Vorobiev Nikolay v Lush John Frederick Peters and others

JudgeLee Seiu Kin J
Judgment Date30 September 2010
Neutral Citation[2010] SGHC 290
Citation[2010] SGHC 290
Docket NumberSuit No 720 of 2009 (Summons Nos 2035 and 2312 of 2010)
Published date04 October 2010
Hearing Date13 July 2010
Plaintiff CounselTan Gim Hai Adrian, Mohamed Nawaz Kamil, Nuraisah Binte Ruslan and Foo Wen Ying Esther (Drew & Napier LLC)
Date30 September 2010
Defendant CounselKoh Swee Yen and Sim Hui Shan (WongPartnership LLP)
CourtHigh Court (Singapore)
Subject MatterLegal profession
Lee Seiu Kin J: Introduction

The two applications before me relate to whether the plaintiff’s solicitors, Drew & Napier LLC (“Drew & Napier”) are conflicted from acting for the plaintiff in the present suit on the grounds that they had earlier acted for the defendants in same or related matters and therefore should be restrained from acting as counsel for the plaintiff. For the reasons that follow, I allow the defendants’ application to restrain Drew & Napier from doing so.

The plaintiff’s claim

The plaintiff Nikolay Vorobiev brought this suit against the defendants John Frederick Peters Lush (“Lush”), Francois Ostinelli (“Ostinelli”) and Alexander Novoselov (“Novoselov”) on the grounds that the defendants made, or conspired to make, fraudulent misrepresentations to him to induce him into entering an agreement for the purchase of 20% of the shares in Stainby Overseas Limited (“Stainby”) (a company incorporated in British Virgin Islands (“BVI”)) which held the shares in Petroval Pte Ltd (“PPL”).

The plaintiff claimed that he and the defendants were directors of PPL. Subsequently, around February 2006, Artem Zakharov (“Zakharov”) contacted the plaintiff who then agreed to buy 20% share in PPL for US$3,810,000. The plaintiff was under the impression that another company Everon held the shares in PPL through Stainby. Pursuant to the agreement, on 8 May 2006, Boyce (a BVI company solely owned by the plaintiff) was issued 20% shareholding in Stainby, and on 19 June 2006, Stainby became the sole shareholder of PPL. The three defendants and Zakharov, through their respective nominee companies, also each held 20% shareholdings in Stainby. Around late May or early June 2006, the parties (the plaintiff, the three defendants and Zakharov) agreed that they would each provide loans of US$2,000,000 to Stainby for the purpose of Stainby making a loan of US$10,000,000 to PPL. Following this, around 26 June 2006, Stainby and PPL entered into a loan arrangement. Around September 2006, the same parties again agreed they would each provide another loan of US$1,000,000 to Stainby for the purpose of Stainby then making a loan of US$5,000,000 to PPL. Following this, around 27 September 2006, Stainby and PPL entered into another loan arrangement.

The plaintiff further claimed that on 7 December 2007, another company Petroval SA (“PSA”) commenced proceedings in BVI against the defendants, their nominee companies, and Boyce, for a declaration that Stainby held the shares in PPL on trust for PSA, and for an account of profits. On 15 February 2008, PSA commenced proceedings in Singapore against the defendants seeking the same reliefs. Around 10 September 2009, the parties to the Singapore proceedings settled.

The bases of the plaintiff’s claim against the defendants are as follows. Firstly, the plaintiff alleged that the defendants fraudulently misrepresented that they were the ultimate beneficial owners of the shares in PPL or had the authority of the beneficial owners to deal with the PPL shares, when in fact the shares were held by Stainby on trust for PSA (and therefore Stainby did not have the beneficial ownership to PPL). Secondly, the plaintiff alleged that the defendants fraudulently misrepresented that the purchase price paid by him for PPL shares was based on 20% of the price payable by the defendants to Everon for its beneficial shareholding in PPL. The plaintiff alleged that, unknown to him, Everon reduced the purchase price payable to it by the defendants for its beneficial interest in PPL such that the defendants did not have to make any payment to Everon and would only have to declare all of PPL’s monies at that time as dividends to Stainby (and ultimately to Everon). Thirdly, the plaintiff alleged that the defendants fraudulently misrepresented that neither Petroval Bunkering International (“PBI”) nor PPL will have any assets or liabilities at the time he acquires his 20% shareholding in PPL, although in fact PBI had liabilities amounting to US$5,000,000 at the material time. The plaintiff alleged that as a consequence of the defendants’ misrepresentations, he suffered losses amounting to US$3,810,000 for the purchase of the 20% stake in PPL, and US$3,000,000 for the shareholder loans made. In the alternative, the plaintiff alleged that the defendants wrongfully and dishonestly and with the intent to injure him, conspired and agreed together to make the representations to induce him to purchase a stake in Stainby, and to make the loans.

As the action against the first defendant has currently been stayed, and service on the second and third defendants have been set aside (see below), the defendants have not entered their defence.

Registrar’s Appeal No 154 of 2010

On 30 September 2009, Lush filed an application to stay the proceedings against him in favour of Switzerland. The stay was granted by assistant registrar Crystal Tan but is now the subject of appeal (registrar’s appeal no 19 of 2010 (“RA19/2010”)) and judgment has been reserved. On 27 October 2009, the plaintiff obtained an order for service of the writ and statement of claim out of jurisdiction on Ostinelli and Novoselov, and they were duly served. However, that order for service out of jurisdiction was set aside by assistant registrar Denise Wong on 5 April 2010. That decision is the subject of the appeal before me in registrar’s appeal no 154 of 2010 (“RA154/2010”). However, in view of the appeal against the stay of proceedings against Lush in RA19/2010, I was of the view that it would be expedient to await the outcome of that appeal. I therefore adjourned RA154/2010 to await the outcome of RA19/2010.

The applications before this court

The defendants applied for the plaintiff’s solicitor, Drew & Napier, to be restrained by way of an injunction from acting as counsel for the plaintiff in the present suit and/or in any applications and/or appeals arising out of or made in connection with the present suit and/or giving legal advice to and/or legally representing in any other way the plaintiff in connection with this suit. The plaintiff applied for the defendants’ application to be struck out.

The basis of the defendants’ application is r 31(1) of the Legal Profession (Professional Conduct Rules) (Cap 161, r 71, 2000 Rev Ed) (“PCR”), which reads as follows:

Not to act against client 31. —(1) An advocate and solicitor who has acted for a client in a matter shall not thereafter act against the client (or against persons who were involved in or associated with the client in that matter) in the same or any related matter.

(2) For the purposes of paragraph (1), the term “client” includes a client of the law practice of which the advocate and solicitor is a partner, a director, an associate or an employee, whether or not he handles the client’s work.

(3) Paragraph (1) shall apply even where the advocate and solicitor concerned becomes a member of a different law corporation.

(4) Nothing herein shall preclude a law practice or law corporation from acting against a party in a matter provided that — (a) the law practice or law corporation has not previously acted for the party (or for persons who were involved in or associated with the party in that matter) in the same or any related matter; and (b) any advocate and solicitor of the law practice or law corporation who has previously acted for the party in the same or related matter neither acts nor is involved in that matter or related matter in any way whatsoever and does not otherwise disclose any confidential information relating to the matter or the party to any other member of the law practice or law corporation.

The defendants contended that r 31(1) of the PCR displaced the common law position on this issue. It was therefore an absolute prohibition against an advocate and solicitor acting against his former client in the same or related matter, and was not contingent on the advocate or solicitor having acquired confidential information from the client and/or that there be a risk of disclosure of such confidential information. For this proposition, the defendants relied on Pinsler’s observation in Ethics and Professional Responsibility: A Code for the Advocate and Solicitor (Singapore: Academy Publishing, 2007) and Law Society of Singapore v Seah Li Ming Edwin and another [2007] 3 SLR(R) 401. The defendants claimed that Drew & Napier had previously acted for them in the following matters (“the previous retainers”): The defendants’ shareholders’ dispute with Everon which ultimately resolved through the defendants’ purchase of Everon’s shares held in Stainby. Negotiations with Everon on the purchase of Everon’s shares in Stainby and the terms of such purchase. Shareholders’ loan of US$10m from Stainby to PPL and the loan agreement dated 26 June 2006 between Stainby and PPL. The defendants contended that the previous retainers concern matters which are “same or related” to the present proceedings, and therefore, r 31(1) of PCR provided an absolute prohibition against Drew & Napier from acting for the plaintiff against the defendants. In particular, the defendants contended that Drew & Napier acted for the defendants in the previous retainers for at least a period of seven months, from December 2005 to July 2006, which was also the same period during which the plaintiff alleged that the defendants have made certain representations to him about the shareholding in PPL and the terms of the defendants’ purchase of Everon’s shares in Stainby. Therefore, by providing them with legal advice in their negotiations with Everon over the sale and purchase of Everon’s shares in Stainby, and by providing them with legal advice on the loan agreements, the defendants contended that Drew & Napier acted in matters which were related if not the same as the present proceedings.

The plaintiff did not dispute that Drew & Napier had acted for the defendants in the previous...

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4 cases
  • Then Khek Khoon v Arjun Permanand Samtani
    • Singapore
    • High Court (Singapore)
    • 14 February 2012
    ...421 (refd) Tricontinental Corp Ltd v Holding Redlich (22 December 1994) (SC, Vic) (folld) Vorobiev Nikolay v Lush John Frederick Peters [2011] 1 SLR 663 (distd) Wee Soon Kim Anthony v Law Society of Singapore [2001] 2 SLR (R) 821; [2001] 4 SLR 25 (folld) Zorica Kalenik v John Ioannis Aposto......
  • Boey Pang Sim Richard v Law Society of Singapore
    • Singapore
    • High Court (Singapore)
    • 26 November 2015
    ...Inc [2007] BCJ 1674 (refd) Tay Ang Choo Nancy v Yeo Chong Lin [2010] SGHC 126 (refd) Vorobiev Nikolay v Lush John Frederick Peters [2011] 1 SLR 663 (folld) Wee Soon Kim Anthony v Law Society of Singapore [2007] 1 SLR(R) 482; [2007] 1 SLR 482 (refd) Wong Kok Chin v Singapore Society of Accou......
  • Harsha Rajkumar Mirpuri (Mrs) née Subita Shewakram Samtani v Shanti Shewakram Samtani Mrs Shanti Haresh Chugani
    • Singapore
    • High Court (Singapore)
    • 5 July 2018
    ...Mr Gregory Vijayendran, for the plaintiff, submitted that they were, relying on Vorobiev Nikolay v Lush John Frederick Peters and others [2011] 1 SLR 663 (“Vorobiev”), where the High Court applied the PCR to determine whether an application to restrain the plaintiff’s lawyers by way of an i......
  • Then Khek Khoon and another v Arjun Permanand Samtani and another
    • Singapore
    • High Court (Singapore)
    • 14 February 2012
    ...on the facts, the issue of proper forum was not raised or discussed. In Vorobiev Nikolay v Lush John Frederick Peters and others [2011] 1 SLR 663 (“Vorobiev Nikolay”), Lee Seiu Kin J granted an injunction to restrain solicitors (all solicitors in the firm rather than a specific advocate) fr......
2 books & journal articles
  • JUDICIAL DEVELOPMENTS IN ETHICAL LAWYERING IN SINGAPORE
    • Singapore
    • Singapore Academy of Law Journal No. 2013, December 2013
    • 1 December 2013
    ...Samtani[2012] 2 SLR 451 at [47]. 20[2013] 3 SLR 221. 21Law Society of Singapore v Wan Hui Hong James[2013] 3 SLR 221 at [84]. 22[2011] 1 SLR 663. 23Vorobiev Nikolay v Lush John Frederick Peters[2011] 1 SLR 663 at [23]. 24Law Society of Singapore v Wan Hui Hong James[2013] 3 SLR 221 at [4]–[......
  • Legal Profession
    • Singapore
    • Singapore Academy of Law Annual Review No. 2011, December 2011
    • 1 December 2011
    ...of international commercial arbitration. Conflicts of duty 20.5 Our second case, Volobiev Nikolay v Lush John Frederick Peters[2011] 1 SLR 663 (Volobiev Nikolay), offers a useful discussion of the common law rule where the court's intervention is founded on the protection of confidential in......

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