceeds of sale of an unconnected piece of property as a payment pursuant to that joint venture, but not for the purposes of the transfer of property which was a seminal component in the joint venture.

In the face of the evidence, we had no difficulty affirming the findings of the disciplinary committee that the first charge had been proven beyond reasonable doubt.

The second charge

In relation to the second charge there were two issues, one factual and one legal. That the sum of $179,898.78 paid to Kimly on 14 November 1989 came from the clients` account of the respondent`s firm was not disputed. That it was not from Kimly`s account was equally undisputed. It appeared from the books of the respondent`s firm that the money came from the account of another client, or clients to be accurate, for they were a pair of Indonesian brothers called Hasan and Rusmin Widjaja, for whom the respondent said he had acted in the sale of a property, No 215, Pasir Panjang Road. The respondent`s case on the facts was that these clients had authorized him to draw upon the moneys in their client account for his own purposes. As sole proof of this he produced a letter which we think useful to reproduce in its entirety:

From: Mr Hasan Widjaja

Mr Rusmin Widjaja

28 July 1989

To:

Mr Wong Kai Kit

c/o M/s K K Wong and Co

3 Shenton Way #20-09A

Shenton House

Singapore 0106

Dear Sir

215 Pasir Panjang Road, Singapore

This is to allow you to use the proceeds of sale in the above property for your use and benefit.

Yours faithfully

Sgd

Hasan and Rusmin Widjaja

It will be observed that no address for the Widjajas was included. The signature appended was not that of either of the Widjaja brothers. Instead the respondent said it was the signature of a Henry Setiawan, who had been given a power of attorney to sign for the Widjaja brothers. Neither the Widjaja brothers nor Henry Setiawan were called as witnesses. The power of attorney was not produced. The file relating to this alleged sale of property in Pasir Panjang could not be found. Only the ledger card for the account was placed before the disciplinary committee. This very ledger card showed that on the date of this letter of authorization the balance in the account was zero. This letter of authorization was not specifically mentioned until the last day of the disciplinary committee hearing on 21 August 1992. As such there was effectively no independent direct evidence of any genuine authorization. In the circumstances we affirmed the disciplinary committee`s finding that no such authorization had ever been given.

It had further been contended by the respondent that the second charge was invalid because it fell outside the scope of Kimly`s complaint, but this argument was abandoned at the hearing before us.

The fifth charge

However, the disciplinary committee had held that the third, fourth and fifth charges were different in form and substance from the matters set out in Kimly`s complaint and could not stand. The Law Society contended that this decision was incorrect in relation to the fifth charge, which is now set out. It asserted that the respondent:...