Then Khek Khoon and another v Arjun Permanand Samtani and another

• Jurisdiction: Singapore
• Judge: Quentin Loh J
• Judgment Date: 14 February 2012
• Neutral Citation: [2012] SGHC 17
• Court: High Court (Singapore)
• Docket Number: Suit No 1084 of 2009 (Summons No 5469 of 2011/F)
• Year: 2012
• Published date: 21 February 2012
• Hearing Date: 27 January 2012,10 January 2012
• Plaintiff Counsel: Mr Philip Jeyaretnam, SC, (Rodyk & Davidson), as counsel, instructed by Edde Ng, Cheryl Koh and Ho Xin Ling (Tan Kok Quan Partnership)
• Defendant Counsel: N Sreenivasan and Shankar A S (Straits Law),Subramanian Pillai, Luo Ling Ling and Edwin Chia (Colin Ng & Partners)
• Subject Matter: Legal Profession,Professional Conduct,Breach,Civil Procedure,Injunctions,Civil Procedue,Jurisdiction,Inherent,Equity,Remedies,Equitable Compensation
• Citation: [2012] SGHC 17

Quentin Loh J : Introduction

The 2nd defendant, Mr Tan Kah Ghee, (“Mr Tan”), seeks an injunction to restrain the plaintiff’s solicitors, Messrs Tan Kok Quan Partnership (“TKQP”) from acting as solicitors for the plaintiffs and/or giving legal advice in all court matters arising out of these present proceedings.¹

These proceedings, (the main action, Suit No 1084 of 2009, consolidated with Suit No 1085 of 2009/M and Suit No 1086 of 2009/R (“S 1084/2009”)), flow from the protracted Horizon Towers litigation which culminated in the Court of Appeal judgment setting aside the order of the Horizon Board for the collective sale of the property (“Horizon Towers litigation”) on 2 April 2009: see Eng Ghee and others v Mamata Kapildev Dave and others (Horizon Partners Pte Ltd, intervener) and another appeal [2009] 3 SLR(R) 109 (“the CA Judgment”).

In the Horizon Towers litigation, the plaintiffs were part of a group of subsidiary proprietors who opposed the collective sale. They were unsuccessful before the Strata Titles Board (“STB”) and the High Court, but as noted, succeeded before the Court of Appeal. The plaintiffs were represented by TKQP before the STB, the High Court in relation to orders made by the STB and in the judicial review application in the High Court before Choo Han Teck J (“STB matters”). TKQP did not represent the plaintiffs in the Court of Appeal.

The 1st defendant to S 1084/2009, Mr Arjun Samtani (“Mr Samtani”) was the chairman of the management council of Horizon Towers at the time the collective sale was first mooted. He was later appointed as the chairman of the original sales committee (“the original SC”). Mr Tan was also a member of the original SC. It should be noted at the outset that Mr Samtani is neither applicant nor respondent to Mr Tan’s application to restrain TKQP from participating in any capacity in S 1084/2009. Mr Samtani adopts a neutral stand, neither supporting nor opposing Mr Tan’s application for an injunction.

In S 1084/2009, the plaintiffs found their claim on the defendants’ breach of fiduciary duties which the Court of Appeal found to be owed by the defendants to the plaintiffs, due to a possible conflict of interest which the defendants should have disclosed to the subsidiary proprietors: At the time of initiation of the collective sale process, unknown to other members of the original SC, the defendants took steps to purchase additional units in Horizon Towers.² These purchases were only discovered during the CA hearing and during the discovery process in S 1084/2009.³ As members of the original SC, the defendants breached duties owed to the plaintiffs qua agent, fiduciary and trustee which resulted in the plaintiffs’ loss and damage. Specifically, at [38.1] of their Statement of Particulars, the plaintiffs claim they suffered loss and damage as a result of the breach in the form of the solicitor and client costs incurred in the sum of $264, 771.71 for the proceedings leading up to the setting aside of the collective sale.⁴ In the consolidated suit, S 1084/2009 the plaintiffs claim $752,665.15 in total solicitor and client costs from the defendants. It is noteworthy that the only pleaded loss and damage sought by the plaintiffs is the solicitor and client costs paid by the plaintiffs to TKQP in the STB matters. The plaintiffs also state that they will give credit for any costs they recover in the Horizon Towers litigation; those bills, I have been told by counsel, have yet to be taxed.

Mr Tan’s answer to the plaintiff’s claim in so far as it is relevant to this application is as follows:⁵ The quantum of damages claimed by the plaintiff is “unreasonable and/or manifestly excessive” or unreasonably incurred. The invoices listed at [38.1] of the Statement of Particulars are not sufficiently particularised: the number of solicitors, their seniority, their time costs incurred and their respective charge out rates. There was “substantial duplicity” of the work in representation of the plaintiffs in the three suits which have been consolidated under S 1084/2009. There was “gross overcharging” in relation to the matters to which the invoices relate.

Because Mr Tan challenges the quantum of loss and damage suffered by the plaintiffs, and therefore the reasonableness of TKQP’s invoices to the plaintiffs (which were paid by the plaintiffs), Mr Tan contends that TKQP should be prevented from representing the plaintiffs due to the professional duties and obligations imposed on them under Rules 25 and 64 of the Legal Profession (Professional Conduct) Rules (Cap 61, R1, 2010 Rev Ed) (“LPPCR”). Rules 25 and 64 of the LPPCR read as follows:

Conflict of interest

25. During the course of a retainer, an advocate and solicitor shall advance the client’s interest unaffected by:

(a) any interest of the advocate and solicitor;

(aa) where the advocate and solicitor is a partner or an employee of a limited liability law partnership any interest of the limited liability law partnership;

(b) any interest of any other person; or

(c) the advocate and solicitor’s perception of the public interest except where accepting the instructions may make it difficult for him to maintain his professional independence or would make it incompatible with the best interests of the administration of justice.

Solicitor not to act if he is a witness

64 (1) An advocate and solicitor shall not accept instructions in a case in which the advocate and solicitor has reason to believe that he is likely to be a witness on a material question of fact.

(2) An advocate and solicitor shall discharge himself from representing a client if it becomes apparent to the advocate and solicitor that he is likely to be a witness on a material question of fact.

(3) In discharging himself, the advocate and solicitor shall take all reasonable steps to ensure that his client’s interest is not in any way jeopardised.

Urgency

The matter has assumed some urgency because the consolidated action is fixed for hearing from 6 to 17 February 2012. This application was filed just before the court vacation on 30 November 2011, fixed for hearing on 21 December 2011 but adjourned as counsel was not available due to the holiday season and came before me on 10 January 2012. In view of the urgency, I gave my decision with brief grounds on 27 January 2012 and told the parties that my written grounds will follow.

It appears that Mr Tan, inadvertently or otherwise, has contributed to the protraction of the main action by multiple changes of solicitors. Initially Mr Tan was represented by TSMP Law Corporation and then by Mr Glenn Knight on or around 29 July 2011, after which Mr Tan was a litigant in person. On 8 Nov 2011, Collin Ng Partners (“CNP”) were instructed and currently represent Mr Tan.⁶ Mr Samtani has maintained the same representation throughout these proceedings.

Mr Tan introduced the defence relating to the propriety of TKQP’s invoices rather belatedly on 18 November 2011 by way of amendment to paragraphs 30-31 of his defence (above at [6]). This was no doubt due to CNP’s coming on board and their assessment of the matter. While the plaintiffs objected to a large number of the other amendments proposed, the position taken on paragraphs 30-31 was that reply submissions would be filed followed by an application for further discovery.⁷ Mr Tan’s submission that the plaintiffs are estopped from arguing against the merits of the defence raised in paragraphs 30-31 is without substance. In light of the seriousness of the remedy sought by Mr Tan, the merits of the defence are a paramount consideration in the present application. Further, it can be said that the plaintiffs reserved their position by clearly stating their intention to file a reply.

On the other hand, the plaintiffs have taken out an application for preliminary determination, in which they seek to establish that: The defendants’ defences amount to a collateral attack on the CA judgement. In the alternative, the defences are unsustainable at law. In particular the dispute relating to the invoices (forming the subject matter of dispute) does not arise as damages for breaches of fiduciary duties are awarded based on principles of restitution or equitable compensation.

The Issues

This application and the submissions have raised the following issues: Issue 1: Does the Court have the inherent jurisdiction to hear an application based on breaches of the LPPCR? If so, when should it exercise its discretion; Is the Court the proper forum to determine a breach of the LPPCR; If so, can Mr Tan, an adverse party, make the application; Issue 2: What is the nature and extent of the alleged breaches of rr. 25 and 64 of the LPPCR and what facts support the present application; Issue 3: Whether the scope of r 64 could extend beyond the testifying solicitor to restrain all the solicitors at TKQP from acting for the plaintiffs; Issue 4: Whether the reasonableness of the invoices rendered to the plaintiffs by their solicitors is a material fact in issue where the claim is for equitable compensation for breach of fiduciary claim; and Issue 5: If the Court takes the view that this is the proper forum, is the evidence in support of the allegation of overcharging upon which the breach of r 64 is premised, sufficient to trigger the court’s exercise of its inherent jurisdiction?

Issue 1: Inherent jurisdiction of the Court

The inherent jurisdiction of the court is very widely expressed in O 92 r 4 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules”). It is exercisable to prevent “injustice” or an “abuse of process”:

For the avoidance of doubt it is hereby declared that nothing in these Rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of process of the Court.

[emphasis added]

It has long been...