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VERY IMPT!!
THE SOLICITOR’S CONTRACT OF RETAINER -> THE RELATIONSHIP OF SOLICITOR & CLIENT
i. Acceptance
- The relationship of solicitor and client is contractual, solicitor is constituted an agent for his client –
contractual obligations. Law wil imply oblig into rr anyway.
- Solicitor is also constituted a fiduciary to his client – keech principles – like truste – to protect interest of
beneficiary ie in lawyer terms – to act in best interse of his client
Re Van Laun ex parte Chatterton [1907] 2 KB 23 (at p. 29 per Cozens-Hardy MR);
Oswald Hickson Collier & Co. v Carter-Ruck [1984] 2 All ER 15
- There are generally no formal requirements for retainer agreement – can arise fr oral discussion. Contract
wld have started.
- The relationship may be implied from the acts of the parties
even if you do not get into a contractual retainer, the court may still imply a retainer into the
relationship
even if you have a comprehensive one, the court may still imply certain terms
o note you can just accept nstructions on first value – that what is told is the truth – no oblig to go and check
instructions
- The existence of O 64 r 7 necessarily implied that counsel were entitled to request opposing counsel to
produce their warrants to act.
- In light of the Plaintiff’s solicitors persistent refusal to produce any warrant to act, it was open to the
Defendants to take the view that no such warrant existed and that there was prima facie evidence that there
was no authority to act.
iii. Checking authority of client’s agent – eg where client is company. Cannot immed accept what client
says – that he is director etc.
- If an agent or representative of client gives instructions on behalf of client, the lawyer must ensure that the
agent or representative does so with authority
power of attorney
in some proceedings, this may have to be lodged with high court
- And in the absence of evidence of such authority, the advocate and solicitor shall, within a reasonable time
thereof, confirm the instructions with the client.
- In the case where the client is a limited company, the lawyer must only take instructions from persons
acting with the express or implied authority of the company. (eg. board resolution)
- Fong Maun Yee and Another v Yoong Weng Ho Robert (practising under the name and style of Yoong & Co)
[1997] 2 SLR 297
F claimed to be the agent of the Company with the necessary documents to effect the sale of a
property.
Buyer of property approach Y who did a company search and confirmed that the persons who
signed the option form and the resolution were at the material time directors of the Company.
Buyer then paid F the purchase monies.
It was later discovered that these documents were forgeries, that F was not an agent of the
Company and had absconded with the monies.
Y ought to have verified with the Company and not relied on the resolution. In doing so, Y
impliedly represented that the Company wanted to sell the property and that he had been appointed
to act in the sale. There was a misstatement and a warranty.
By failing to verify his instructions to act for the Comapny and therefore acting without
authority, Y did not meet up to the standard required of him of a reasonably competent
conveyancing solicitor. He had breached his duty and skill to the Buyer.
c. Client is unreliable
e. Solicitor knows that there is an existing retainer between the client and another solicitor
2.6 Effect of a Change of Status from a Partnership to a Law Corporation on a Solicitor’s Written Agreement on
Costs for Work Done
- Engelin The Practice LLC v. Wee Soon Kim Anthony [2004] 1 SLR 605:
• Giving judgment in favour of the client, Judith Prakash J held that it was neither novated nor
assigned to them
• Her Honour also held that even if the agreement had been between the client and Ms Teh, it would
not have been acceptable for the law corporation to sue as her representative since the 2 were
separate legal persons and the law corporation was neither the administrator of Ms Teh’s estate nor
her trustee in bankruptcy
Facts
The defendant (“client”) engaged M/s Engelin Teh & Partners a firm of solicitors practising in partnership
(“the firm”) to act for him in a suit, and entered into a written agreement on costs for work done in relation to
the suit. On 1 February 2002 the firm was dissolved and its business transferred to a law corporation
incorporated by the partners of the firm. The law corporation continued to act for the client. The client
subsequently refused to pay a number of bills issued by the law corporation, the latter brought this originating
summons to enforce the written agreement on costs.
The client contended that the written agreement was varied by an oral agreement he had come to with
Ms Engelin Teh SC (“Ms Teh”), then the managing partner of the firm. In any case, the client argued that the
law corporation had no standing to enforce the written agreement as it had been entered into with the firm,
which was an entity distinct from the law corporation. The law corporation denied the existence of any oral
agreement which varied the terms of the written agreement. They further argued that the written agreement
was between the client and Ms Teh, and it was an implied term of the agreement that the entity under which
Ms Teh practised would be entitled to enforce the written agreement.
Held, dismissing the summons:
(1) On the evidence, the written agreement was to be regarded as the only agreement on costs in relation to
the suit. The client’s evidence on the purported oral agreement was inadmissible since he was relying on parol
evidence to contradict the written contract: at [60].
(2) On the facts, the intention of the parties was that the written agreement was to be between the client and
the firm, and not between the client and Ms Teh:
at [52].
(3) The law corporation had no legal right to enforce the agreement as it was neither novated nor assigned to
them. Even if the agreement had been between the client and Ms Teh, it would not have been acceptable for
the law corporation to sue as her representative since the two were separate legal persons and the law
corporation was neither the administrator of Ms Teh’s estate nor her trustee in bankruptcy: at [61].
[Observation: The word “solicitor” in s 111(1) of the Legal Profession Act (“the Act”) and in other parts of the
Act must be interpreted as including the plural “solicitors” when necessary, as to insist that it mean only the
singular would lead to ridiculous results. As such, s 111(1) was to be interpreted as to allow for agreements on
costs to be entered into between a client and solicitors practising in partnership: at [53].]
3.1 Infants
- infant cannot appoint a solicitor to act for him
- proceedings in court, law provides the means for infants both to bring proceedings and to defend any
proceedings that are brought against them
- previously, in suing, an infant had to do so by a “next friend”; in defending proceedings, by a “guardian
ad litem”
- recently, “litigation representative” has now replaced these expressions
- in the absence of a litigation representative, proceedings cannot be treated as proceedings of the infant,
and there are no grounds for connecting the infant legally with the claim
- the proceedings are res inter alios acta i.e. the case is between the other parties and does not affect the
child: Dey v. Victorian Railway Commissioners 78 CLR 62, per Dixon J at p. 100
- an infant defendant to proceedings does not appear
- any order made or judgment given against the infant defendant would be a nullity
a) Suing by a litigation representative (formerly “next friend”)
• Infant is just as much bound by the proceedings as if he were an adult: Thomason v. The
Municipality of Campbeltown [1939] 39 SR (NSW) 347
• In special circumstances an infant’s case might be reopened
• Gregory v. Molesworth [1747] 3 Atk 626
• Dey v. Victorian Railway Commissioners
b) Defending by a litigation representative (previously “guardian ad iitem”)
• Makes himself liable to the solicitor for costs
• Will not be ordered to pay the costs of an unsuccessful defence on behalf of an infant except in
cases of gross misconduct: Morgan v. Morgan 12 LT 199
• Justified in limiting his liability to his solicitor to such sums as some party to the litigation may be
ordered to pay or such sums as he was allowed to retain out of the estate of the infant: Blyth v.
Fladgate [1891] 1 Ch 337, at p. 359
• The usual order is that the plaintiff must bear their costs and, if successful, he is allowed to add
them to his own
• A litigation representative is not a party to a suit, but his costs, when allowed, are taxed on that
basis
c) Indemnity for Costs
• Litigation representative is entitled to be indemnified by an infant against costs properly incurred
by him on the infant’s behalf
• Includes a right to be indemnified out of an infant’s estate
• Murray v. Kirpatrick (supra)
• The onus is on him to establish before the Taxing Master and ultimately a judge that these have
been “properly incurred”
• Such a decision is discretionary and depends on all the known circumstances
3.7 Partners
- any one of them may bring an action in the partnership name without the express consent of the others
- but there is a right reserved to any of these partners dissenting from the bringing of the action to take
steps to have proceedings stayed until security is given for the costs which he may be called upon
4.3 Procedure
- proper procedure for challenging a retainer is to move by a separate and distinct motion upon
notice to dismiss the suit
- Tung Hui Mannequin Industries (above)
- Mertelmeyer v. Mertelmeyer [1904] 21 WN (NSW) 75 AH:
• “In Hawkins Hills Gold Mining Co. v. Briscoe (supra), there were special circumstances and the
objection was in that case allowed to be taken at the hearing, partly because the solicitors for the
plaintiff in that case had shortly before in other proceedings stated that they had no authority to
accept service on behalf of their client. Those special circumstances do not exist in this case”
- Australian Workers’ Union v. Bowen [1964] ALR 407, held:
• “after it had been held at common law that a defendant who had paid the amount of a judgment to
a solicitor, not having the authority of the creditor to issue the writ, was liable to pay the creditor
all over again, it became the practice at common law and subsequently at equity to allow either the
plaintiff or the defendant to move the court for an order that the solicitor pay the costs of the
plaintiff (including any costs for which he had become liable to the defendant) and the costs of the
defendant
• the proper procedure is to file a substantive motion, and not to raise the want of authority by way
of defence to the proceedings
• but court ahs inherent jurisdiction to stay or strike out the proceedings at whatever stage if the facts
establish want of capacity or authority to sue”
- Perpetual Trustee Co. Ltd v. Aroney [1944] 44 SR (NSW) 313, held:
• The rule, that a solicitor’s retainer may only be challenged on a substantive motion, does not apply
when the person for whom he purports to act is an enemy alien
• The principle that when the court in the course of an action becomes aware that the plaintiff is
incapable of giving any retainer at all, it ought not to allow the action to proceed
- Whther settm can be challenged with impurity: Yap Chee Meng v. Ajinomoto (Malaysia) Berhad [1978]
2 MLJ 249
Facts:
The plaintiff had been injured while performing his work at the factory of the defendants and had been
blinded as a result of the accident. He instructed solicitors who arranged a settlement of his claim. The
plaintiff subsequently repudiated the settlement and brought an action for damages.
Holdings:
Held:
(1).as a general rule it is against public policy to allow settlements between solicitors on behalf of their
respective clients in accident cases to be challenged with impunity;
(2).a settlement like other contracts is voidable on specific grounds, as for example, undue influence,
misrepresentation, fraud or mistake;
(3).in this case the plaintiff had not shown any such specific grounds and therefore the application of the
defendants to strike out the writ of summons must be allowed.
5.4 Duration
- general rule is that a solicitor retained by a client undertakes to finish the business for which he is
retained
- where a solicitor is retained to sue for damages for breach of contract or for negligence the client cannot
get any benefit until judgment has been obtained
- the solicitor is not entitled to tax his costs until he has either obtained judgment or lost the suit
- but this is subject to any special agreement which may have been made by the solicitor with his client
1) The Legal Profession (Professional Conduct) Rules – codifying rules tt need to be observed in practice.
Drawn up in plain language. Prev, need to refer to cl
Part III provide the general framework for lawyer client relationships
- Provide diligent legal service, Rule 12
- Not to incur improper costs, Rule 13
- Complete work in a reasonable time, Rule 14
- Not to accept instructions which he cannot complete on time, Rule 15
- Not to accept instruction outside his field of practice, Rule 16
- Keep the client reasonably informed of progress, Rule 17
- Notify client of receipt of money on his behalf, Rule 18
- Render a statement of accounts if requested, Rule 19 – ledger entry on what received and paid out. And all
expenses incurred on his file.
- Respond promptly, Rule 20
- Explain to client the options available to him and offers by other parties, Rule 21
- Inform the client of fees and charges, Rule 35 – must give fair and accurate estimate of fees. Bar
councils these days making it more stringent on practicing lawyers to ensure that estimates ar
accurate – id not need to periodically update the estimates. Eg fr 5 day trial estimate to 15 days – need
to advise him on this!
- Explain to the client the contentious fees that he may face, Rule 36
- Evaluate the risk and costs involved, Rule 40
Rationale:
- These rules govern the basic workings of the relationship
- They stem from the contract and fiduciary relationship that subsists between lawyer and client
- As agent of his client the lawyer must always keep his client properly informed
- Lawyer must act in the utmost good faith towards client
- take rules seriously!!!! – face discip action fr law soc if breach proff rules.
Struck off roll being the ultimate sanction
- Only Civil neg suit for forgetting law principles in which case insurance comp pays
- Cl rules reduced - Legal Profession (Professional Conduct) Rules, Part III (Relationship and dealing with
clients) Rules 12- 53A.
- previous Rule 31 provided ‘shall not act against the client or against persons involved or associated with
client in that matter in the same or related matter’
- added that nothing in Rule 31 shall preclude a law practice acting against a party in the matter, provided 2
conditions are satisfied:
• firstly, the law practice has not acted for the party ‘in the same or any related manner’
• secondly, any advocate and solicitor of the law practice who had previously acted for the party in the
same or related matter is not involved in the matter or any related matter and does not disclose any
confidential information relating to the matter or the party to any member of the law practice
- absolute prohibition against an advocate and solicitor who ahs previously acted for a client in a matter to,
thereafter, not act against the client or other person involved in the same or related matter remains
- material change relates to the position of law firms or law corporations
- amendments ensure that a law practice is not precluded from acting against any party just because a
particular advocate and solicitor within the law practice is conflicted from doing so provided that there are
adequate safeguards to ensure that there is no risk of confidential information being disclosed
Fees
35. An advocate and solicitor shall inform the client of —
(a) the basis on which fees for professional services will be charged and the manner in which it is expected
that those fees and disbursements, if any, shall be paid by the client;
(b) other reasonably foreseeable payments the client may have to make either to the advocate and solicitor
or to a third party and the stages at which the payments are likely to be required;
(c) the estimates of the fees and other payments, which shall not vary substantially from the final amount,
unless the client has been informed of the changed circumstances in writing; - ensure tt client not surprised
by final bill
(d) the fees may be subject to a limit which may be incurred without further reference and where the limit
imposed on the fees is insufficient, the advocate and solicitor shall obtain the client’s instructions as to
whether to continue with the matter; and
(e) the approximate amount of the costs to date in every 6 months whether or not a limit has been set or
deliver an interim bill in appropriate cases.
- If time biling system, then advise client of hourly rate and othe lawyer or paralegal assiting
- Applies not only to legal work but any time spent seeing him, or responding to emails and letters
- Law practice can only give estimate in such cases – for time billing system – see 35c
o Duty to deliver to client interim bill
- If fixed fees based on work then advise client and describe the work and fee agreed
- If basis is by concluding written agreement on fees with client, then ensure tt there is written agreement
signed by client
- If undertke work and discharged, must acct to client for work undertaken and submit final bill and refund
any fees due back to client for work not undertaken – see council’s practice direction on ‘non refundable
retainer’
o Note the following sections:
- If agree to undertake work up to upper limit and this is reached, then obtain instructions as to whether to
cont to act in matter in this fee arrangmenr – 35d
(c) Duty to Act in the Client’s Best Interest vs. Duty to Court
In general, a solicitor’s authority to act derives from the terms of his retainer and is limited by any special
conditions imposed on him by the retainer.
- The duty to help the Court do justice is one of the lawyer’s foremost duties as an officer of the court
Duty to comply with the law
Duty to promote the rule of law
o eg when client commits perjury and u have reason to belive that this is taking place -
you cannot report on your client
you have duties to both ur client and the court – which is paramt and what do you do?
i. Secret Profit
o A lawyer must disclose frankly any personal interest he has in any transaction
o Stems from the law of trustees
Keech v Sanford (1726) Sel Cas Ch 61 – not to take advantage when dealing with trust property
o Making a secret profit would amount to professional misconduct
• ==> however, precedents in Canada, USA and Australia etc on the sentencing could not be upheld here,
because we are staying in Asian society that does not tolerate such acts,
• so long as you have solicitor client relationship… cannot have sexual relationship
• Held: Suspension for 3 years for the abovementioned reasons.
see recent case abt nokia executives and lawyer – bribery case
- crim offence and lawyer struck off
Section 128 Evidence Act, Also Rule 24 Legal Profession (Professional Conduct) Rules
- The lawyer has an absolute duty not to disclose confidential information he receives or contents of papers
recording instructions
- This lawyer should also see that this duty is impressed upon his firm and staff of the firm
• The rule is also embodied in s.128 Evidence Act, legal profession privilege
• Any communication prepared in the course of solicitor-client relationship for the client, is
privileged
• Cannot disclose to a Third Party of give evidence on it, without the client’s consent (includes
situation of subpoena to bring documents to court – if client refuses, cannot bring those
documents)
• Police cannot take away that privilege
• Disclosure would undermine the privilege the law has given to lawyers
• Privilege attaches to a selection of documents copied or assembled by a solicitor which betrays the
trend of advice given to his client – including copies made by the solicitor of the client’s pre-
existing documents which are not in themselves privileged, since such documents is just as likely
to betray the trend of advice on the selection of third party documents: Dubai Bank Ltd & Anor v
Galadari & others (No. 7) [1992] 1 All ER 658
• Evidence Act – exception: If know that client used lawyer in relation to a fraud scheme, or in
committing an offence, then the privilege is lost for the client
- General rule – a solicitor who is or has been retained by a client is under an absolute obligation not to
disclose or make use of confidential information communicated to him by his client, for the purpose of
enabling him to deal with his client’s affairs: Weld-Blundell v Stephens [1920] AC 956 HL; Boardman v
Phipps [1966] 3 All ER 721
- Any oral communication or documents for client is privileged
- Consent is necessary if otherwise to be furnished
- Privilege is waived by an order of court or a statutory requirement (thus not governed by section 128 EA)
scope of privilege
- Three Rivers D.C. v Bank of England (No.5) [2003] QB 1556:
• Scope pf legal advice privilege has been eroded
• Advice privilege applies to all communications between a lawyer and client only if the dominant
purpose of their relationship is for the client to obtain legal advice on his rights and liabilities
• Provision of Freshfields’ advice, which related to the preparation and presentation of material to
the Bingham inquiry into the collapse of the Bank of Credit and Commerce International, did not
involve the type of relationship that should attract privilege
- In non-adversarial proceedings, provide presentational, rather than legal advice
- Key concerns:
a) Able to easily determine whether he or she is in a relationship that is formed for the dominant
purpose of providing legal advice on a client’s legal rights and liabilities? To advise on
strategic, tactical and presentational issues, as well as legal issues
b) Is all advice in this context protected, including presentational advice? Court of Appeal
suggests that “broad” protection will be given, but give no guidance on what this protection
amounts to
c) If a lawyer is not in this sort of relationship, is any advice given on a specific legal topic
nevertheless still privileged? Court of Appeal decision in Three Rivers suggests that this will
be the case. However, this may result in lawyers having to redact information relevant to legal
advice from documents that contain non-privileged material
d) If “presentational” advice must be disclosed, will this allow the other side to speculate in an
informed way about what the lawyer’s advice must have been, thus enabling access to that
legal advice “through the back door”?
- very often that you act, in practice, for both H and W or purchaser and vendor
- e.g. H and W come to you to buy property etc, then subsequently, they have a divorce… your answer to any
of them wanting to file a file pertaining to the conveyance is that you cannot release because the duty is
owed to both of them… cannot release unless both give consent
- however, if there is a document that you prepared only for the H/W, then you can release it to that individual
whom you prepared it for
Note:
Derby & Co. and others v Weldon and others (No. 8) [1990] 3 AER 762
- Ethical duty that lawyer should not use the solicitor and client privileged document from the opposing
party
- Should return the document
- Similar application with regards to telling of information
*Held:
Where privileged documents belonging to one party to an action were inadvertently disclosed to, and inspected
by, the other side in circumstances such that the inspecting party must have realised that a mistake had
occurred but sought to take advantage of the inadvertent disclosure, the court had power to intervene and order
the inspecting party to return all copies of the privileged documents and to grant an injunction restraining him
from using information contained in or derived from the documents, even if it was not immediately obvious
that the documents were privileged.
- Conduct of the defendants’ solicitors – seeking to take advantage of an obvious mistake
- Court ordered them to return all copies of the privileged documents
*Different partners of the same firm of solicitors acting for opposing parties in litigation?
No general rule prohibiting: David Lee & Co (Lincoln) Ltd v Coward Chance (firm) & Ors [1990] 3 WLR 1278
David Lee & Co (Lincoln) Ltd v Coward Chance (firm) & Ors [1990] 3 WLR 1278
*Held:
- Court would only intervene to prevent partners so acting if it were satisfied that is was rightly anticipate
that mischief would result to one party of the arrangement
- In this case, there was not enough evidence was shown that sufficient steps had been taken to ensure that
there would be no leakage of information between the relevant partners so as to eliminate that prima facie
risk of mischief.
- Thus it was not lawful for the amalgamated firm to continue to act for the liquidators.
rationale
- policy – for client to make max disclosure. Confidentiality nec for this. Only with full info can lawyer fully
act. Client must have freedom to tell lawyer everything incl whther he was guilty. Corresp duty to keep it
confidential.
- Eg client commited perjury – you cannot report on ur client. This being the reason!
11.2 Waiver
- party entitled to privilege performs an act which is inconsistent with the maintenance of the
confidentiality
- where advice given to joint clients, each party must concur in waiving the privilege
- in common interest privilege, as distinct from joint privilege, not always necessary that all interested
parties concur for the privilege to be waived
- if legal professional privilege vested in a party is not lost by dissemination of the contents to others with
a common interest, privilege will not be lost because one of those parties minded to waive it
- question of whether the privilege is lost with its waiver by one of those parties must be determined by
asking whether the waiver has made it unfair for the other parties with a common interest to maintain
the privilege
- account to be taken of matters such as the circumstances in which the privileged communication took
place
- King v AC Australia Holdings Ltd [2002] FCA 872:
• First respondent, AG, sought disclosure from the solicitor (MBC), of its client lists in order to
determine the identity of the unrepresented shareholders
• MBC did not resist in principle disclosure of its client lists
• AG proposed to issue a subpoena for documents recording the instructions received by MBC from
the shareholders that it represented
• AG claimed that the solicitors had waived privilege by referring in an affidavit to instructions from
shareholders that they were misled by representations made by AG
• Federal Court, in ordering disclosure of the client lists, held that the solicitors did have a solicitor-
client relationship with the unrepresented shareholders and could not as a matter of principle, resist
AG’s solicitors communicating with them for legitimate forensic reasons
• However in the interests of case management and of the administration of justice generally, the
court should exercise control over that communication
• Achieved by requiring AG and its solicitors to forward in advance to MBC a draft of any
correspondence proposed to be sent to unrepresented shareholders, and by limiting AG’s capacity
to communicate with the unrepresented shareholders in writing
• Court further held that there was no implied waiver of privilege
• Reference to clients’ instructions was nothing more than background information
- Australia Competition and Consumer Commission v George Weston Foods Ltd and Another 198 A.L.R.
592:
• Proceedings were commenced in Dec 2002 by the applicant against the first respondent (GWF)
• Applicant had previously issued notices (under s. 155 of Australian Act) to GWF and P, the Chief
Executive Officer of GWF, to produce certain documents and to give oral evidence
• GWF’s solicitors informed the applicant that a number of documents required by the notices
attracted legal professional privilege
• Privilege was not a basis for refusing to provide documents required under a s. 155 notice
• It was stated that GWF and P were not waiving any privilege by producing the documents under
compulsion of the notices
• The privileged material was the subject of extensive use by the applicant
• Subsequent to production of the privileged material, in Daniels Corp International Pty Ltd v
Australian Competition and Consumer Commission [2002] 192 ALR 561 (Daniels), the High
Court held that s. 155 of the Australian Act did not authorize production of documents to which
legal professional privilege attached
• GWF subsequently sought return of the privileged material from the applicant
• It was common ground that that the privileged material constituted “confidential communications”
• Was held that the documents produced were always subject in law to the benefit of legal
professional privilege
• GWF did not, by its conduct, waive its entitlement to legal professional privilege
• GWF’s failure to mask the privileged material prior to production and its failure to seek an
injunction did not constitute an implied waiver of privilege
11.3 The Scope of Privilege
- not privileged:
1. can be obtained from collateral sources
2. facts that are patent eg. discovered by a simple search
3. communications that a client has instructed his solicitor to repeat to the opposite side
4. records of proceedings
5. communications by several parties employing the same solicitor (such communications are
privileged in respect of outsiders)
6. communications made in furtherance of a fraud or a crime is not privileged
Fraud of Client
Finers (a firm) v Miro [1991] 1 All ER 182
- Lawyer received money and set up trusts for his clients
- They subsequently found out that the money received was from a fraud
committed by the defendant
The court held that the rule of privilege was lost by the criminal intent of the client
– no privilege attaches to illegal acts and transactions
7. held in England that privileged communication can be disclosed in a national emergency although
this is a controversial decision: Essex C C v R (Times 18 September 1993) – power of Court to
overrule legal profession privilege. However see R v Derby Magistrates’ Court Ex parte B – House
of Lords held that legal professional privilege was a fundamental condition on which the
administration of justice as a whole rested
8. Public Interest
- certain government agencies or bodies are vested by statute with power to obtain information
- client’s permission or waiver must be given before you can release the information
- do not be overawed by the fact that the information is requested by some government agency as the
privilege will still apply
- some other examples:
1. officer under Prevention of Corruption Act called upon a solicitor to disclose a cheque which his
client had deposited with the solicitor, solicitor refused and claimed privilege under s. 128EA
2. contents of wills is privileged information. Solicitor cannot disclose the contents of the will to
anybody during the lifetime of the testator, may disclose the contents of the will to the executor
and to others only with the executors’ consent. Once probate has been granted, the will becomes a
public document
3. government departments may write to a solicitor for the whereabouts of the client or for other
personal particulars. If the name and address of the client has been disclosed to you on a
confidential basis, then you will be in breach if you disclose the confidential information to the
government agency
4. R v Bowden [1999] 4 All ER 43:
Defendant was arrested
On advice of his solicitor, however, he refused to answer questions, replying simply “no
comment”
Solicitor made a statement explaining why he had advised the defendant not to answer
questions
Defendant was subsequently charged with robbery
Defendant’s counsel was concerned that the jury should not draw adverse inferences from the
defendant’s failure to mention those matters to the police and elicited from the police officer
who gave evidence of the interviews the statement made by the defendant’s solicitor
Prosecution thereupon submitted that by putting the statement into evidence the defence had
waived the privilege which would otherwise have protected confidential communications
between the defendant and his solicitor, and entitled the prosecution to ask questions about the
advice given
Prosecuting counsel then cross-examined the defendant as to whether he had told his solicitor
that the holiday had been paid for with money provided by his mother and why the
photograph had been taken outside the restaurant
Defendant replied that he could not remember the conversation, but only the advice that he
should remain silent
Defendant as convicted and he appealed against his conviction, contending that on the facts
there had been no waiver of legal professional privilege, and the prosecution should not have
been permitted to ask questions about the factual basis on which his solicitor had advised him
to remain silent
During pre-trial questioning, no waiver of legal professional privilege arose
However, if at trial the defendant or his solicitors gave evidence or elicited evidence, not
merely of the defendant’s refusal to answer pre-trial questions on legal advice, but also of the
grounds on which such advice was given, the defendant thereby voluntarily withdrew the veil
of privilege which would otherwise protect confidential communications between his legal
adviser and himself
Defence had deliberately elicited evidence of the solicitor’s statement at the pre-trial
interview, there was nothing to suggest that he was not acting within the scope of his authority
and the defendant did not in any way dissent from or disown the statement
Appeal was dismissed
- Medcalf v Mardell and others [2002] 3 WLR 172:
• Lead and junior counsel made serious allegations of fraud against the claimant in a draft amended
notice of appeal
• Court of Appeal dismissed both the defendants; application to amend the notice of appeal and the
substantive appeal
• Claimant applied for a wasted costs order against the defendants’ counsel on the ground that they
could not have had before them “reasonably credible material” which established a prima facie
case of fraud
• The claimant sought to recover the costs if investigating and rebutting the allegations
• The defendants declined to waive privilege, and consequently counsel were unable to place before
the court privileged and confidential material relating to their instructions so as to demonstrate that
they had “reasonably credible material” which justified in making the allegations
• Counsel could not have had before them sufficient material to justify those allegations, their
inability to reveal privileged or confidential material did not make the hearing unfair
• It was nevertheless just to exercise its discretion in favour of making the order to compensate the
claimant for wasted costs caused by their misconduct
• On appeal by counsel, it was held by the House of Lords, that it did not require that when making
allegations of fraud in pleadings and other documents, have before him “reasonably credible
material” in the form of evidence which was admissible in court to support the allegations; but
that, at the preparatory stage, it was sufficient if the material before the counsel was of such a
character as to lead responsible counsel exercising an objective professional judgment to conclude
that serious allegations could properly be based upon it
• Further, since wasted costs orders had a penal effect upon counsel against whom they were made,
counsel were entitled to defend themselves against the making of the orders by placing before the
court, without restriction, all material which was relevant to the issue as to whether they had before
them at the time of settling the impugned documents “reasonably credible material” which
established a prima facie case of fraud
• As such, when, due to legal professional privilege, counsel were unable to defend their conduct of
a case by revealing their instructions and other relevant material, the court should not make the
wasted costs orders unless, proceeding with extreme care, the court could say that I t was satisfied
that there was nothing counsel could, if unconstrained, have said to resist the order, and that it was
in all the circumstances fair to make the order
• In the absence of the full facts, due to the defendants’ refusal to waive privilege, the court was not
entitled to speculate and infer that there could not have been any material upon which counsel
could have been justified in making the allegations of fraud, including, the allegations of
fraudulent interference with the court transcript; and that, accordingly, the benefit of the doubt had
to accrue to counsel, and the wasted costs orders would be quashed
- Exception – Rule 24(2)
Rule 24(2)
Notwithstanding paragraph (1), an advocate and solicitor may use the confidential information to reply or
defend any charge or complaint as to his conduct or professional behaviour brought against him whether in
Court or before a disciplinary tribunal of the Society.
- Can reveal confidential information to defend self against suit or complaint
- only to proceedgisn and not anyone else. Only for purpose of defending yourself
- This duty should also extend to circumstances where he knows of such situations and has the power to
prevent it
- NB: Must now read the decision in the light of Rule 33, as an Advocate and Solicitor is not permitted to
enter into a “prohibited borrowing transaction” which has been defined as any transaction under or by
virtue of which money or valuable security is borrowed (directly or indirectly and whether with or without
security) by an advocate and solicitor from his client or by an associated party from that client, unless the
client is an excepted person (eg. An authorised bank or finance company) (Rule 34)
- Solicitor may purchase only if it is at the prevailing market price or reasonable price – otherwise seen
that you have exerted undue influence
- This is subject to fiduciary rules, E.g. Self–dealing Rule
The solicitor must ensure than the valuation is accurate
Done independently
Even then, the Self-dealing rule states that such transaction are voidable
o Can make purchases from client as long as dealing at arm’s length
o Independent Third Party must be present to ensure fair price and that solicitor is not taking advantage
o Solicitor ought not to put himself forward as a prospective principal to deal with his client
o Should solicitor choose to do so, must ensure
Client received the most disinterest advice possible, as if the client was transacting with a third
party; or
Discharge himself as solicitor for the client and to advise client to appoint new solicitors;
And
Client has benefit of truly independent legal advice
o Solicitor should also ensure that any benefit received thereof by him must be fair and informed
o Must not take any advantage of his influence on his client to obtain the slightest benefit which he would
otherwise not obtain
- What is significant is very factual … if it is a client of little means, and has just secured a $10,000 judgment,
but giving you a $2,000 gift… the rules say that you should ask them to get independent legal advice…
however, it is easier to ask them to keep it etc
- “independent legal advice” has to be from another law firm
- another example of gift is where a deceased client leaves you significant gifts in his will
- Check to see if any undue influence (beneficiary)
o Should not take ‘significant’ gifts
o Should tell client to see another solicitor and discuss that intention (to make the gift) with him
o Be careful with gifts under a will or inter vivos gift
i. Contingency Fees
Rule 37 Legal Profession (Professional Conduct) Rules and s.107 Legal Profession Act
- It is illegal to:
Purchase an interest in the action of the clients,
Claim either a percentage of the client’s award, or
A fixed sum on the client winning the suit
- Such arrangements are commonplace in the United States
- But it illegal in Singapore on the basis of public policy
- A solicitor must be completely detached from his client’s cause
- Risk that litigation stirred up by the lawyer through the possibility of speculative rewards
Other jurisdictions:
o USA: Common practice for attorney to enter into that kind of arrangement
o UK: with Contingency Fee Arrangement (eg. Personal injury work)
• Note Law Society declined to follow the present UK position because there were policy reasons behind their
actions and a lot of safeguards
CHAMPERTY
- s. 107 basically states that no solicitor shall:
(a) purchase or agree to purchase the interest or any part of the interest of his client or
(b) enter in to any agreement by which he is retained or employed to prosecute any suit or action
or other contentious proceeding which stipulates for or contemplates payment only in the
event of success in that suit, action or proceeding
- solicitor cannot enter into any contingency fee arrangement with his client and he cannot finance the
client in the litigation
- r. 37 Legal Profession (Professional Conduct) Rules: an advocate and solicitor shall not enter into any
negotiations with a client for an interest in the subject matter of litigation nor for remuneration
proportionate to the amount which may be recovered by the client
- Thai Trading Co (a firm) v Taylor James [1998] 3 All ER 65:
• Mrs T employed her husband, who was a solicitor and a sole proprietor, to act for her on the
understanding that she would not pay anything if she lost
• In the course of taxation, the plaintiff challenged the amount claimed to be due from it on he
ground that there was no liability, as Mrs T was not legally liable to pay her solicitor his profit
costs
• The judge concluded that he was bound by authority to hold that the agreement, being an
agreement for a contingency fee, was contrary to public policy and void, so that there was no legal
liability on Mrs T to pay her husband’s profit costs and therefore, no liability on the plaintiff to pay
such costs
• The husband appealed
• On appeal, it was held that it was not now contrary to public policy for a solicitor acting for a party
to litigation to agree to forego all or part of his fee if he lost, provided that he did not seek to
recover more than his ordinary profit costs and disbursements
• Where however the solicitor contracted for a reward over and above his proper fees if he won, it
might well be that the whole retainer was unlawful
• There was nothing unlawful in the retainer, or in the client’s obligation to pay the solicitor’s proper
case if he won the case
- The husband, as a party entitled to be heard on the taxation proceedings forming the subject of the appeal,
and who was interest in and prejudiced by the decision, appealed.
*CA: If lawyer is in a relationship with the client, the arrangement is acceptable, since it is not pegged to the
amount of damages or a cut of what client obtained from winning the suit
Previous UK position
Aratra Potato Co Ltd v Taylor Joynson Garrett (a firm) [1995] 4 All ER 695
- Agreement to reduce the client’s costs by 20% for any case lost
- The court held that an arrangement for a differential fee was champertous
New UK position
- New statutory amendment now provide that it is lawful to enter into Conditional Fee Agreements
- “No win no fee” agreements
- Practical result was to transfer the entire cost of funding such litigation to the lawyers or liability insurers
of unsuccessful defendants
- Applied in Callery v Gary [2002] 1 WLR 2000
- Collective Conditional Fee Agreements Regulations 2000, SI 2000/2988
- Conditional Fee Agreements (Miscellaneous Amendments) Regulations 2003, SI 2003/1240
Rationale
- Promotes Plaintiff access to justice – good lawyer may judge merits of case and decide to trake up the
case, whom otherwise the plaintiff wld not have access to
- Force lawyers to be more careful in pursuing the client’s claims
- No risk in stirring up litigation as solicitors would not earn more than what they ordinarily would be
entitled to be paid
- Re Abdul Rahim Rajudin 1989 1 MLJ 289 (1991 1 MLJ 257): solicitors rendering exorbitant or
excessive bills, i.e. bills for sums totally out of all proportion to work done by them, lay themselves
open to disciplinary action
Abdul - Facts:
The appellant was suspended from practice as an advocate and solicitor for a period of two months by an order
of the High Court of Singapore. He was practising as a sole practitioner acting for one Peter Chaw (PC) in
relation to a purchase of certain property. By agreement of 4 February 1980, PC agreed to purchase the
property for $667,653 without vacant possession. PC then asked the appellant to find him a buyer and through
one Roland Mah (RM), introduced Philip Yap (PY) to PC. After negotiations, a price of $2,241,406.50 was
agreed for the property with vacant possession.
By a separate document (the note) signed by PC, he agreed to pay RM a commission of 50 cents per sq ft, and
the appellant through RM had asked for a commission of 25 cents per sq ft which was recorded in an
endorsement on the note, and RM agreed to pay out of his share. In April 1980, the appellant learned that PC
had previously agreed to sell the property to another purchaser. The appellant resolved the matter for PC
including a rescission of the agreement on payment of $273,036.63. In June 1980, PC asked the appellant to
write to PY to demand further payment on account of the purchase price payable under the sale agreement. PC
then entered into an agreement with the appellant (commission agreement) whereby he agreed to pay the
appellant $119,223.75 for the services rendered by the appellant in securing a buyer for PC. This was to be
inclusive of the appellant`s costs and disbursements from 4 October 1979 to 25 June 1980.
Following disputes between PC and PY in relation to the sale, the appellant was unable to act for either of
them. PY then issued a vendor and purchaser summons. The appellant then assisted PC on certain factual
matters. In April 1981, the appellant submitted a bill for $150,000 which included the sum of $119,223.75
payable under the commission agreement. The appellant stated that the sum included the costs and
disbursements for assisting in the vendor and purchaser summons and the sum of $69,000 was commission or
finder`s fee. PC did not pay the bill and the appellant commenced proceedings. PC then commenced
proceedings to tax the bill. A complaint was then lodged with the Law Society.
The Disciplinary Committee of the Law Society (the committee) investigated the matter and concluded that
the charges against the appellant were proved beyond reasonable doubt to the following extent:
(a) the commission or `finder`s fee` in the note, the commission agreement, the conversion of the commission
under the commission agreement to part costs and disbursements and part commission were all
unconscionable and overcharges warranting disciplinary action.
(b) the bill rendered by the appellant was an excessive bill in respect of the commission of approximately
$69,000 admitted by the appellant to be included therein; and
(c) the bill rendered by the appellant was an excessive bill in respect of the sum of $30,000 for work done after
June 1980.
There were three complaints before the High Court:
(1).That he took advantage of PC in demanding unconscionable commissions for putting through the
transactions relating to the property.
(2).That he committed a breach of r 14 of the Solicitors Remuneration Order 1974.
(3).That he rendered an excessive bill for $150,000.
The High Court was of the view that the second complaint on r 14 had no application and as to the third
complaint, they held that though the bill was excessive and submission of the bill constituted improper
conduct, the conduct was not grossly improper. However, they upheld the first complaint and imposed a
penalty of suspension from practice for two months. [See [1981] 1 MLJ 289 .] On appeal, counsel for the
appellant criticized the reasoning of the High Court as the conclusion was based on verbatim extracts from the
record of proceedings before the committee upon which they had made their findings. The High Court
conclusion was therefore beyond their powers and was wrong.
Holdings:
Held , dismissing the appeal:
(1).From the record of PC`s evidence quoted by the High Court, he was recorded as having stated that the
appellant demanded a commission of $1.25 per sq ft as a condition of his writing to PY, and further, PC
urgently required the money to pay American Express. It was plain that the High Court read the committee`s
comments, coupled with its conclusion that the commission charged under the commission agreement was
unconscionable, as a finding that PC had been under pressure when signing the commission agreement. The
High Court was entitled to reach this conclusion because it was an irresistible inference from the material
before them.
(2).It was clear that this head of complaint was within the terms of the formal complaint laid before the
Disciplinary Committee.
- Re Law Liat Meng [1992] 2 SLR 203: solicitors rendering exorbitant bills lay themselves open to
disciplinary action for they have abused the trust and confidence reposed in them
Facts
The complainant lodged a complaint with the Law Society that the respondent Lau overcharged him for
professional serviced rendered in obtaining letters of administration to an estate with assets of $68,394.
Lau charged the complainant $23,604.60 (later reduced by 5% to $22,454.60) based on his time-sheet
which he kept of the work done. The Law Society’s disciplinary committee (DC) found that Lau had in
several instances grossly exaggerated the time appearing in the time-sheet, and that this conduct amounted
to grossly improper conduct in the discharge of his professional duty within the meaning of s 83(2)(b) of
the Legal Profession Act (Cap 161, 1990 Ed) (‘the Act’). Accordingly, upon the Law Society’s application,
Lau was asked to show cause why he should not be dealt with under s 83 of the Act.
Held, ordering that the respondent be suspended from practice for three months:
(1) Solicitors rendering exorbitant or excessive bills lay themselves open to disciplinary action as they
abused the trust and confidence reposed in them.
(2) In considering whether all the elements of the charge of overcharging were proved, the first question
was whether the reduced fee of $22,454.60 was far in excess and disproportionate to what Lau was entitled
to charge for the services rendered. The next question was whether such overcharging, if proved,
amounted to grossly improper conduct in the discharge of his professional duty on Lau’s part.
(3) In this case, the DC’s findings were completely justified and the charge had been proved beyond
reasonable doubt. In view of the trust necessarily placed by lay persons in members of the legal profession,
the standards of behaviour expected of its members were high. Accordingly, Lau was ordered to be
suspended from practice for three months.
Re Lau Liat Meng [1992] 2 SLR 203
*Held: (CJ) Whether or not grossly overcharging depends on the facts
- Charged widow 1/3 of estate (for probate job) amounting to $16000
- Minimum sentence = suspension, since it amounts to a grievous breach of fiduciary relationship
- Solicitors rendering exorbitant bills lay themselves open to disciplinary action for they have abused the
trust and confidence reposed in them
See also Han Ngiap Juan [1993] 2 SLR 203
SECTION 9 – REMUNERATION
THE LAWYER’S INCOME AND THE GOODS & SERVICES TAX TREATMENT OF LEGAL SERVICES
3. INTEREST
4. DISBURSEMENTS
- constitute part of the consideration for the supply of professional services, GST is charged on them
- disbursement by a solicitor as agent on behalf of his client for services supplied directly to the client
would not attract GST
- the nature of each expense has to be examined to determine its GST treatment
- GST is chargeable on all “disbursements” except in the following situations:
a) The expense is clearly for a payment on behalf of the client for a supply of goods and services
made directly to the client;
b) The expense is for a stamp fee for filing documents in court or for other court fees
5. NON-LEGAL WORK
5.1 Types of non-legal – liability to disciplinary proceedings for engaging in certain kinds of trade, business or
calling
- a lawyer who “carries on in his employment any trade in any way incompatible with it or is employed
in such trade, business or calling” may be liable to disciplinary proceedings: s. 83(2)(i) Legal
Profession Act
Power to strike off roll or suspend or censure
83. —(2) Such due cause may be shown by proof that an advocate and solicitor —
(i) carries on by himself or any person in his employment any trade, business or calling that detracts from
the profession of law or is in any way incompatible with it, or is employed in any such trade, business or
calling;
Termination of retainer
41. An advocate and solicitor shall —
(a) permit a client to change his legal adviser at any time; and
(b) in the case where the outstanding fees are not agreed or paid, release all documents and offer any such
assistance as may be necessary to enable any other advocate and solicitor instructed to take over the matter
upon receiving an undertaking to protect his lien upon such documents.
6.1 Methods
- completion of business
- death of solicitor
- bankruptcy of client
- retainer which has not been given for a fixed or minimum period may be terminated by the client at any
time without his committing a breach of contract
- by the solicitor for good cause upon reasonable notice
6.2 Consequences
- Rule 41 Legal Profession (Professional Conduct) Rules: termination of retainer
- Rule 50 of the Rules states that the advocate and solicitor on taking over a matter from another solicitor
shall advise the client to pay the outstanding costs, if any, before accepting the brief
Termination of retainer
41. An advocate and solicitor shall —
(a) permit a client to change his legal adviser at any time; and
(b) in the case where the outstanding fees are not agreed or paid, release all documents and offer any such
assistance as may be necessary to enable any other advocate and solicitor instructed to take over the
matter upon receiving an undertaking to protect his lien upon such documents.
Taking over brief
50. An advocate and solicitor who finds, on receiving instructions, that acceptance of the instructions
would amount to his replacing another advocate and solicitor who has previously been instructed in the
same matter, shall inform the other advocate and solicitor that instructions have been given to him and
advise the client to pay the outstanding costs, if any, of the other advocate and solicitor before accepting
the brief.
6.3 Distinction between a Termination of Retainer and an Order of Discharge under Order 64, Rule 5(1) of the
Rules of Court
Withdrawal of solicitor who has ceased to act for party (O. 64, r. 5)
5. —(1) Where a solicitor who has acted for a party in a cause or matter has ceased so to act and the party has
not given notice of change in accordance with Rule 1, or notice of intention to act in person in accordance
with Rule 3, the solicitor may apply to the Court or the Court of Appeal, as the case may be, for an order
declaring that the solicitor has ceased to be the solicitor acting for the party in the cause or matter, and the
Court or the Court of Appeal, as the case may be, may make an order accordingly, but until the solicitor serves
on every party to the cause or matter (not being a party in default as to entry of appearance) a copy of the
order and files a notice in Form 143 of his having ceased to act as solicitor for the party, he shall, subject to
Rules 1 to 4, be considered the solicitor of the party till the final conclusion of the cause or matter, whether in
the Court or the Court of Appeal.
- Chew Kim Kee v. Kertar & Co [2004] SGHC 95:
• Chew’s claim failed because the solicitor and client relationship between Chew and the defendant
had already ended
• Chew had accepted the defendant’s termination of the retainer
• Also clarified that Order 64, Rule 5(1) of the Rules of Court does not imply that there is no
termination of retainer when there is no order to discharge the firm as the solicitor on record
• Rather, Order 64, Rule 5(1) only governs the position between litigants and third parties, and has
nothing to do with the position between a client and his own solicitor
I. SOLICITOR’S LIEN
- Common law also gives the solicitor to be terminated a general lien and a particular lien.
- A general lien is the right to retain property of the client already in the solicitor’s possession.
- A particular lien is the right to apply for the court’s intervention for the solicitor’s protection. This charges
the proceeds of a judgement recovered for the client in the course of litigation or arbitration in favour of the
solicitor.
- However the solicitor taking over the brief would normally be entitled that the papers under the general
lien be handed over.
- Upon an undertaking by the new solicitor that the lien would be preserved for the former solicitor –
see Rule 41(b) Legal Profession (Profession Conduct) Rules
- right of lien shld mot be to prej ot client’s case
Ismail and Anor v Richards Butler (a firm) [1996] 3 WLR 711
- The court exercised its inherent jurisdiction under RSC Ord 29 r.6 (which is in pari materia with our
- Rules of Court)
- Where the retention of the papers would interfere with the course of justice
- Ordered that the solicitor hand over his client’s papers to the client’s new solicitor
- Against an undertaking by the new solicitors that the lien be preserved
- But if the value of the lien would considerably be diminished by handing over the papers, the court require
the plaintiffs to provide security for outstanding claims in cost
Rule 42 - Withdrawal
(1) Subject to rule 41, an advocate and solicitor may withdraw from representing a client —
(c) if a client breaches an agreement with the • If client breaches agreement as to fees,
advocate and solicitor regarding fees or expenses only terminate retainer, or warrant to cut
to be paid by the client or regarding the client’s
conduct;
(e) if an advocate and solicitor has an interest in • Conflict of interest – includes personal
any case or matter in which the advocate and and professional
solicitor is concerned for the client which is • *How to withdraw in writing?
adverse to that of the client;
(g) where any other good cause exists. • Catch-all clause – Where lawyer has a
‘good cause’ to terminate
4. Client breaches an agreement with the lawyer regarding fees or expenses to be paid by the client or regarding
the client’s conduct
Robins v Goldingham [1872] LR 13 Eq 440
- The client failed to provide funds for disbursements
- Lawyer could validly withdraw from the retainer
o when you have put into the agreement that you can discharge yourself because costs are not paid [in the
absence of a written agreement to explain that if they don’t pay, you can withdraw, you are stuck with the
client]
5. Client makes material misrepresentations about the facts of the case or matter to the advocate and solicitor
- situation when the client’s conduct makes it impossible for you to act as his agent and advisor e.g. is lying
to you… or where the client has no regard for your legal expertise… (have to put it in writing that because
of the list of actions, you are discharging yourself)
8. Where such action is necessary to avoid a contravention by the advocate and solicitor of the Act or these Rules
or any other subsidiary legislation made under the Act
Rule 42(2) – require sufficient notice to terminate, since client has a personal interest
Rule 42(2)
Where an advocate and solicitor withdraws from representing a client, he shall take reasonable care
to avoid foreseeable harm to the client, including —
(a) giving due notice to the client;
(b) allowing reasonable time for substitution of a new advocate and solicitor;
(c) co-operating with the new advocate and solicitor; and
(d) subject to the satisfaction of any lien the advocate and solicitor may have, promptly paying to
the client any moneys and handing over all papers and property to which the client is entitled.
- for civil litigation matters, require an order of court for withdrawal (done by summons in chambers)
- for criminal matter, do it by way of oral application in open court
- however, if assuming that you find that the client is lying etc… unless the exceptions to the privilege rule
applies, you have to state in your affidavit that if I continue to act, then would breach my duty to the court
etc… the judges usually will not ask (don’t just state all the facts)
- when you decide to withdraw, the timing to withdraw has to be decided very carefully
o because s40(2), you cannot withdraw is you are going to cause him foreseeable harm … must give
him sufficient notice, and adequate time to find another solicitor
in practice, will usually, tell another lawyer the brief facts and ask whether they are
willing to take the case
- KE Hilborne v. Tan Tiang Quee [1972] 2 MLJ 94: only nominal damages were awarded to the client,
solicitor involved failed to seek his client’s instructions upon receipt of a letter from the vendor’s
solicitors regarding completion
KE Hilborne - Facts:
These appeals were by two lawyers against the decision of the trial judge who found them negligent in the
conduct of a land transaction on behalf of a former client, the respondent. The respondent in both these
appeals was a building contractor and a small property developer.
The respondent claimed damages for loss and expense caused by the negligence or breach of contract of the
respondent`s solicitors in the purchase of a piece of property and in proceedings and matters relating thereto.
The negligence or breach of contract alleged was the failure of the firm to notify the respondent of the receipt
of a letter from the vendor who gave notice that the contract of sale was required to be completed within a
certain period. The loss or damage alleged to have been suffered by the respondent was the loss of opportunity
of completing the purchase on the vendor`s terms with the prospect of obtaining vacant possession at a later
date or, alternatively, with the prospect of suing the vendor for damages for failing to give vacant possession.
The firm acted on behalf of both the vendor and purchaser in this land transaction.
The trial judge held that the first plaintiff had failed in his duty to the respondent, but awarded the respondent
only nominal damages of and costs on the ground that the respondent had consistently denied signing the
contract of sale.
The first appellant appealed against the whole judgment, including the order as to costs. The second appellant
appealed only on the costs order.
The respondent cross-appealed on the ground that the trial judge was wrong in awarding nominal damages and
ought to have awarded substantial general damages.
Holdings:
Held , dismissing the appeal:
(1).It was plainly the duty of the firm to notify the respondent of the contents of the letter from the vendor, and
to seek the respondent`s instructions on the contents thereof. This was the clearest possible case of breach of
duty on the part of the firm, and in particular, on the part of the first appellant. He was clearly negligent in that
under the retainer he failed to exercise the care that he was required by law to show towards his client. A
reasonably careful and competent solicitor acting for both parties would have sought their instructions
immediately.
(2).The trial judge was entitled on all the evidence and on his assessment of the credibility of the respondent,
to reject the respondent`s evidence. Therefore, any pecuniary loss that the respondent suffered did not flow
naturally from the breach of duty on the part of the first appellant or his firm.
(3).The cause of action was breach of contract and not tort. Therefore, the principle was that a plaintiff, even
though he in fact suffered no pecuniary loss arising from a defendant`s breach of contract, was in general
entitled to nominal damages.
(4).There was no reason to interfere with the trial judge`s discretion in awarding the costs of the trial to the
respondent.
- Fong Maun Yee & Anor v. Yoong Weng Ho, Robert [1997] 2 SLR 297:
• Claimed that through the negligence and lack of exercise of professional care, skill and diligence
due to them by the respondent Yoong, a lawyer, they had parted with $806,000 to a property agent
• Alternatively, they asserted that Yoong had negligently represented to them that Fontana Pte Ltd
wanted to sell the property known as 9 Ewart Park (‘the property’) and appointed him as their
solicitor
• They claimed that they had relied on Yoong’s representation and parted with the monies
• High Court judge found that Yoong’s conduct had not fallen below the standard of a reasonably
competent conveyancer for not verifying his instructions to act for Fontana as there was no
necessity to do so
• Also found that Yoong had not acted in breach of his duty to exercise professional care, skill and
diligence by acting on the basis that the documents presented to him by Foo were valid
• Soh and Fong appealed
• Issue on appeal was whether Yoong ought to have verified with Fontana his instructions to act for
Fontana in the sale of property before acknowledging to Soh and Fong that he had been so
instructed merely on the strength of Fontana’s resolution and the option
• Allowing Fong and Soh’s appeal, the Court of Appeal held that Foo was not Fontana’s officer or
employee but a person who held Fontana’s option and was seeking to benefit from it
• Yoong ought not to wave the resolution at Soh
• In doing so, Yoong impliedly represented that Fontana wanted to sell the property and that he had
been appointed by Fontana to act in the sale
• There was therefore a misstatement and a warranty
• Failing to verify his instructions to act for Fontana and therefore acting without authority, Yoong
did not meet up to the standard required of him of a reasonably competent conveyancing solicitor
• He had breached his duty of care and skill to Soh and Fong
• Thus, Yoong was ordered to pay three-quarters of the monies which Soh had paid to Foo
- settled practice, various conveyancing practices in other jurisdictions could serve as useful guidelines
- Silverman, The Law Society’s Conveyancing Handbook and para 9.05 of The United Kingdom Law
Society’s Guide to the Professional Conduct of Solicitors (1990)
- Chong Yeo & Partners & Anor v. Guan Ming Hardware & Engineering Pte LTd [1997] 2 SLR 729:
• Plaintiffs were clients of the defendants, a law firm
• Applied for summary judgment in a claim by the clients against the debtor
• Application was adjourned because the firm had failed to exhibit any documents in the affidavit
filed in support of the application for summary judgment, contrary to the new provisions of Order
14
• By the time the summary judgment was obtained, a receiver had been appointed over the debtors,
and it was eventually ordered to be wound up
• Clients sued the firm on the basis that it had been negligent in failing to exhibit documents in the
supporting affidavit of the Order 14 application
• The firm’s defence was that there was no negligence, nor causation
• Judge found that the firm had been negligent but found against the clients on all other issues
• Judge also found that there was no immunity applicable in the circumstances
• Firm appealed
• Court of Appeal held that the Rondel v. Worsley immunity did not apply in Singapore
• Accordingly, a claim in negligence against an advocate and solicitor was not barred save where
that claim was against the conduct of a criminal case
• In such case, the bar arose not because of immunity, but because the action was an abuse of the
court process
• Therefore, the only duty of care owed by the firm was the general duty to take care in the conduct
of the proceedings, and not to cause any delays
• Firm did not owe any duty to guard against the winding up
• Such an obligation would impose too heavy a burden on advocates
• However, the Court of Appeal found that the firm had clearly erred in failing to exhibit the
necessary evidence in the Order 14 application
• Nevertheless, the firm’s breach only allowed for an opportunity for the winding up to intervene
• The winding up was therefore a break in the chain of causation
• It was held that the firm’s breach of duty only caused a delay in recovery
• Since the firm’s breach only caused the actual loss of the clients being out of pocket for the period
of delay occasioned by the breach, the sum to be recovered was the loss of use of money
- Wai Wing Properties Pte Ltd v. Lim, Ganesh & Liu (sued as a firm) [1994] 3 SLR 101, held:
• that a solicitor is expected to use reasonable care and skill in giving such advice and taking such
steps as the facts of the particular case demand, and the standard of care and skill required is that of
a reasonably competent and diligent solicitor
• if there was a necessary step to be taken, a solicitor should advise his client of that
• he should not wait for the client’s specific instructions
Facts
The plaintiff client WWP sued the defendant firm of solicitors LGL claiming damages for professional
negligence. The negligence arose when WWP received two letters of demand from their clients under s 254(2)
of the Companies Act, claiming payment. Upon the receipt of these two letters of demand, WWP’s managing
director, Kwok consulted Liu of LGL, and retained him to act for WWP. WWP commenced the action against
Liu, Ganeshamoorthy and Lim, the then partners of LGL for professional negligence in respect of Liu’s
negligent omission to reply to the statutory notices. In defence, WWP argued that: (a) the presentation of the
winding-up petition was not caused by Liu’s omission in responding to the statutory notices; (b) alternatively,
the single omission could not amount to negligence or lack of reasonable care; (c) it was not a term of the
retainer that LGL were to prevent or forestall the presentation of a winding-up petition; and (d) WWWP failed
to prove that they suffered any loss such that they were entitled to damages, and even if there were such
losses, it was argued that the losses or some of them were not foreseeable.
Held, allowing the plaintiffs’ claim:
(1) Giving a reply to the statutory notices was within the scope of Liu’s retainer. Liu had the general conduct
of the matter and that included advising and doing all that was necessary to protect the interest of the client. In
the circumstances a reply was really imperative.
(2) A solicitor was expected to use reasonable care and skill in giving such advice and taking such steps as
the facts of the particular case demanded. The correct test was what a reasonably competent legal practitioner
would do having regard to the standards normally adopted in his profession. By not writing to explain why
WWP refused to pay Lee (one of the two clients), Liu had failed to take the necessary steps to protect WWP’s
interests.
(3) It did not matter whether Kwok specifically instructed Liu to write the letter. A solicitor should
advise his client of a step that ought to be taken. He should not wait for the client’s specific instructions
if it was a necessary step to take.
(4) What happened was not an error of judgment. In any case, a solicitor cannot escape liability by merely
labelling a mistake as an error of judgment. It depends on the nature of the mistake. The failure to reply to the
statutory notice would convey to Lee and his solicitor the impression that WWP had no defence to the notice
and that WWP were just being difficult or unreasonable in refusing to pay the sum claimed. Causation was
thus established.
(5) On the question of damages, it made no real difference whether the case was one in contract or tort. In
order to succeed on any item of loss, not only must the plaintiff establish that the loss was caused by the
defendants’ negligence or breach of duty, but also that it was foreseeable, in contract as at the date of the
contract and in tort, as at the date the tort was committed.
(6) Liu was not entitled to be paid for the work he did on the winding-up petition and those directly relating
to or flowing from that. However since the district court actions had nothing to do with Liu’s failure to reply to
Lee’s statutory notice, Liu was entitled to payment.
(7) WWP’s losses as a consequence of LGL’s breach of duty as solicitors should be particularized. Since no
specific figures were proved to show WWP’s losses on the frozen bank accounts, and since there was a serious
question of remoteness, no award was made for the unspecified claims.
(8) WWP was not entitled to general damages for the injury caused to the fair name of the plaintiffs as a
result of the winding-up petition being advertised in the media. In omitting to send out the reply to the
statutory notice, Liu did not intend to injure WWP’s reputation or credit. WWP was only entitled to
compensation for the losses and expenses they actually incurred on account of the omission.
- duty of a solicitor witnessing the execution of documents: Lee Siew Chun v. Sourgrapes Packaging
Products Trading Pte Ltd & Ors [1993] 2 SLR 297
Facts
The plaintiff Lee sought to set aside a mortgage over a property which she and her late husband granted in
their joint names to the second defendant bank OCBC. The mortgage was to secure a joint and several
guarantee by them of facilities granted by OCBC to the first defendant Sourgrapes. Lee’s son forged her
husband’s signature on the document and she signed after being told by her son that the document was a
testimonial as to his character. The document was executed after her husband’s death. The signatures were
witnessed and attested to by a legal assistant in the employ of the third defendants. Sourgrapes did not enter an
appearance. In a third party action, OCBC claimed an indemnity from the first and third defendants and the
legal assistant. The third defendants further claimed indemnity or damages against the legal assistant in fourth
party proceedings.
Held, dismissing the plaintiff’s claim against the second defendants, allowing the second defendants’
counterclaim, allowing the plaintiff’s claim against the third defendants in part and allowing the third
defendant’s claim against the legal assistant:
(1) For relief on her plea of non est factum, Lee had to show that the document she executed was
fundamentally different from that which she believed it to be and that she was not negligent in signing the
document but took the precautions which a reasonably prudent person would have taken before signing it.
(2) On the facts, Lee’s son tricked her into signing the mortgage and when she signed the last two pages of
the mortgage document, she did not know the nature of the document. The documents Lee signed were
fundamentally different from the documents she believed them to be. However, she was careless in signing the
mortgage document. She deliberately chose not to read the pages she signed and relied instead on her son’s
explanation as sufficient without querying or checking, thereby depriving herself of the opportunity to be put
on notice. Given that she was semi-literate in English and her working experience as a teacher, with a
reasonable amount of common sense she should have realized that the pages she had been asked to sign were
inconsistent with a testimonial. Lee bore the onus of proving that she was not careless and she failed to
discharge it.
(3) On the facts, the legal assistant assumed the responsibility of acting as solicitor for Lee and her husband
even though he had not met them and had not been contractually retained by them. It followed that the legal
assistant owed Lee the same duty and standard of care he owed to a paying client. His conduct in signing the
mortgage as a witness and issuing his attestation certificate was clearly negligent.
(4) It was no objection to Lee’s claim in negligence that her loss was purely economic or that the statements
made by the legal assistant were made to a third party resulting in financial loss to her. It was also clear that
the legal assistant’s negligence placed Lee in a position she should never have been in where she was at risk as
a guarantor and mortgagor, and the only dispute was the extent of responsibility to attribute to him. The third
defendants were vicariously liable for the legal assistant’s negligence.
(5) However, Lee was contributorily negligent in executing the mortgage for the same reasons as those for
which her plea of non est factum failed. Liability was apportioned in equal shares between Lee and the third
defendants as employers of the negligent legal assistant.
(6) Although the third defendants did not plead contributory negligence and only applied to amend their
defence to plead contributory negligence after the closing submissions, the balance of justice demanded that
the amendment be allowed because the true defendant was the legal assistant, a personal litigant who would
bear the primary responsibility for satisfying any judgment, and the plaintiff’s plea of non est factum put the
issue of her own carelessness at the forefront of the case. In any event, the third defendants had, in their
original defence, pleaded that Lee recklessly or negligently signed the document.
(7) The legal assistant acted in breach of the implied obligations under his contract of employment with the
third defendants that he would exercise reasonable skill and knowledge, care and diligence. The third
defendants were therefore entitled to full indemnity from the legal assistant in the fourth party action.
Note:
Director or employee of a law corporation is subject to the same standards of professional conduct and
competence with respect to legal services offered as if he were personally providing the legal services:
s. 81D(3)
Effect of company becoming law corporation
81D.—(3) A solicitor who provides legal services as a director or an employee of a law
corporation shall be subject to the same standards of professional conduct and competence in
respect of such services as if he were personally providing the legal services as a solicitor in a
law firm.