Sunteți pe pagina 1din 61

f4.

CODE OF ETHICS – RELATIONSHIP AND DEALINGS WITH CLIENTS

VERY IMPT!!

- Guiding principle: “Best interests of client”


 be fair and honest to client!!!
 counterbalance with duty ot court – see other lecture
- the whole reason for existence of lawyers is the clients, the brief

THE SOLICITOR’S CONTRACT OF RETAINER -> THE RELATIONSHIP OF SOLICITOR & CLIENT

1.1 Important Relationship


- adjusting, balancing and maintaining of the rights and duties of members of the community and of the
State
- every member of the community should be entitled to have legal advice and representation
- every member of the community should be free, in seeking that advice and representation, to be entirely
frank and open, without fear that what he confides in his legal adviser will later be disclosed
- further requires that the person giving the legal advice or representing the client should be free and
indeed bound to do so fearlessly and in a spirit of dedication to the ideal of maintaining the system of
law in the community
- solicitor’s contract with his client imparts special obligations on the part of the solicitor

1.2 Unique Relationship


- must not have any personal interest
- must inform his client of any personal interest
- must not obtain any personal advantage or profit out of the relationship
- must not make use of knowledge or information acquired by him through his professional relations with
his client
- must not divulge confidential communications
- must faithfully, honestly and consistently represent the interests of, and protect the rights of his client
- discharge his duties to his client with the strictest fidelity, to observe the highest and utmost good faith
towards him and to obey his lawful directions
- he is an officer of the court and is pledged to preserve the system of law in the community
- court therefore exercises a supervisory function and at all times require of him a high standard of
frankness and honesty with the court
- the authority of the solicitor, whilst generally governed by the ordinary rules of agency, is, in many
respects, quite different from and more extensive and exacting than that of a general agent
- because of the overriding importance of the client’s interest and because of the client’s ultimate
importance to the system of law, the client is in a number of ways placed in a far more favourable
position with relation to the solicitor than the ordinary principal is in relation to his agent
- transactions between a solicitor and his client are presumptively fraudulent and invalid, with the burden
of proving their fairness and honesty cast on the solicitor
- since the solicitor enjoys a monopoly in performing legal work, and because of the fundamental
importance of that work to the community, the solicitor’s charges, unlike those of other agents, are to
some extent regulated by statute and ultimately supervised by the court
- must not share or agree to share his professional fees with any person except another solicitor or a
lawyer practicing outside the jurisdiction

THE FORMATION OF THE CONTRACT

(a)Obtaining and Acceptance of Instructions - Retainer -

2.1 Written Retainer


2.2 Defining Instructions

2.3 Providing Instructions


- it is not for an advocate and solicitor, whether in his capacity as counsel or solicitor, to believe or
disbelieve his client’s instructions, unless he has personal knowledge of this matter or unless his client’s
statements are inherently incredible or logically impossible
- his duty to his client does not go beyond advising him of the folly of making incredible or illogical
statements
- Wright v. Castle [1817] 3 Mer. 12: “there must be a special authority to institute, although a general
authority is sufficient to enable a solicitor to defend a suit”
- Allen v. Bone [1841] 2 Beav. 493: “it is the duty of a solicitor to obtain a written authority from his
client before he commences a suit … An authority may, however, be implied where the client
acquiesces in and adopts the proceedings; but if the solicitor’s authority is disputed, it is for him to
prove it, and if he has no written … court will treat him as unauthorized …”
- Murphy v. Leisfield [1930] VLR 142: “…have regard to all the circumstances including the credibility
of the witnesses which tend to throw weight on to the one side or the other.”
- Re O’Sullivan, Wilson v. Bedford [1937] Q.S.R. 50, same principle applied
- Active Timber Agencies Pte Ltd v. Allen & Gledhill [1996] 1 SLR 478, held: the act of authorizing or
employing a solicitor to act on behalf of a client constituted the solicitors’ retainer by the client
Facts
The defendant law firm A&G were retained by one Cam on behalf of Toro Holdings of Vanuatu, and one
Adam during the period August to September 1993. At that time, Tiang, who was the beneficial owner of all
the issued shares in the plaintiff company ATA, a Singapore registered company, was negotiating with Cam to
buy the entire shareholdings of another Vanuatu company. Sometime around 31 August 1993, Tiang signed the
sale and purchase agreement and paid Cam US$100,000 pursuant to the terms of the agreement. On or about
1 September 1993, Tiang paid a further US$250,000 into the clients’ account of A&G. Apart from the payment
of this sum into the clients’ account of A&G, there was no communication whatsoever between Tiang and
A&G. Subsequently, the sale was aborted, and Tiang instructed his solicitors to demand from A&G, the return
of the US$250,000. A&G repoleid that they received the money on their Vanuatu clients’ instructions, and thee
moneys were paid out from the account in September 1993 in accordance with their instructions. ATA then
commenced this action alleging that: (a) A&G received the US$250,000 into their clients’ account as agents
for ATA; (b) by electing to retain the said sum and disbursing it subsequently, A&G were also acting as
solicitors for ATA; and (c) by disbursing the said sum without instructions and without prior communication
from ATA, A&G acted negligently and were in breach of their duty of care in contract and tort. A&G denied
liability to ATA, and stated that they acted as agents for their own clients and never as agents for ATA. The
assistant registrar struck out ATA’s statement of claim on the ground that it disclosed no reasonable cause of
action against A&G pursuant to O 18 r 19 of the Rules of the Supreme Court (RSC), and ATA appealed,
arguing that there existed a solicitor-client relationship between them and A&G and that when a solicitor
accepted moneys into his client’s account from an identified source, the law implied proximity and a special
relationship between them. In such a situation, the solicitor could not act willy-nilly in disbursing the moneys
so paid and must seek prior consent or clarification from the person before paying out the money..
Held, dismissing the appeal:
(1) The threshold question in this appeal related to the ambit of the court’s powers under O 18 r 19 RSC. The
said rule provided, inter alia, that the court could at any stage of the proceedings, order to be struck out any
pleading on grounds that: (a) it disclosed no reasonable cause of action; or (b) it was scandalous, frivolous or
vexatious.
(2) Whichever way one looked at it, the degree of proximity between ATA and A&G was such that the
relationship between the parties was marked only by the extreme distance between them. ATA’s self-confessed
inaction for a prolonged period after the remittance of the funds did not support their contention that ATA did,
from the outset, contemplate bringing about reciprocal obligations characterised by mutual rights and duties
between the parties. The contention that the plaintiffs expected to be billed and that they expected due care and
advice was plainly absurd.
(3) Having regard to the manner in which the action proceeded and the pleadings presented, to put this case
forward for hearing would be an abuse of the process of court. It was a plain and obvious case where the
summary procedure provided under O 18 r 19 should be invoked. The allegations contained in the statement of
claim did not support the view that there was a cause of action with any prospect of success. ATA would have
to look elsewhere, ie to the Vanuatu parties for their relief and not A&G. Appeal dismissed with costs.

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

Rule 12 Legal Profession (Profession Conduct) Rules


- An advocate and solicitor shall act consistent with the retainer agreement.
- Although there is not set form for the retainer agreement, prudence suggest a written retainer is
better.
 It is the best evidence that there is a solicitor-client
 It defines the lawyer’s instructions
 retainers are wel drawn doc with grat no of clauses with what lawyer and client obliged to do
and what happens in event that either x do what is required
 It proves the instructions from the client in the event of a dispute Warrant to Act: Order 64 Rule
7, Rules of Court
o Allen v Bone [1841]
 A suit instituted by a solicitor without authority was dismissed
 The costs of the action was borne solely by the solicitor

ii. Warrant to Act


- Where the authority of a solicitor to act is disputed, it is for the solicitor to prove that he is authorised.
- Usu happens when purport to act for company. Warrant to act then becomes impt – statement that authorized
to rep client; extension of retainer agreement
- Order 64 Rule 7, Rules of Court:
 Every solicitor representing any party in any cause or matter shall obtain from such party or his
duly authorised agent a warrant to act for such party, either generally or in the said cause or
matter. – (need power of attorney to have actual client transfer authority to agent)
 The absence of such warrant shall, if the solicitor’s authority to act is disputed, be prima facie
evidence that he has not been authorised to represent such party.
- Tung Hui Mannequin Industries v Tenet Insurance Co Ltd and Others [2005] 3 SLR 184
 Request was made to Plaintiff’s solicitors to produce warrant to act under a suspicion that there
was no authority to act. Plaintiff’s solicitors refused to accede to the request.
- Order 64 r 7(1) of the Rules of Court made it mandatory for every solicitor who was representing any
party in any cause or matter to obtain a warrant to act from that party. The warrant was to serve as proof of
the solicitor’s authority whenever such proof was needed and not only if the client himself subsequently
disputed it

Warrant to act (O. 64, r. 7)


7. —(1) Every solicitor representing any party in any cause or matter shall obtain from such party or his duly
authorised agent a warrant to act for such party, either generally or in the said cause or matter.

- 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.

- principles of agency law come in – implied/ apparent authority


- rule of prudence is to req board resolution esp wher doing large transactions
 even if this forged, at least you have served due diligence. As much diligence as can be reasonably
done by anyone then canomt be faulted
- don’t want to go deep into the case only to find out that not in fact properly instructed.

Rule 23 Legal Profession (Profession Conduct) Rules


Authority of client’s agent
23. An advocate and solicitor shall ensure that an agent giving instructions on behalf of a client has the required
authority to do so 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

- 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.

iv. Refusal of the retainer


- Free to contract
- Solicitor’s independence
- A solicitor must be able to give impartial and frank advice to his client
 if not may be said that you have not acted in best interests of client because had other interests to
protect
- Free from external or adverse pressure of other interest which would destroy or weaken this independence
- Situations which might affect his independent judgment:
a. Retainer may place him in a position of conflict
- Risk that relations with this client might disadvantage a former client
- Work would require him to cross examine a friend or relation – you can refuse a brief based on this
- client relations impt commercially but also reslt of bad client relations that is source of discip action and
complaints. Complaint fr own client is more worrying for lawyers. Need to watch out and ensure that client
relations are superb. Grateful client is best advert!

b. Solicitor lacks reasonable competence in a matter where specialist skills needed

c. Client is unreliable

d. Solicitor knows client to be malicious and vindictive

e. Solicitor knows that there is an existing retainer between the client and another solicitor

f. Solicitor knows that his acting might be in breach of some law


- The court has to inherent power to direct that improper solicitor be restrained
- PP v Vengadasalam [1990] 1 MLJ 507
 Prosecutor alleged that solicitor for the accused was a material witness
 The court has the jurisdiction to restrain solicitor from acting but is slow to interfere, as it
regards with the right of a party to choose his lawyer
 On the facts, the prosecution failed to show the solicitor was a material witness
o onus of proof is on the prosecution to provide the court with some material to indicate that the counsel
provide the court with some material to indicate that the counsel in question is a witness who is required to
give material evidence.
o The prosecution had not shown sufficient evidence why the solicitor was a material witness and allowed the
solicitor to remain
o Held: Malaysian HC set aside order of magistrate to be removed from acting for the accused on the ground
that he had been summoned to appear as a witness for the prosecution in the case against the accused.

2.4 Duties to Third Parties


- general rule was that, subject to his duties to the court and the professional duties imposed upon his
profession, a solicitor when acting for his client owed no duty to third parties
- A & J Fabrication (Bartley) Ltd v Grant Thornton and Ors [1999] PNLR 811
- Dean v. Allin & Watts [2001] 2 Lloyd’s Rep 249:
• special circumstances in a particular case might require a different conclusion
• on being satisfied that it was fair, just and reasonable to do so, the law would impose a duty of
care on a solicitor to a third party, when he was instructed by his client in relation to a loan
transaction and he knew, or ought to have known, that the third party, as the lender, was not
obtaining independent legal advice but was relying on him to set in place an effective security
for the loan

2.5 Implied Retainer


- Gavaghan v Edwards [1961] 2 QB 220
- Client who has by his conduct performed part of the contract of employment may also be held to have
employed the retained solicitor
- Court will not be willing to imply the existence of a retainer, whose name has been joined as a plaintiff
in a suit and without his authority, does not take steps to have his name removed from the record when
he becomes aware of the facts
- Hall v. Laver [1842] 1 Hare 571
- Re Becket, Purnell v. Paine [1918] 2 Ch 72
- Foong Maun Yee & anor v. Yoong Weng Ho Robert [1997] 2 SLR 297
[Editorial Note: Appeal allowed by the Court of Appeal on 14 August 1996]
Facts
The second appellant Soh was a property developer of ten years and the first appellant Fong was his secretary.
They 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 one Foo a property agent known to
both Soh and Yoong. Alternatively, they asserted that Yoong had negligently represented to them that Fontana
Pte Ltd (Fontana) wanted to sell the property known as 9 Ewart Park (the property) and appointed him as their
solicitor. They had relied on Yoong’s representation and parted with the monies to Foo.
Sometime in July 1994, Foo rang Soh to seek out his interest on the property. Soh thought that $300 per sq ft
was a good price for the land in that area and confirmed his interest. Foo faxed a letter to Soh from Bangkok
to confirm the telephone conversation. In August 1994, Foo accompanied Soh to view the property from the
outside. They agreed on the purchase price at $12.8m. Soh agreed to pay Foo another $1.1m in consideration
for Foo securing the option to purchase the property from Fontana. The option was purportedly signed by
Fontana’s managing director. A company resolution dated 10 August 1994, purportedly passed by Fontana’s
directors, appointed Yoong to act for them in the sale. Soh and Yoong did not know that these documents were
forgeries. Yoong carried out a company search and confirmed to Soh and Fong that the persons who had
signed the resolution and option were at the material time Fontana’s directors. Soh nominated Fong to
exercise the option as his nominee. Yoong never obtained the letter of appointment from Fontana before Foo
disappeared with Soh’s monies.
The 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. The judge
also found that Yoong had not acted in breach of his duty to execise professional care, skill and diligence by
acting on the basis that the documents presented to him by Foo were valid and held that the losses of Soh and
Fong must lie where it fell. Soh and Fong appealed. The issue 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.
Held, allowing the appeal:
(1) 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 to have verified with Fontana and not waved 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 a misstatement and a warranty.
(2) By 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 and skill to Soh and Fong.
(3) The law did not require that negligent misrepresentation be the sole or decisive factor in inducing the
representee to act. It was sufficient if it played a real and substantial role in causing the representee to act to
his detriment. On the facts, though Soh harboured suspicion about the transaction with Foo even after Yoong
had told him Fontana wanted to sell the property, the fact was that Soh was persuaded to go ahead with the
transaction because of Yoong’s misleading impression.
(4) The defence of contributory negligence applied where the relevant evidence established that the cause of
damage uffered by the appellant was the combination of the fault on his part and the wrong doing of the
respondent. On the facts, Soh ought to disclose to Yoong of his reservations on the ‘cheap’ price. His failure
to do so contributed to his loss as to do so, Yoong would have been put on his guard against Foo and less
likely to have acted in the way he did.
(5) Yoong was ordered to pay three –quarters of the monies which Soh paid to Foo.
Per Curiam:
(1) The conveyancing practices in other jurisdictions could serve as useful guidelines as to what constituted
good conveyancing practice in Singapore in the absence of any settled or well-accepted practice. Paragraph
1.3.1 of Silverman, The Law Society’s Conveyancing Handbook (1993) (England) and para 9.05 of The United
Kingdom Law Society’s Guide to the Professional Conduct of Solicitors (1990) truly reflected good
conveyancing practice. They were sensible and helpful guidelines to practitioners engaged in conveyancing
practice in Singapore and ought to be adopted and where possible followed so as not to be exposed to the risk
of acting without authority.
(2) Although there was no clear authority as to whether the defence of contributory negligence was available
in an action founded on an implied contract, the English Court of Appeal had decided that where a defendant’s
liability in contract was concurrent with an identical duty in tort, the defence of contributory negligence was
available to the defendant. This view made much sense and should have been adopted with respect to the
action for breach of warranty of authority.

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].]

SECTION 3 – RETAINERS BY PARTICULAR PERSONS

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

3.2 Mentally Disabled Persons


- is voidable, not void
- contract will not be avoided unless it is shown that the mental disability was known or ought to have
been known by the other contracting party
1) cannot have any operation where the solicitor’s retainer to act for a mentally disabled person is
challenged, because a defendant may, in a proper case, obtain an enquiry into the facts, whether the
plaintiff was competent
- should the enquiry result in a finding of incompetence, the solicitor may be personally liable for the
defendant’s costs
2) enquiry may be ordered as to whether the action is for the mentally disabled person’s benefit
- when it is shown that an action is not for his benefit the court will stay it
- if plaintiff is in fact sane, he may apply to have the action dismissed and the litigation representative
ordered to pay costs
- Marsh v. Sofaer and Another [2004] PNLR 24, court held that:
1. Communications by a client to her solicitor were of a confidential nature. Therefore conclusions
reached by a solicitor from information so communicated were also confidential
2. Without a client’s consent it was not open to solicitor under one retainer to communicate
information passed by the client to a solicitor involved under another retainer. It was beyond
argument that the mere fact that two solicitors were employed on different matters by the same
client was insufficient to justify the passing of confidential information form one solicitor to the
other
3. The mere fact of low intellect could not justify or widen a breach of confidence
4. There was no developing jurisprudence in this area. A solicitor’s duty of confidence was absolute
unless there had been some relaxation by law or by the client

3.3 Married Women


- s. 51(c) Women’s Charter sets out the capacity of a married woman to sue and be sued in her own name
and to be entitled to all remedies and redress
Capacity of married women
51. Subject to the provisions of this Act, a married woman shall —
(a) be capable of acquiring, holding and disposing of, any property;
(b) be capable of rendering herself, and being rendered, liable in respect of any tort, contract, debt or
obligation;
(c) be capable of suing and being sued in her own name either in tort or in contract or otherwise and shall
be entitled to all remedies and redress for all purposes; and
(d) be subject to the law relating to bankruptcy and to the enforcement of judgments and orders,
in all respects as if she were a feme sole.
3.4 Companies (Pre-incorporation)
- s. 41 Companies Act: a contract made pre-incorporation on behalf of a company be a person acting
under its authority express or implied, and whether made in writing or orally, is effectual in law, and
binds the company and its successors and all other parties thereto and may be varied or discharged in
the matter in which it is authorized to be made
Ratification by company of contracts made before incorporation.
41. —(1) Any contract or other transaction purporting to be entered into by a company prior to its
formation or by any person on behalf of a company prior to its formation may be ratified by the company
after its formation and thereupon the company shall become bound by and entitled to the benefit thereof
as if it had been in existence at the date of the contract or other transaction and had been a party thereto.
(2) Prior to ratification by the company the person or persons who purported to act in the name or on
behalf of the company shall in the absence of express agreement to the contrary be personally bound by
the contract or other transaction and entitled to the benefit thereof.
Form of contract.
(3) Contracts on behalf of a corporation may be made as follows:
(a) a contract which if made between private persons would by law be required to be in writing under seal
may be made on behalf of the corporation in writing under the common seal of the corporation;
(b) a contract which if made between private persons would by law be required to be in writing signed by
the parties to be charged therewith may be made on behalf of the corporation in writing signed by any
person acting under its authority, express or implied;
(c) a contract which if made between private persons would by law be valid although made by parol only
(and not reduced into writing) may be made by parol on behalf of the corporation by any person acting
under its authority, express or implied,
and any contract so made shall be effectual in law and shall bind the corporation and its successors and all
other parties thereto and may be varied or discharged in the manner in which it is authorised to be made.
U.K.ss.32-36.
Aust. s. 35 (1).
Authentication of documents.
(4) A document or proceeding requiring authentication by a corporation may be signed by an authorised
officer of the corporation and need not be under its common seal.
Aust.s.35(2).
Execution of deeds.
(5) A corporation may by writing under its common seal empower any person, either generally or in
respect of any specified matters, as its agent or attorney to execute deeds on its behalf and a deed signed
by such an agent or attorney on behalf of the corporation and under his seal, or, subject to subsection (7),
under the appropriate official seal of the corporation shall bind the corporation and have the same effect
as if it were under its common seal.
Aust.s.35(3).
(6) The authority of any such agent or attorney shall as between the corporation and any person dealing
with him continue during the period, if any, mentioned in the instrument conferring the authority, or if no
period is therein mentioned then until notice of the revocation or determination of his authority has been
given to the person dealing with him.
Aust. s. 35 (4).
Official seal for use abroad.
(7) A corporation whose objects require or comprise the transaction of business outside Singapore may, if
authorised by its articles, have for use in any place outside Singapore an official seal, which shall be a
facsimile of the common seal of the corporation with the addition on its face of the name of the place
where it is to be used and the person affixing any such official seal shall, in writing under his hand, certify
on the instrument to which it is affixed the date on which and the place at which it is affixed.
Aust.s.35(5).
Authority of agent of a corporation need not be under seal, unless seal required by law of foreign state.
(8) The fact that a power of attorney or document of authorisation given to or in favour of the donee of
the power or agent of a corporation is not under seal shall not, if such power of attorney or document of
authorisation is valid as a power of attorney or document of authorisation in accordance with the laws of
the country under which such corporation is incorporated, affect for any purpose intended to be effected
in Singapore the validity or effect of any instrument under seal executed on behalf of that corporation by
such donee of the power or agent, which shall for all such purposes whatsoever be as valid as if such
authority had been under seal.
13/87.
Retrospective application.
(9) Subsection (8) shall also apply to every instrument under seal executed before 15th May 1987 on
behalf of any corporation by a donee of a power or an agent of that corporation whose authority was not
under seal.
- well for him to remember that he must look for his remuneration to the promoters or such of them as
actually retained him until the company ratifies the contract of retainer after its formation

3.5 Unincorporated Bodies


- only persons who can be made liable are those who actually gave the retainer

3.6 Trustees and Executors


- are themselves personally liable to the solicitor but are entitled, on an implied contract of indemnity

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

SECTION 4 – CHALLENGING THE RETAINER

4.1 Presumption of Authority


- presumption that the solicitor who appears for a party in an action or in litigation has authority to do so
until his authority has been challenged

4.2 Challenging the Retainer


- Hawkins Hill Gold Mining Co. v. Briscoe & Others [1887] 8 LR (NSW) Eq 123:
• “the mere fact of acting generally as a solicitor for a client does not per se confer any right to
institute a suit on his behalf”
• “why should the defendants not be permitted to challenge the authority of the solicitor?”
- Tung Hui Mannequin Industries v Tenet Insurance Co Ltd [2005] 3 SLR 184:
• “Order 64 r 7(1) of the Rules of Court made it mandatory for every solicitor who was representing
any party in any cause or matter to obtain a warrant to act from that party
• burden of proving that a solicitor had been authorized to act lay on that solicitor or his client
• if it was challenged, he had to be prepared to disclose his warrant to act or any other document
establishing his authority
• counsel were entitled to request opposing counsel to produce their warrants to act
• the first and fourth defendants were entitled to know exactly who was taking action against them
• a reasonable basis on which to file their respective applications to strike out the action as against
them
• entitled to the costs of the applications which were necessitated by the plaintiff’s and Gn & Co’s
unreasonable refusal to produce any evidence of authority”
Tung Hui Mannequin Facts
The plaintiff, Tung Hui Mannequin Industries (“THMI”), was a partnership firm. Lu Hiu-Huang (“Lu”) and
Udom Kasemkrai (“Udom”), by the time of this action, were former partners of THMI. THMI had
commenced a suit (“Suit 1777”) against Team Wood Decoration & Construction Pte Ltd (“Team Wood”) in
which THMI was represented by M/s Gn & Company (“Gn & Co”), who were also its solicitors in the present
suit (“Suit 677”). The first and fourth defendants were involved in one way or another in Suit 1777. At the
conclusion of the trial in Suit 1777, Team Wood was ordered to pay THMI damages and costs.
Subsequently, Gn & Co wrote to the first and fourth defendants (“the letters”) stating that they acted for “Tung
Hui Mannequin” and that they had instructions to commence action on their clients’ behalf to enable their
clients to recover what was due and awarded to them in Suit 1777 which they had been deprived of due to
conspiracy by the first and fourth defendants. In the letters, GN & Co also asked for the name of the firm of
solicitors, if any, that was instructed to accept service on behalf of the respective defendants.
M/s Rajah & Tann (“R & T”) replied to Gn & Co and stated that they had instructions to accept service on
behalf of the fourth, and later the first, defendant. R & T asserted that an entity known as “Tung Hui
Mannequin” could not be found listed in the Registry of Companies and Businesses. R & T asked Gn & Co to
clarify the persons that they had represented when they issued the letters, and also to confirm that they had a
warrant to act for those persons in respect of the allegations made against the first and fourth defendants. The
fourth defendant later instructed M/s Shook Lin & Bok (“SLB”) to represent him.
Gn & Co did not reply to the letters issued by R & T. Instead, they caused the Writ of Summons in Suit 677 to
be issued and served. The Statement of Claim endorsed thereon contained the same allegations as those
contained in the letters
The first and fourth defendants then each filed an originating summons against Lu and Udom seeking pre-
action discovery of Gn & Co’s warrants to act, if any. A senior assistant registrar ordered Lu and Udom to give
discovery of the warrant to act or any other document which they had executed which expressly or impliedly
authorised Gn & Co to act as their agent to, inter alia, send the letters. Gn & Co appealed against the orders
for pre-action discovery and were granted a stay of execution pending the adjourned hearing of the appeals.
Subsequently, SLB and R & T wrote to Gn & Co on behalf of their clients to demand, pursuant to O 64 r 7 of
the Rules of Court (Cap 322, R 5, 2004 Rev Ed), that Gn & Co produce for inspection their warrant to act for
the plaintiff in Suit 677. When Gn & Co refused to comply with the request, the first and fourth defendants
each filed an application asking for Suit 677 to be struck out on the ground that Gn & Co did not have the
authority to bring the action in the name of the plaintiff and asking that the respective defendant’s costs of the
action, including the costs of the application, be paid personally by Gn & Co on an indemnity basis.
Before the hearing of the said applications, Lu and Udom made a joint affidavit stating that they were the
former partners of THMI, the plaintiff named in Suit 677, and had brought Suit 677 against the defendants in
the name of their former firm and partnership. They confirmed that they had instructed and authorised Gn &
Co to commence Suit 677 against the defendants. As the contents of the joint affidavit were precisely what
they were seeking, the first and fourth defendants informed the court that they would not be pursuing the
prayer to strike out the action. However, they asked for costs to be ordered in their favour. The assistant
registrar granted the defendants leave to withdraw the prayer in question from their respective applications and
awarded costs in favour of the first and fourth defendants. The plaintiff appealed against these orders.
The issues on appeal were: (a) whether a solicitor had a right to question another solicitor’s authority and to
demand to inspect that solicitor’s warrant to act; and (b) whether it was reasonable for the first and fourth
defendants to have filed their respective applications to strike out the plaintiff’s action against them.
Held, dismissing the appeals with costs:
(1) Order 64 r 7(1) of the Rules of Court made it mandatory for every solicitor who was representing any
party in any cause or matter to obtain a warrant to act from that party. Under O 64 r 7(2), the absence of such a
warrant to act was taken to be prima facie evidence of the lack of the solicitor’s authority to act. The fact that
it was a duty to obtain such a warrant, and that this duty had been legislated as part of the Rules of Court,
indicated that the warrant was not simply a matter between the solicitor and his own client. The warrant was to
serve as proof of the solicitor’s authority whenever such proof was needed and not only if the client himself
subsequently disputed it: at [40] and [41].
(2) It was clear from the authorities that the burden of proving that a solicitor had been authorised to act lay
on that solicitor or his client. This was because a solicitor in starting an action acted as an agent and, as such
agent, made his principal liable for various consequences including the possibility of a costs order against him.
An agent who took action that would bind his principal had to be the person who had the onus of showing that
his act was an authorised act. When the challenge to the solicitor’s authority was made by the opposing party
in the case rather than by the solicitor’s own client, then that client and the solicitor had the onus of
establishing the authority: at [42].
(3) Although a solicitor who filed a writ or other pleading on behalf of a client thereby represented that he
had the authority to act for that client, he had to be aware that, from time to time, his authority might be
challenged and, if it was challenged, he had to be prepared to disclose his warrant to act or any other document
establishing his authority: at [43].
(4) The existence of O 64 r 7 necessarily implied that counsel were entitled to request opposing counsel to
produce their warrants to act. In general, therefore, a lawyer who received a request to disclose his warrant to
act should do so as a matter of course. He should not suspect the motives of the lawyer who made the request
unless there were other circumstances that indicated an ulterior motive. However, even if there was some
ulterior motive, that was not a just excuse to withhold disclosure of the authority. If the warrant to act
contained privileged material, the solicitor should either expunge that material before disclosing the warrant or
obtain a further brief warrant that did not contain such material:
at [44] and [45].
(5) The letters sent by Gn & Co were not clear since the client’s name was stated wrongly and THMI’s
business had been terminated. The first and fourth defendants were entitled to know exactly who was taking
action against them and to question the authority of Gn & Co to act for a firm that had, apparently, ceased
business: at [46].
(6) The first and fourth defendants had a reasonable basis on which to file their respective applications to
strike out the action as against them. In light of Gn & Co’s 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 Gn & Co had not been authorised to act. They were entitled to the costs of the applications
which were necessitated by the plaintiff’s and Gn & Co’s unreasonable refusal to produce any evidence of
authority: at [48].
[Observation: Whilst the practice of law was an honourable profession and lawyers were, by and large
honourable persons, inasmuch as it was the duty of one lawyer to obtain authority before commencing action,
it was the duty of opposing counsel to defend his client’s interest by putting a stop to an unauthorised action at
as early a stage as possible if there appeared to be reason to suspect that the action was unauthorised.
Solicitors should therefore not react with umbrage when asked to produce their warrants to act and especially
when opposing counsel explained clearly the reason why there was a doubt regarding their authority: at [43].]

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

SECTION 5 – THE TERMS OF THE CONTRACT

5.1 Retainer Limited


- if a solicitor is retained to act for a client in a particular transaction, he may transact only that particular
matter
- likewise if his authority to act is limited by any special conditions then he is bound by those conditions:
Teh Eok Kee v. Tan Chiah Hock [1995] 3 MLJ 613
The Kok Kee - Facts:
The respondents, who were both brothers, were the registered proprietors of a piece of land in Seberang Perai
Selatan (`the land`). Prior to 18 April 1990, another brother of the respondents, Mr Tan Weng Hock (`Tan`),
who was given an option to sell the land by the respondents, approached Mr CP Ang (`Ang`) of Messrs CP
Ang & Co (`the firm`), to act as the respondents` solicitor in the sale and purchase transaction of the land.
However, Tan`s option to sell was only signed by the second respondent. Subsequently, the solicitors for the
purchasers (`the appellants`) sent a copy of the draft sale and purchase agreement of the land (`the agreement`)
to Ang, who then directed Tan to hand it to the respondents for their perusal. Ang testified that he was
informed by his clerk (who was not called as a witness) that one of the respondents had later instructed him to
obtain the fair copy of the agreement and 10% deposit from the appellants` solicitors (`the first part of Ang`s
testimony`). This was done by the firm in its letter dated 15 May 1990, and was admitted by the respondents.
After the firm had received the engrossed copy of the agreement and the deposit, the respondents called at
Ang`s office. According to Ang, he was informed by his clerk that when the respondents were asked to settle
the legal fees, they claimed that Tan, who was the option holder, would be the appropriate person to do so
(`the second part of Ang`s testimony`). They added that they would like to discuss the matter with Tan first
before signing the agreement. However, the respondents argued that they refused to sign the agreement
because they were not aware of the matter in question. On 18 June 1990, the respondents wrote to the firm to
discharge it from acting on their behalf. The firm was also requested to hand over the issue document of title
of the land that was in its custody to Messrs Goik Ah Kim & Co, who were the respondents` newly appointed
solicitors. It was not until 17 August 1990 that the respondents wrote to the firm to inform it that the legal fees
would not be settled as it was not authorized to act on their behalf. It was material to note that the respondents
had found a new purchaser for the land at a considerably higher price before the dispute in question arose.
Dissatisfied, the appellants brought a suit for specific performance of the agreement. The trial judge found in
favour of the respondents, on the ground that the firm was not authorized to conclude the agreement on their
behalf. The appellant appealed.The issues before the court were: (i) whether the respondents had authorized
the firm to conclude a contract of sale and purchase in favour of the appellants; and (ii) whether it could be
reasonably inferred from the evidence that the respondents had ratified the unauthorized bargain struck by the
firm.
Holdings:
Held, allowing the appeal:
(1).(per Edgar Joseph Jr FCJ ) It is a question of fact in each case, whether a solicitor has actual or
ostensible authority to bind his client contractually. His authority is limited by his instructions, which is also a
question of fact. The burden of proof of establishing such authority must rest on the party who alleged it.
(2).(per Edgar Joseph Jr FCJ ) A solicitor`s authority flows from the retainer given to him by his client. It
follows that his authority to act is limited by any special condition imposed, and supplemented by any special
authority conferred by the retainer. Generally, a solicitor has no general authority to bind his client
contractually as a vendor or purchaser of land, unless such authority is expressly conferred upon him or is
implicit in the terms of the retainer.
(3).(per Edgar Joseph Jr FCJ ) The trial judge had considered the first and second parts of Ang`s testimony
as hearsay, as Ang`s clerk who had made the statements therein was not called as a witness. However, having
regard to the admission of the events by the respondents, who were parties to the suit, the first part of Ang`s
testimony should have been admitted on the principle that if a party to a civil suit says he does not dispute the
truth of a fact, the opposite party will not be required to prove such fact. Further, the second part of Ang`s
testimony was admissible pursuant to s 14 of the Evidence Act 1950 (`the Act`), as the statement therein was
relevant to show Ang`s state of mind, ie that he had reason to believe that he was authorized to conclude the
agreement on behalf of the respondents .
(4).(per Edgar Joseph Jr FCJ ) On the evidence, the judge ought to have held that Tan, being the option
holder, had the authority of the respondents to authorize Ang to act for the respondents in the agreement. The
scope of Tan`s authority was spelt out in the option to sell, and although he was not called as a witness, the
statements attributed to him were the statements in the nature of admissions, implied if not express, of one
who was in privity with parties to the suit. It is clear law, that not only admissions made personally by the
party, but also admissions by those in privity with the party are admissible as exceptions to the hearsay rule.
Agents acting within the scope of their authority are those in privity, under s 18(1) of the Act.
(5).(per Edgar Joseph Jr FCJ ) Insofar as proof that Tan was the agent of both the respondents was
concerned, the case against the second respondent was stronger, because the option was only signed by the
second respondent, and not the first respondent. The law is also clear that out-of-court admissions by co-
parties in legal proceedings are not admissible against a joint party simply by virtue of their joinder as parties.
However, having regard to the evidence in this case, it could be inferred that Tan was the duly authorized
agent of both the respondents, and thus, his out-of-court statements were admissible against both the
respondents.
(6).(per Edgar Joseph Jr FCJ ) The judge had also omitted to take into account that the first respondent`s
testimony was tainted by a lie when evaluating the oral testimony of the first respondent.
(7).(per Edgar Joseph Jr FCJ ) The inaction and delay on the part of the respondents to challenge the
authority of the firm to bind them contractually was not merely inconsistent with the respondents` version of
the facts and consistent with the appellants` version, but was also relevant to show that even if Ang did not
have prior authority to bind the respondents contractually in the matter of the sale and purchase of the land,
there was an inference of ratification by acquiescence and adoption that could be drawn.
(8).(per Edgar Joseph Jr FCJ ) This case came within the range of cases where the trial judge had, in arriving
at his findings of fact, either failed to take into account or to give proper weight to the material circumstances
and probabilities of the case. Consequently, his judgment could not stand.
- there is no “general relationship” of solicitor and client of a standing and permanent character for all
occasions and for all purposes: Saffron Waldon Second Benefit Building Society v. Rayner [1880] 14
Ch D 406 at p. 415

- negotiations via solicitor’s correspondence were successfully shown to amount to evidence of a


contract, but, on appeal, the purchaser’s action failed as he could not prove that the vendor’s solicitor
had authority to conclude a contract: Yeo Gek Lang v. Alice Wee [1978] MLJ 196, [1979] 1 MLJ 213
Facts:
This was an appeal from the decision of DC D`Cotta J in the court below (see [1978-1979] SLR 230). The
property in question was No 95 Jalan Senang. The defendant/appellant offered to purchase it from the
respondent for $164,000 subject to contract. The appellant paid the 10% deposit to her own solicitors.
Negotiations as to the terms of the contract ensued between the parties` solicitors. The document of transfer
and restriction had been executed by the parties but the appellant refused to complete. The respondent
subsequently sold the property to another purchaser for $142,000 and sued the appellant for $22,000 and
interest as damages for breach of contract. The trial court allowed the respondent`s claim.
The court had to decide whether on the true construction of the letters passing between the respondent`
solicitors and the appellant`s solicitors there was a concluded contract between the parties for the sale of the
said property.
Holdings:
Heldallowing the appeal:
(1).The law was settled that solicitors were not, in the absence of specific authority, agents of their clients to
conclude a contract for them.
(2).There was no evidence in this case that the appellant had authorised her solicitors to negotiate and
conclude such a bargain for her.
(3).The respondent had therefore failed at the trial to prove that there was a binding agreement between her
and the appellant for the sale of the said property.

- 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.

- Tan Lian Hong v. Min Ngai Knitting [1974] 1 MLJ 76


Tan Lian Hong - Facts:
In this case the plaintiff had bought an action for damages for negligence against her employers, the first
defendant, and a fellow-worker, the second defendant. The allegation was that the injuries sustained by the
plaintiff were caused by the negligence of the second defendant. The second defendant had been dismissed
by the employer and could not be traced. Solicitors retained by the insurers of a Workman`s Compensation
policy entered appearance for the first defendant and also for the second defendant. The plaintiff objected to
the entry of appearance on behalf of the second defendant on the ground of want of authority.
Holdings:
Held: the plaintiff was entitled to challenge the authority of the solicitor who purported to act for the
second defendant and in the circumstances of this case the appearance of the second defendant must be set
aside.

- Formal written authority is especially desirable at the following stages:


a) Accepting the retainer;
b) Negotiating, settling and entering a consent order;
c) Making or accepting payments to or from other persons
- Where a solicitor purports, without authority, to make a contract, his client can subsequently ratify it:
Koenigsblatt v. Sweet [1923] 2 Ch 314
- Burden of proving such ratification lies on the party alleging it, and he must also prove full knowledge
of the facts: Morison v. London, County & Westminster Bank Ltd [1914] 3 KB 356 CA

5.2 Express Terms

5.3 Implied Terms

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

5.5 Completion of Retainer


- Picken v. The President etc. of the Shire of Alexander [1980] 16 VLR 309:
• Whether it was necessary for a solicitor to obtain fresh instructions and authority from his client to
apply fro leave to serve notice of motion for a new trial
• “… once final judgment has been obtained the solicitor’s authority ceases, and he must get express
authority for another step”
- Richardson v. Richardson [1909] VLR 448
- Re Joseph Wolfe [1932] VLR 465: a solicitor should obtain fresh instructions
SECTION 7 – THE AUTHORITY OF THE SOLICITOR
7.1 Scope of Authority
7.2 Unusual Expenses
- solicitor does not have authority to incur unusual expenses except with his client’s express instructions
7.3 Litigation
- wide range of authority:
a) may accept service on behalf of his client of all documents which are not required to be served
personally
b) make formal written admissions
c) bind his client by a compromise
d) defer the action
e) receive payment or tender of a debt
f) generally act as the client’s authorized agent
7.4 Non-Litigious Matters
- authority is generally limited to the express authority given to him by his client
- an agent authorized to receive money on behalf of his principal must receive it in cash
1) a purchaser’s solicitor when making payment should as a matter of prudence do so only against the
production of a separate signed authorization from the vendor stating that his solicitor has authority to
accept the proceeds of sale
2) authorization to make payment to the vendor’s solicitors could be incorporated in the contract, but in
that event it would be the duty of the vendor’s solicitor to draw the relevant clause to his client’s
attention prior to the vendor executing the contract
3) solicitor may deem it prudent to insist on making payment directly in the name of the vendor
7.5 Receipt of Moneys
- when a vendor’s solicitor receives as such a deposit upon a purchase, he does not hold it as stakeholder,
but as agent for the vendor, and must pay it on demand: Edgell v. Day [1865] LR 1 Cp 80
- nor, if the contract foes off, can the purchaser sue the solicitor for the deposit
- a solicitor who acts for a mortgage and who is authorized by the mortgage to receive interest on the
mortgagee’s behalf is not thereby authorized to receive payment of the principal
- he therefore receives it as agent of the mortgagor: Bonham v. Maycock [1928] 138 LT 736
- a mortgagee’s solicitor, however, has implied authority to perfect the arrangement sanctioned by the
mortgagee, and to modify it in non-essential particulars, but not so far as to impose onerous covenants
- Martin v. Diamantikos [1964] VR 593:
• Plaintiff, though a firm of solicitors, agreed to lend to the defendants a sum
• Approximately 5 months later the defendants repaid the principal monies and interest to the
solicitor who had provided the money on the plaintiff’s behalf
• No discharge of mortgage or receipt was given by the solicitor and the plaintiff was not aware that
the monies had been repaid
• The monies received by the solicitor were then paid to another person
• In an action by the plaintiff against the defendants for money lent, it was held that a person who
acts as solicitor for a mortgagee in preparing mortgage documents and who holds the security and
receives the interest payment on the mortgagee’s behalf is not thereby authorized to receive the
principal monies without the mortgagee’s authority
• Furthermore, it was held that there was no authority given to the solicitor to receive the principal as
agent for the plaintiff, and accordingly, the payment to the solicitor was not a repayment of the
principal monies due under the mortgage
- Bell v. Rowe [1900] 26 VLR 511: “if the mortgagor hands money to anybody else than the person
authorized, he must be responsible for the loss of the money if the money if lost
7.6 Notices
- a solicitor does not have authority to receive notices on his client’s behalf unless he has a special
authority to do so
7.7 Consequences of Lack of Authority
1) if a solicitor commences proceedings on behalf of a client
2) without having authority to do so, the proceedings will be struck out and the solicitor will be directed to
pay the plaintiff’s costs and
3) also all costs which the plaintiff may have been ordered to pay to the defendant and the defendant’s
additional costs
4) the solicitor may be attached or committed for taking proceedings in the name of the person without
authority, and where there is fraud, his name may be struck off the roll

(b) Inadequate Professional Services

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.

Rule 12: Diligence and Competence


• Diligence:
 Make every effort to provide legal services without undue delay
 Would be breached by evidence of gross neglect to advance his client’s interest in a particular manner
 New matters/cases while struggling to cope with existing workloads and thereby unduly delaying the
resolution of matters would therefore be a breach of this Rule
 Diligence as well as candour with the clients
• Competence:
 Competence is an ethical consideration separate from an advocate and solicitor’s duty of care for the
purpose of determining negligence
 Should either decline to act or obtain the client’s instructions to retain, consult or collaborate with another
advocate who is competent in that field
 Matrix-Securities Ltd v Theodore Goddard (a firm) and another: the duty of solicitors and counsel
practicing in a specialized field is to exercise such skill and care as would be exercised by a reasonably
competent practitioner in the relevant sectors of those professions. It is likely that the local courts would
adopt a similar posture (see rule 16)

Rule 13: Improper Costs


• Arises from his fiduciary relationship with his client

Rule 14: Complete work in Reasonable Time


• Client must be informed immediately

Rule 15: Inadequate Time


• Consider his other professional commitments
Improper costs
13. An advocate and solicitor shall not undertake work in such a manner as to unnecessarily or
improperly escalate his costs that are payable to him.
Complete work in reasonable time
14. —(1) An advocate and solicitor shall at all times use his best endeavours to complete any work on
behalf of a client as soon as is reasonably possible.
(2) If it becomes apparent to the advocate and solicitor that he cannot do the work within a reasonable
time, he should so inform the client.
Inadequate time
15. An advocate and solicitor shall not accept instructions if, having regard to his other professional
commitments, he will not be able to discharge or carry out such instructions diligently and
expeditiously.

Rule 16: Competence


• If does not possess sufficient skill, knowledge or experience, may accept a retainer:
a) When without undue delay and further costs, the advocate and solicitor is able to establish competence in
a field; or
b) If the client consents to his advocate and solicitor acquiring the requisite knowledge or skill despite the
likely delay and costs

Rule 17: Keeping client informed


- Copying and forwarding important correspondence sent or received on the client’s matter would be part of the
advocate and solicitor’s duty to keep his client informed
- Via telephone, correspondence protects an advocate and solicitor
- Complimentary slip with a typewritten/handwritten comment could be utilized
- Should also explain to the client in a cover letter in appropriate language so that the client is aware of the
significance of the development and appropriate advice can be given or instructions sought
- Level of information given will of course depend on the needs of the client
- In a “Practice Pitfalls” column, Singapore Law Gazette (Jan 1999 Edition), Law Society revealed that letters
received by the Law Society show that “misunderstanding and problems in the solicitor/client relationship
commonly occur due to the failure of a lawyer and his client to communicate”

Rule 20: Responding to Clients


Responding to clients
20. An advocate and solicitor shall where possible —
(a) promptly respond to the client’s telephone calls; and
(b) keep appointments made with the client,
unless there are good and sufficient reasons why this cannot be done.

Rule 21: Explanation to Clients


Explanation to client
21. —(1) An advocate and solicitor shall explain in a clear manner, proposals of settlement, other offers or
positions taken by other parties which affect the client.
(2) Where the client is not English speaking, the advocate and solicitor shall ensure that any offers or proposals
of settlement are explained to the client in the language or dialect that he understands.

Rule 31: Conflict of Interest


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) —
(a) the term “client” includes a client of the law firm or law corporation of which the advocate and solicitor
is a partner, an associate or an employee whether or not he handles the client’s work; and
(b) Deleted by S 410/2001, wef 01/09/2001.
(3) Paragraph (1) shall apply even where the advocate and solicitor concerned becomes a member of a
different law firm or law corporation.
(4) Nothing herein shall preclude a law firm or law corporation from acting against a party in a matter
provided that —
(a) the law firm 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 firm 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 firm or law corporation.

- 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

Rule 35: Fees


a) To inform the client of the basis on which professional services will be charged
b) To specify for the client the other foreseeable payments

Information on fees to client


- rule 35 – duties on info on fees to client - sub rules tt lawyer must have regard to when deermining whether
fulfilled proff duty to inform client abt fees

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:

Agreement as to costs for contentious business


111. —(1) Subject to the provisions of any other written law, a solicitor or a law corporation may make an
agreement in writing with any client respecting the amount and manner of payment for the whole or any
part of its costs in respect of contentious business done or to be done by the solicitor or the law
corporation, either by a gross sum or otherwise, and at either the same rate as or a greater or a lesser rate
than that at which he or the law corporation would otherwise be entitled to be remunerated.
(2) Every such agreement shall be signed by the client and shall be subject to the provisions and
conditions contained in this Part.
Effect of agreements with respect to contentious business
112. —(1) Such an agreement as is mentioned in section 111 shall not affect the amount of, or any rights or
remedies for the recovery of, any costs recoverable from the client by, or payable to the client by, any other
person, and that person may, unless he has otherwise agreed, require any costs payable or recoverable by him to
or from the client to be taxed according to the rules for the time being in force for the taxation of those costs.
(2) Notwithstanding subsection (1), the client shall not be entitled to recover from any other person, under any
order for the payment of any costs which are the subject of the agreement, more than the amount payable by the
client to his own solicitor or law corporation under the agreement.
(3) Such an agreement shall be deemed to exclude any further claim of the solicitor or law corporation beyond
the terms of agreement in respect of any services, fees, charges or disbursements in relation to the conduct and
completion of the business in reference to which the agreement is made, except such services, fees, charges or
disbursements (if any) as are expressly excepted by the agreement.
(4) Subject to the provisions of this Part, the costs of a solicitor or law corporation, in any case where there is
such an agreement as is referred to in section 111, shall not be subject to taxation nor to the provisions of section
118.
(5) A provision in any such agreement that the solicitor or law corporation shall not be liable for
negligence, or that he or the law corporation shall be relieved from any responsibility to which he or the
law corporation would otherwise be subject as a solicitor or a law corporation, shall be wholly void.
Enforcement of agreements
113. —(1) No action or suit shall be brought or instituted upon any such agreement as is referred to in section
111.
(2) Every question respecting the validity or effect of the agreement may be examined and determined, and the
agreement may be enforced or set aside without suit or action on the application by originating summons of any
person or the representatives of any person, party to the agreement, or being or alleged to be liable to pay, or
being or claiming to be entitled to be paid the costs, fees, charges or disbursements in respect of which the
agreement is made, by the court in which the business or any part thereof was done or a Judge thereof, or, if the
business was not done in any court, then by the High Court or a Judge thereof.
(3) Upon any such application, if it appears to the court or Judge that the agreement is in all respects fair and
reasonable between the parties, it may be enforced by the court or Judge by rule or order, in such manner and
subject to such conditions (if any) as to the costs of the summons, motion or petition as the court or Judge thinks
fit.
(4) If the terms of the agreement are deemed by the court or Judge to be unfair or unreasonable, the agreement
may be declared void.
(5) The court or Judge may thereupon order the agreement to be given up to be cancelled, and may direct the
costs, fees, charges and disbursements incurred or chargeable in respect of the matters included therein to be
taxed, in the same manner and according to the same rules as if the agreement had not been made.
(6) The court or Judge may also make such order as to the costs of and relating to the application and the
proceedings thereon as the court or Judge thinks fit.
(7) When the amount agreed for under any such agreement has been paid by or on behalf of the client or by any
person chargeable with or entitled to pay it, any court or Judge having jurisdiction to examine and enforce the
agreement may, on application by the person who has paid the amount within 12 months after payment, if it
appears to the court or Judge that the special circumstances of the case require the agreement to be reopened,
reopen it, and order the costs, fees, charges and disbursements to be taxed, and the whole or any portion of the
amount received by the solicitor or law corporation to be repaid by him, on such terms and conditions as to the
court or Judge seems just.
(8) Where any such agreement is made by the client in the capacity of guardian or of trustee under a deed or
will, or of committee of any person or persons whose estate or property will be chargeable with the amount
payable under the agreement or with any part of that amount, the agreement shall before payment be laid before
the Registrar, who shall examine it and disallow any part thereof, or may require the direction of the court or a
Judge to be taken thereon.
(9) If in any such case the client pays the whole or any part of the amount payable under the agreement without
the previous allowance of the Registrar or court or Judge as aforesaid, he shall be liable at any time to account to
the person whose estate or property is charged with the amount paid, or with any part thereof, for the amount so
charged.
(10) The solicitor or law corporation who accepts the payment may be ordered by any court which would have
had jurisdiction to enforce the agreement, if it thinks fit, to refund the amount received by him or the law
corporation.

- 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

Fees in contentious matters


36. An advocate and solicitor shall, at the outset of a contentious matter and at appropriate stages thereafter,
explain to the client the following:
(a) that in any event the client shall be personally responsible for payment of his own solicitor and client
bill of costs in full regardless of any order for costs made against the opponent;
(b) that in the event the client loses, he will have to pay his opponent’s costs as well as his own; and
(c) that even if the client wins, his opponent may not be ordered to pay the full amount of the client’s own
costs and may not be capable of paying what has been ordered.

Rule 40: Evaluation


- An advocate and solicitor is required in appropriate cases to discuss with his client the risks or expenses of
proceeding with a matter and whether the expenses and risks involved justify the act
- Always act in the best interest of his client  fiduciary relationship
- A breach of Rule 40 may result in the finding of inadequate professional services if such a complaint is made
to the Council of the Law Society
- Advising a client to pursue claim, which is theoretically within the jurisdiction limit of the Sub Courts, in the
Small Claims Tribunal instead

Rule 41: Termination of Retainer


- Discharged advocate and solicitor must, upon receiving the incoming solicitor’s undertaking to protect his lien
upon the documents, release all documents and provide any assistance as is necessary to enable the incoming
advocate and solicitor to take over the matter
- Imposition of additional/alternative conditions for such release including the payment of outstanding costs and
disbursements, is no longer acceptable
- Rule recognizes the paramount interest of the administration of justice as overriding any other interest: Rule
2(a) of the General Ethical Statement

Rule 43: Fees chargeable in conflict situation


43. Where through conflict of interest, an advocate and solicitor has recommended to a client that the client seek
alternative legal representation, the advocate and solicitor may charge only for those items which clearly need not
be duplicated by the alternative advocate and solicitor.

- clarify the rule


- last 2 sentences of the rule should be deleted for clarity
- Rule 43 states that when a solicitor withdraws from acting in view of a conflict of interest, the fee
chargeable by him may only be for those items that would not be duplicated by the new solicitor

Rule 52: Responsibility for Fees


- professional duty of an advocate and solicitor to meet the fees of professional agents when there is no
agreement with the agent that he look to the client of the lawyer for payment of his fees
- major change
- Law Society should not continue to hold its members professionally liable for the fees of professional
agents they engage on their clients’ behalf when there is no reciprocal professional obligation imposed by
other professional bodies
- Amended rule only requires an advocate and solicitor to be professionally responsible but only in
jurisdictions where there are reciprocal obligations
- Nothing in this rule affects the advocate and solicitor’s contractual liability to such agents or third parties
- Always a good rule of practice to inform professional agents that their fees will be met by the client
directly or, alternatively, to take sufficient monies to account to pay for the professional agent’s fees

Rule 53A: Relations with Third Parties


Responsibility for fees
52. —(1) Except where otherwise agreed, an advocate and solicitor, a law firm or a law corporation, as the
case may be, who instructs another advocate and solicitor, law firm or law corporation shall be responsible
for the payment of the latter's fees.
(2) This rule shall also apply where the advocate and solicitor, law firm or law corporation instructs a
lawyer in such other jurisdiction which recognises a reciprocal responsibility for the payment of the fees of
an advocate and solicitor, a law firm or a law corporation.
Relations with third parties
53A. An advocate and solicitor shall not take unfair advantage of any person or act towards anyone in a
way which is fraudulent, deceitful or otherwise contrary to his position as advocate and solicitor or officer
of the Court.
2) Complaints Procedure for Inadequate Professional Services
The Legal Profession (Inadequate Professional Services Complaint Inquiry) Rules provide the procedure for
investigation
- The client’s written writing complaint to the Council.
- The matter proceeds to mediation.
- On the failure of mediation, the Investigative Tribunal will proceed with an inquiry.
- The report of the Investigative Tribunal will be considered by the Council.

- The Council may make orders such as:


 Limit his solicitor’s fees
 Rectify the error or omission
 Direct the lawyer to pay compensation to the client
 Take any other action that the Council may specify

(c) Duty to Act in the Client’s Best Interest vs. Duty to Court

 Common law principles still applicable in Singapore


 4 Aspects –
i. Loyalty to the person who is the client
ii. Relationship of honesty & fairness with client
iii. Act in client’s best interest
iv. Confidentiality of relationship (since amounts to relationship of trust)
a. NB: Lawyers enjoy privilege of solicitor-client communication
b. See section 128 Evidence Act (though, privilege embodied in the Evidence Act is separate
from the ethical duty

 Duty to the clients – the fiduciary relationship => Fiduciary obligations


1) Relationship between solicitor and client is a fiduciary one: 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
2) In all his dealings with his client, solicitor must act with strict fairness and candour and must exercise
utmost good faith
3) Relationship is on which imposes on the solicitor special obligations: Nocton v Ashburton [1914] AC 932;
Brown v Inland Revenue Commissioners [1964] 3 All ER 119
4) Solicitor is bound to
i. Give his client disinterested advice
ii. Make full and honest disclosure of al facts within his knowledge, including any personal
interest in the transaction of a client
5) Higher degree of obligation than any other agent’s obligation  officer of the court and privileges which the
law allows to legal professional confidences: Hemmens v Wilson Browne (A Firm) [1993] 4 All ER 826

 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.

 Client can start civil action against law for –


(a) Professional negligence; or
(b) Breach of fiduciary relationship
 Example: If gross delay or negligence (lack of care) in dealing with case, liable to be charged for
professional misconduct and breach of fiduciary relationship with client
- And, upon proof, can recover damages
Doreen Ng
In addition to making a complaint to the Law Society, sued solicitor for breach of fiduciary relationship
 However,
- Rule 42: must not terminate retainer except for a good reason and with notice (Rule 42(2)(a)-(f) – reasons)
- In litigation matter, require leave of court to terminate
- Thus, require application to court for a discharge from matter
(a) Criminal: oral
(b) Civil: summons in chambers + affidavit
- Reasons in writing precludes breach of fiduciary duty in future

Rule 54 Legal Profession (Professional Conduct) Rules


- A lawyer must act in a manner most advantageous to the client
- So long as it does not conflict with the interest of justice, public interest and professional ethics.
- In case of clash, which ought to prevail?

- 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

o Law Society of Singapore v Narayanan [1974] 2 MLJ 146


 Lawyer was chairman of the purchaser company whie holding practicing cert.
 The vendor was willing to sell the land at a cheaper price than what the lawyer had told the MD
of the purchaser company.
 Vendor agreed that part of the price difference would go to the lawyer personally.
 Lawyer did not disclose these facts to the board of directors of the purchaser company.
 He was charged under s.84(2)(a) Legal Profession Act and struck off the roll, even though he
was not acting as lawyers for either party in the Sale & Purchase Agreement.
 Narayanan acted dishonestly in relation to the transactions in question. The criminal offences of
which he had been convicted implied a defect of character which made him unfit for the
profession.

ii. Rule against personal and sexual relationship with a client

Law Society of Singapore v Singham Dennis Mahendran [2001] 1 SLR 566


- Lawyer had sexual relations with his client during the course of her divorce proceedings and stated he was
going to marry the client
 not good enough an excuse
 while she was gong through proceedgs, not proper to cross the line while she was vulnerable
o H laid a complaint that lawyer was having sexual relationship with the W, so that she did not consider
reconciliation
o Also said that the lawyer had sexual relationships with other clients
o Went up to the CA before 3 judges… Law Society proceeded on the basis that a lawyer is in fiduciary
relationship with the client, and cannot take advantage of her when she was undergoing a divorce
o No evidence of Undue Influence
o Went on principle so unfairness, and the court upheld it
- Charged for grossly improper conduct in the discharge of his professional duties under s.83(2)(b) Legal
Profession Act, and suspended for 3 years
- Abuse of a position of trust to take advantage of his client
- Primary considerations in sentencing
 Protection of the public
 Interest and reputation of the legal profession
o ratio decidendi is specific – client in divorce proceeding wsas in vulnerable state. Respondents and
petitioners usually in unstable state of mind – hurt and allegations involved. Lady will be vulnerable esp
where husb not faithful etc. so beholds the laywer not to cross the line.
o Case confined to its facts – not propositioning that lawyer can never sleep with his client – up to you to
advocate.

• ==> 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

(d) Duty of Confidentiality


- Fundamental to the relationship of solicitor and client
- Obligation exists in law (s.128 Evidence Act) and contract (in the retainer)
- It also stems from the lawyers’ fiduciary duties to his client, to guard information that the client has
provided him with
- duty of confidence continues forever… if the client passes away, then the duty of confidentiality passes to
successors in title (i.e. executors)
- the only person who can give consent to waive or breach the duty of confidentiality is the executor
- similarly, have to tell the staff that if they move on to another firm, they are still bound not to disclose

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

• NOTE: Confidentiality is different from solicitor-client privilege in that


• All information given by the client is confidential
• While the laws of Evidence decides whether such information is privileged (separate issue)

General Rule – Rule 24 (1)


Rule 24(1)
An advocate and solicitor shall not in any way, directly or indirectly —
(a) disclose any confidential information which the advocate and solicitor receives as a result of the retainer;
or
(b) disclose the contents of the papers recording such instructions,
unless with the consent of the client or is required by law or order of court.

- 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)

Privileged information - s. 128 EA


Professional communications
128. —(1) No advocate or solicitor shall at any time be permitted, unless with his client’s express
consent, to disclose any communication made to him in the course and for the purpose of his employment
as such advocate or solicitor by or on behalf of his client, or to state the contents or condition of any
document with which he has become acquainted in the course and for the purpose of his professional
employment, or to disclose any advice given by him to his client in the course and for the purpose of such
employment.
(2) Nothing in this section shall protect from disclosure —
(a) any such communication made in furtherance of any illegal purpose;
(b) any fact observed by any advocate or solicitor in the course of his employment as such showing that
any crime or fraud has been committed since the commencement of his employment.
(3) It is immaterial whether the attention of such advocate or solicitor was or was not directed to such fact
by or on behalf of his client.
- (subject to privilege) privilege is that of the client and not of the solicitor
- this means that the client can waive that privilege at any time
- (types) all direct oral and written communications between a solicitor and his client are privileged
- communications must be in the course of the solicitor-client relationship
- documents or information are communicated to you by the client, that communication is privileged
- information obtained by you independently of your client while collecting evidence for a case is also
privileged
- information received indirectly from the wife or the father of the client can also be privileged
- (duration) privilege lasts forever unless it is waived by the client
- Derby and Co Ltd and others v Weldon and others, 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 realized
that a mistake had occurred but sought to take advantage of the inadvertent disclosure, the court
had power under its equitable jurisdiction 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
• The court was not required to exercise its discretion by balancing conflicting public policy
considerations but would instead act to preserve an absolute privilege and would only waive the
privilege on general principles affecting the grant of a discretionary remedy
- Extends to copies made by the solicitor of the client’s pre-existing documents which are not in
themselves privileged, since the selection of 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] All ER 658
- Finers (a firm) and others v Miro [1991] 1 All ER 182:
• Solicitor had strong evidence of suspected fraud on the part of the client
• Apply to the court either under its inherent jurisdiction or under RSC Order 85 (Order 80 in the
Singapore Rules of Court) for directions as to how to deal with the client’s assets under his control
notwithstanding the inevitable breach of the solicitor’s duty of confidence to his client
ORDER 80
ADMINISTRATION AND SIMILAR ACTIONS
Interpretation (O. 80, r. 1)
1. In this Order, “administration action” means an action for the administration under the direction of
the Court of the estate of a deceased person or for the execution under the direction of the Court of a
trust and “personal representatives” includes executors, administrators and trustees.
Determination of questions, etc., without administration (O. 80, r. 2)
2. —(1) An action may be brought for the determination of any question or for any relief which
could be determined or granted, as the case may be, in an administration action and a claim need not
be made in the action for the administration or execution under the direction of the Court of the
estate or trust in connection with which the question arises or the relief is sought.
(2) Without prejudice to the generality of paragraph (1), an action may be brought for the
determination of any of the following questions:
(a) any question arising in the administration of the estate of a deceased person or in the execution of
a trust;
(b) any question as to the composition of any class of persons having a claim against the estate of a
deceased person or a beneficial interest in the estate of such a person or in any property subject to a
trust;
(c) any question as to the rights or interests of a person claiming to be a creditor of the estate of a
deceased person or to be entitled under a will or on the intestacy of a deceased person or to be
beneficially entitled under a trust.
(3) Without prejudice to the generality of paragraph (1), an action may be brought for any of the
following reliefs:
(a) an order requiring a personal representative to furnish and, if necessary, verify accounts;
(b) an order requiring the payment into Court of money held by a person in his capacity as personal
representative;
(c) an order directing a person to do or abstain from doing a particular act in his capacity as personal
representative;
(d) an order approving any sale, purchase, compromise or other transaction by a person in his
capacity as personal representative;
(e) an order directing any act to be done in the administration of the estate of a deceased person or in
the execution of a trust which the Court could order to be done if the estate or trust were being
administered or executed, as the case may be, under the direction of the Court.
Parties (O. 80, r. 3)
3. —(1) All the personal representatives to which an administration or such an action as is referred to
in Rule 2 relates must be parties to the action, and where the action is brought by personal
representatives, any of them who does not consent to being joined as a plaintiff must be made a
defendant.
(2) Notwithstanding anything in Order 15, Rule 4 (2), and without prejudice to the powers of the
Court under that Order, all the persons having a beneficial interest in or claim against the estate or
having a beneficial interest under the trust, as the case may be, to which such an action as is
mentioned in paragraph (1) relates need not be parties to the action; but the plaintiff may make such
of those persons, whether all or any one or more of them, parties as, having regard to the nature of
the relief or remedy claimed in the action, he thinks fit.
(3) Where, in proceedings under a judgment or order given or made in an action for the
administration under the direction of the Court of the estate of a deceased person, a claim in respect
of a debt or other liability is made against the estate by a person not a party to the action, no party
other than the executors or administrators of the estate shall be entitled to appear in any proceedings
relating to that claim without the leave of the Court, and the Court may direct or allow any other
party to appear either in addition to, or in substitution for, the executors or administrators on such
terms as to costs or otherwise as it thinks fit.
Grant of relief in action begun by originating summons (O. 80, r. 4)
4. In an administration action or such an action as is referred to in Rule 2, the Court may make any
certificate or order and grant any relief to which the plaintiff may be entitled by reason of any breach
of trust, wilful default or other misconduct of the defendant notwithstanding that the action was
begun by originating summons, but the foregoing provision is without prejudice to the power of the
Court to make an order under Order 28, Rule 8, in relation to the action.
Judgments and orders in administration actions (O. 80, r. 5)
5. —(1) A judgment or order for the administration or execution under the direction of the Court of
an estate or trust need not be given or made unless in the opinion of the Court the questions at issue
- Global Funds Management (NSW) Ltd v Rooney [1994] NSWLR 122: held that if a person bona fide
believes on reasonable grounds that a lawyer was his or her solicitor, although in reality that was not so,
that person may nevertheless claim legal professional privilege over communications relating to
the lawyer up to the time when that belief is exploded
- Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd 37 NSWLR 405:
• Where one company obtains legal advice and discloses it to two others with a view to a
commercial arrangement among them, but each has its individual interest in the advice given, the
advice will not attract common interest privilege because there is insufficient identity of interest
• In common interest privilege, fairness may well require that if one holder of the privilege, in
prosecuting the common interest for the benefit of all, waives legal professional privilege, there is
a consequential waiver on the part of the other holders
- Farrow Mortgage Services Pty Ltd (In Lig) v Webb & Others 39 NSWLR 601: legal professional
privilege rests not simply upon the confidence reposed by the client in the legal adviser but the
necessity, in the interests of justice, of carrying it out

2 or more persons may join in communicating with a legal adviser


- privilege belongs to all the persons who joined in seeking the service or obtaining the advice  joint
privilege
- no privilege attaches to such communications as against others who, with the client, share an interest in
the subject matter of communication
- but parties together are entitled to maintain the privilege “against the rest of the world”
- all to whom it belongs must concur in waiving it

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”?

11.1 Common Interest Privilege


- parties have a shared or similar interest in the subject of communications between one of them and a
legal adviser
- one or more of the parties disclose the contents of the communications with the legal adviser to others
with a shared or similar interest in the matter, need not result in a waiver of privilege by the party
making it
- where legal advice obtained by a company, privilege not lost when the advice is disclosed to its
directors
- this is not because of their common interest
- rather, it is because the company can only manifest its acts and intentions by the actions and
declarations of human beings
- directors’ knowledge of the decision to obtain contents of that advice cannot be treated as disclosure to
a party separate from the company itself
- involves no waiver
- a mere common interest in the outcome of litigation will be sufficient to enable any party with that
interest to rely upon it
- however, 2 persons will not have a common interest privilege if their individual interests are selfish and
potentially adverse to each other, because there does not exist the necessary identity of interests
- Foo Ko Hing v Foo Chee Heng [2002] 2 SLR 361:
• Held that both the plaintiff and defendant were former clients of the previous solicitor in respect of
the same transaction while s. 128 EA prohibits the previous solicitor from disclosing any
communication made by one or both of them in his course of his employment to anyone not within
the solicitor-client relationship without their express consent, it does not prohibit the disclosure of
any communication to either of them
• Highly artificial, and indeed an impossible task, for the solicitor to have to distinguish between the
communication with client A and with client B in respect of the same matter

Common queries on confidentiality


i. Joint retainer
Eg. Option/ contract for sale
- Must get consent of both buyer & seller before disclosure
- Depends on whether advise pertains to both parties or one of them
- Thus, dependent on whose interest protecting

- 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

ii. Amalgamation of law firms


Common law rule –
- Client deemed impliedly to consent to pass confidentiality to new amalgamated retainer
- Encompasses the right to solicitor-client privileged documents
- In practice, most firms explain the situation to client – esp. about professional conflict of interest –
when bringing in joint pool of clients together

*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!

iii) Acting against former client


- There is no absolute bar against a solicitor or a firm acting against a former client.
- The question is whether he is likely to make use of confidential information given to him by his former
client against that client.
 Concept of confid info that ur client gave you
- Even though a solicitor's retainer has been determined, he continues to owe the former client a duty to
protect confidential information.
 Eg if in course of advice you have found out abt former’s client asset position, may not be able to
act for second cient where he wants to know about foemr clkient’s assets.
 Cannot act therefore because have possession of confid info
- To ensure that the duty of confidentiality is not breached, an injunction may be sought against the solicitor
or the firm concerned.
- Alrich Development Pte Ltd v Rafiq Jumabhoy (No 2)[1994] 3 SLR 1
 Test of whether an injunction will be granted against a solicitor arising from a conflict of interest
is based on the test of “reasonable anticipation of mischief” or in other words “reasonable
likelihood of mischief” of using the confidential information against the former client learned in
the course of acting for former client.
 One should look at the real situation in its totality and not just the form.
- Bolkiah v KPMG (a firm) [1999] 2 WLR 215
 Impt case!!!!!
 This decision by the House of Lords, in December 1998, has adopted a stricter approach and
held that in determining whether the court should grant an injunction, a two stage test would be
adopted.
 Test even though acctg firm but test applies to lawyers as well
 Stage 1
- A plaintiff who seeks to restrain his former solicitor from acting in a matter for another
client has to establish:
o (i) that the solicitor is in possession of information which is confidential to him
and to the disclosure of which he has not consented; and
o (ii) that the information is or may be relevant to the new matter in which the
interest of the other client is or may be adverse to his own.
 Stage 2
- It is for the solicitor to establish that even if he does continue to act, there is no real risk
that the information will be disclosed. Such a risk need not be substantial.
- The House of Lords noted that: “... a fiduciary may not put his own interest or those of
another client before those of his principal. In my view no solicitor should, without the
consent of his former client, accept instructions unless, viewed objectively, his doing so
will not increase the risk that information which is confidential to the former client may
come into the possession of a party with an adverse interest.”
- Qn for court to determine

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

• exceptions very rare


• The lawyer must be prepared to show powerful justification for breaching the client’s confidentiality
- when answering PR paper, you have to tell the examiner that Rule 24 does not apply if s128 makes you duty
bound to reveal a certain piece of information

- 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

Legal Profession (Amendment) Act 2000:


• Part VIA relating to “Law Corporations” and Part IXA relating to “Foreign Law Firms, Joint Law
Ventures and Formal Law Alliances”

• Part VIA: Law Corporations


 Solicitor-client privilege exists between a law corporation and its client in the same way as it
exists between a solicitor and his client: s. 81E
Relationship between client and law corporation
81E. —(1) A law corporation shall have the same rights and shall be subject to the same
fiduciary, confidential and ethical requirements with respect to each client of the law
corporation that exist at law with respect to a solicitor and his client.
[4/2000]
(2) Solicitor-client privilege exists between a law corporation and a client of the corporation in
the same way as it exists between a solicitor and his client and extends to every solicitor who is
an officer or employee of the corporation.
[4/2000]
(3) Sections 128 to 131 of the Evidence Act (Cap. 97) on professional communications shall
apply to a law corporation, its officers and its employees as it applies to a solicitor.

(e) Duty of lawyers in the face of Client’s Perjury

Rule 57 Legal Profession (Professional Conduct) Rules


- When the lawyer knows his client is committing perjury or fraud he
o may apply for a discharge,
o if required to continue, he must not conduct the case to perpetuate this perjury of fraud ie make
disclosure tt the client has committed perjury. Can cont to act but draw the ilne as to what you can
and cannot submit on.
- real life application may be tricky
- This stems from the rule that a lawyer is not to act for any illegal purpose
- The lawyer must advise his client that deception of the court is a very serious matter, and dissuade him
from doing so

Disclosure of the fact that client committed perjury


- Two divergent views in Vernon v Bosley (No. 2) [1997] 1 All ER 614
 Facts:
 Respondent received award for nervous shock after witnessing death of his 2 daughters in road
traffic accident.
 Appeal against quantum.
 If the lawyer withdraws, he should not disclose the reasons to the opposite party – duty of confid
and duty of fiduciary
 He should disclose to the opposite party, and to the judge unless there is an agreement to the
contrary – perjury is illegal and no duty to protect privilege
- jimmy yim – out of prudence, don’t volunterr the info that client has committed privilege.
(f) Rules Against Borrowing

Rule 33 Legal Profession (Professional Conduct) Rules – Prohibited Borrowing Transaction

The following cannot borrow money from a lawyer’s clients:


- A lawyer,
- His family members,
- Members of his firm, and
- Entities in which he has a beneficial interest

- This duty should also extend to circumstances where he knows of such situations and has the power to
prevent it

33. Subject to rule 34, an advocate and solicitor shall not —


(a) enter into a prohibited borrowing transaction;
(b) instruct, procure, secure or arrange for an associated party to enter into a prohibited borrowing transaction;
or
(c) knowingly allow an associated party to enter into a prohibited borrowing transaction if it is within his power
to prevent it.

- Definitions are found in rule 32


"prohibited borrowing transaction" means 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.

Rationale why you cannot borrow


1. affect ur independence – affect judgement
2. you stand in fid rr with your client, have certain position of influence over ur client such that law
presumes that you possibly exert unintended implied silent and unspoken undue influence over client.
He may find it diff to rfuse lending you money. That’s why trustee cannot borrow.
3. Conflict of interests
4. Special position of influence and proximity an advocate and solicitor has over his client

Law Society of New South Wales v Moulton


(Applied in Law Society of Singapore v Devedas Naidu [2001] 2 SLR 112)
*Hope JA:
- A solicitor stands in a fiduciary relationship to his clients
- If he is to have business dealings with them on his own account, and in particular if he is to
borrow money from them, the requirements of the law are rigorous
- Solicitor is in a position of special influence in respect of his client
- Clients must be able to rely upon the professional advice of their solicitor and to place in him the
fullest confidence that he will protect… and handle their affairs in their interest
- Where a solicitor wishes to borrow from a client, the client must be put in a position to make a
free and informed decision about the proposed transaction
- Since in these circumstances the interests of the client and… the solicitor… generally must
conflict, the best and easiest way to achieve this result is to insist that the client have
independent and informed advice

- 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)

- Rule 34 Legal Profession (Professional Conduct) Rules – Exempted Borrowing Transaction


Law Soc council given ability to exempt partr operation fr rule 33 ---
Rule34.
Rule 33 shall not apply to any transaction in respect of which —
(a) all parties thereto, other than the advocate and solicitor or the associated party, have received independent
advice and the certificate referred to in the definition of “independent advice” in rule 32 as to that advice has
been given prior to the transaction being entered into; and the advocate and solicitor has made full disclosure of
any interest of the advocate and solicitor and of any associated party;
(b) the advocate and solicitor does not act for the client in relation to the transaction but the client is represented
by an independent advocate and solicitor; or
(c) the Council determines (either before or after the transaction is entered into) that it shall not apply to that
particular transaction

Borrowings may be allowed when:


- The client has received independent advice and the lawyer has made full disclosure
- The client is presented by an independent lawyer
- The client has received independent advice and the lawyer has made full disclosure
- Where the Council specifically exempts the transaction, whether before or after the transaction.
- Where the client is in the business of lending money (e.g. A bank or financial institution)
- Re Shan Rajagopal [1994] 3 SLR 524
o Lawyer took a loan of $35,000 from his client firm the Client’s Account with the lawyer
o But did not pay any interest, furnish any security or make any provision for repayment
o The court held that this was not a normal case of borrowing but a borrowing from funds
deposited with the respondent for a particular purpose.
o The lawyer must exercise even greater care to ensure that his client was placed in a position
to make a free and informed decision about the proposed transaction, and in particular to insist
that the client take independent advice
o *Chief Justice:
 When a solicitor borrows in breach of fiduciary relationship, it is a very serious
breach of relationship of trust and confidence
o Lawyer was struck off the rolls
- Shah’s decision is still followed; But now with Rules 33, 34
Re Devadas Naidu (unreported)
- Client does not want independent legal advice
- Solicitor never paid back – complaint to Law Society
*Held: suspended, even if client refused independent legal advice, since too much conflict is otherwise

(g) Purchases and Gifts from Client

i. Purchases from Client

Rule 45 Legal Profession (Profession Conduct) Rules


45. —(1) Subject to the law on fiduciary relationship, an advocate and solicitor may purchase goods and assets
from a client only if the purchase is at the prevailing market price or at such price as is reasonable.
(2) Where practicable, the advocate and solicitor shall obtain an independent valuation of such goods and
assets.

- 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

Law Society of Singapore v Khushvinder Singh Chopra [1999] 4 SLR 775


- Lawyer acted for complainant, his son and daughter-in-law (“vendors”) in several futile transactions
involving a property.
- Lawyer attempted to purchase the property despite the complainant’s reluctance to sell to him.
- Lawyer attempted to purchase the property by persuading his son and daughter-in-law to exercise an
option in his favour
- Here, the lawyer acted as solicitor for the vendors and himself as purchaser
- Respondent was a lawyer of 9 years – Respondent persuaded the complainant’s son and daughter-in-law
to execute an option for the property in his favour. Pursuant to the option, he acted as solicitor for the 3
vendors and himself as purchaser.
- Complainant executed another option for the property to a third party at a higher price. Complainant
lodged a complaint with the Law Society on the respondent’s behaviour.
- Upon hearing of the complaint, the respondent took steps to protect his interest in the property – Got the
3 vendors to sign a supplementary agreement as well as to execute a statutory declaration, upholding the
option given to him previously and absolving him of all impropriety should the complaint be determined
by the Law Society.
- *CA:
 1st Option was not executed properly and was invalid
 Supplementary agreement and the statutory declaration were procured by the undue influence of
the respondent – court annulled them accordingly
 Both documents obtained as a result of 3 vendors not being advised of their consequences and
implications, nor being asked to seek independent legal advise prior to the execution of the
documents
o Complaint to Law Society  referred to an Inquiry Panel  disciplinary committee convened  3 charges
of conflict of interest and failure to advise 3 vendors to seek independent advice
- Lawyer struck off the rolls
 The court held that the lawyer also failed to advise his clients to seek independent legal advice
 In general, a solicitor ought not to put himself forward as a prospective principal to deal with his
client and purchase the client’s property.
- Not an absolute rule. Should the solicitor choose to do so, he had to ensure that his client received
the most disinterested advice possible, as if the client was transacting with a third party
o Here, lawyer used his legal knowledge to obtain sworn testimony which he contrived to use to his personal
and professional advantage
o Grave and serious misconduct committed whilst a member of an honourable profession and an officer of the
Supreme Court
o Thus, unfit to remain on the roll

ii. Gifts from Client

Rule 46 Legal Profession (Profession Conduct) Rules


46. Where a client intends to make a significant gift by will or inter vivos, or in any other manner, to —
(a) an advocate and solicitor acting for him;
(b) any member of the law firm of the advocate and solicitor;
(c) any member, director or employee of the law corporation of the advocate and solicitor; or
(d) any member of the family of the advocate and solicitor,
the advocate and solicitor shall not act for the client and shall advise the client to be independently advised in
respect of the gift.

- When a gift is given by the client


 To the solicitor
 A member of his firm or company
 A member of his family
- The solicitor should advise that his client seek independent advice
- look at gifts with realism – see nature of givt. For some cases, gift hamper at new year – don’t need. If he
give you large expensive gift, then ask him to seek indep advice first. If he says he knows exactly what he is
doing and says can still bill him in full, then accept the gift!

- 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

(h) Contingency Fees and Gross Overcharging

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

Contingency fees prohibited


37. An advocate and solicitor shall not enter into any negotiations with a client —
(a) for an interest in the subject matter of litigation; or
(b) except to the extent permitted by any scale of costs which may be applicable, for remuneration proportionate
to the amount which may be recovered by the client in the proceedings
Prohibition of certain stipulations
107. —(1) No solicitor shall —
(a) purchase or agree to purchase the interest or any part of the interest of his client or of any party in any suit,
action or other contentious proceeding brought or to be brought or maintained; or
(b) enter into 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.
(2) Nothing in this Act shall be construed to give validity to any purchase or agreement prohibited by subsection
(1) or to any disposition, contract, settlement, conveyance, delivery, dealing or transfer which is void or invalid
against —
(a) the Official Assignee under the law relating to bankruptcy;
(b) a liquidator or receiver under the law relating to the winding up of companies; or
(c) a creditor in any composition.
(3) A solicitor shall, notwithstanding any provision of this Act, be subject to the law of maintenance and
champerty like any other person.
(4) This section shall apply, with the necessary modifications, to a law corporation

- Restatement of section 107 LPA


- Rule 37 not only for contentious – also includes non-litigious matters; Cf. s. 107 – only regarding litigious
matters

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

- Very few cases


Law Society v Chan Chow Wang [1975] 1 MLJ 59
Solicitor to client: For every $100 000 in damages, solicitor to get a certain percentage
*Held: Breach of section 107; struck off the roll

Thai Trading Co (a firm) v Taylor James [1998] 3 All ER 65


Defendant Mrs T ordered a bed from the plaintiff company and paid a deposit. When the bed was delivered, it
did not match Mrs T’s expectation and she rejected it, refusing to pay anything more. Plaintiff brought
proceedings for the unpaid balance and Mrs T counterclaimed for the return of the money she had paid.
- Mrs T employed her husband as her solicitor, on the understanding that she would not pay anthing if she
lost.
- Mrs T won the case and obtained judgment on her counterclaim and the plaintiff was ordered to pay her
costs
- In the course of taxation, the plaintiff challenged the amount claimed to be due from it on the ground that
there was no liability, as Mrs T was not legally liable to pay her solicitor his profit costs
*High Court:
Bound by authority to hold that the agreement (for a contingency fee) was contrary to public policy and void.
So there was no legal liability on Mrs T to pay her husband’s profit costs
Thus, by virtue of the indemnity principle, no liability on the plaintiff to pay such costs

- 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

- debated in law soc – may see changes in next few yrs

ii. Gross Overcharging

- Prohibited by Rule 38 Legal Profession (Professional Conduct) Rules


- This would affect the integrity of the profession
38. An advocate and solicitor shall not render a bill (whether the bill is subject to taxation or otherwise) which
amounts to such gross overcharging that will affect the integrity of the profession.

- This is clearly morally reprehensible


 amts fo proff misconduct
 depends on whther contentious case or non contentious cases
 contentious – taxation issues ie winer obtains fees
 but if you violate the rule and have grossly overcharged own client, then this is proff misconduct
 where submit bill for 0.5 milion and taxation to 300,000 – in excss by 200,000 – is there gross
overcharging?
6.1 The Rules
(a)
- costs in non-contentious matters are regulated by the Legal Profession (Solicitors’ Remuneration) Order
 Obliged to charge according to this scale
 Cannot give discount on your fees, nor can you charge more than what the scale prescribes
 Solicitors Remuneration Order
• Voluntary scale of fees for non-litigious matters
• Cf. (eg.) Conveyancing – Fixed scale fees
• Where scale sets amounts that are not mandatory, can go above or below the scale
• NB: Rule 11A – Rule against touting
• If similar scenario as Thai Trading, would breach concept of honesty and fairness
- r. 38 Legal Profession (Professional Conduct) Rules: shall not gross overcharging
(b)
- in contentious matters, many “discretionary items”
- party and party costs are taxed by the Registrar
- solicitor and client costs are not usually taxed although, if the client feels that he is being charged too
much, he can ask the solicitor to tax his costs
- it is always safer (if you have any doubt) to have your bill taxed even if it is a solicitor and client bill
- Party and party costs are often taxed and a scale is set out in the Rules of Court
 Cannot give discount on your fees, nor can you charge more than what the scale prescribes
- Taxation of costs:
 Party and party costs are often taxed
 Registrar refers to the contentious scale of costs set out in the Rules of Court
 Solicitor and client costs are not usually taxed although if the client feels he is being
charged too much, he can ask the solicitor to tax his costs
- To avoid overcharging, safer to have bill taxed even if it is a S&C bill
- In criminal matters, no such thing as a scale – entirely a matter of contract between parties and
there is no minimum or maximum scale

*How is this decided?


i. Case law – courts look at the facts of each case
ii. Whether or not grossly overcharge
iii. Got to bring in expert evidence – would any other lawyer doing the same piece of work charge a similar
price?

- 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

- unlike other professions, our bills can be reviewed by the courts


- this is because of our FD relationship with the client, and cannot take undue advantage of the client
- if the over-charging is gross i.e. no reasonable lawyer doing that work would charge that amount = you are
misconducting yourself as a lawyer
- that is why we have a law of taxation
- see case law
o Law Soceity v N J Han: just file a caveat in the Land Registry… they charged $3000… the Law Society’s
scale was $100
==> held that if you grossly over-charge, it is a grave mis-judgement on the lawyer’s part, and the
sentence is no less than a suspension
- it is viewed by our courts that it is a serious breach to grossly over-charge the clients
- however, in taxation, you will usually find that your bill will be lowered by 2% or 3% -- this is not-
overcharging
- it is only when it is so unreasonable that no lawyer doing that work would charge = gross

*Consider: overcharge by escalation of costs by adding small amounts

SECTION 9 – REMUNERATION

9.1 Supervision by Court


- Court of Appeal decision involving an agreement on costs between a solicitor and his client: Wee Soon
Kim Anthony v. Chor Pee & Partners [2005] SGCA 53
Facts
This appeal arose from a petition by a law firm (“the respondent”) for leave to tax its bill of costs in respect of
a contentious matter, Suit No 834 of 2001 (“S 834”), which its senior partner (“Lim”) had handled for a client
(“Wee”). Wee resisted the petition on the ground that there was an agreement between the parties on the legal
fee for S 834 within the meaning of s 111(1) of the Legal Profession Act (Cap 161, 2001 Rev Ed) (“the LPA”).
Section 111(1) permitted a solicitor to make a written agreement with his client on “costs in respect of
contentious business”, but stipulated in s 111(2) that every such agreement had to be signed by the client.
The issue before the court was whether various e-mails exchanged between Wee and Lim evinced an
agreement on the legal fee for S 834. The first of these e-mails (“the 4.45pm e-mail”) was sent by Lim to Wee
shortly after the former agreed to take on S 834. Both parties assumed at the trial that the 4.45pm e-mail
contained an attachment (“the Attachment”) suggesting a “Global Brief Fee” of $275,000. Pursuant to Wee’s
e-mail in reply requesting that Lim cap his charges “on a global basis”, Lim reverted with an e-mail (“the
7.12pm e-mail”) setting out a “revised fee agreement on a lump sum basis up to conclusion of trial”. It was
common ground in the court below that this “revised fee agreement” was never communicated to Wee.
Following the above e-mails, the respondent sent Wee several invoices relating to S 834. The last of these was
an invoice (“the Invoice”) stating, inter alia, that $275,000 was due “to [the respondent’s] fees” for S 834, of
which $33,000 was outstanding. Wee paid all the sums invoiced, as well as disbursements incurred in respect
of the suit.
Lim later acted for Wee in an appeal against the dismissal of the latter’s claim in S 834 (“CA 1/2004”). A
consultant from another law firm was engaged to help Lim with CA 1/2004. Subsequently, Wee intimated to
Lim that since the consultant had done “all the work” for the appeal, Lim should contribute towards the
consultant’s charges. When Lim sent Wee a letter to confirm, inter alia, that (a) the “agreed fee” for S 834 was
$275,000 and (b) the legal fee payable in respect of CA 1/2004 was $75,000 excluding disbursements (“the
Letter”), Wee disagreed, scribbling “No!! for what” on that part of the Letter where he was to indicate his
assent.
At first instance, the judge held that there was no agreement on the legal fee for S 834 and granted the
respondent’s petition. Wee appealed against that decision.
Held, allowing the appeal:
(1) The effect of s 111(1) of the LPA was that a solicitor could not enforce an agreement on costs against his
client unless the agreement was in writing and had been signed by the client. A client could, however, enforce
against his solicitor an oral agreement on costs as well as a written agreement which had not been signed by
the solicitor: at [26].
(2) In the present case, since it was the client, Wee, who was asserting the existence of an agreement on the
legal fee for S 834, the absence of a written agreement signed by either or both parties was immaterial.
Whether the alleged agreement existed was to be decided purely on common law principles: at [27].
(3) There was something clearly amiss in the parties’ assumption that the Attachment came with the 4.45pm
e-mail. If that was indeed the case, it would have been totally senseless for Wee to ask Lim for a lump sum
fee: at [28].
(4) Although Wee did not reply to the 7.12pm e-mail, he paid the various sums totalling $275,000 invoiced
by the respondent thereafter. Furthermore, the Invoice did not indicate that the payments already made and the
final payment to be made were towards the respondent’s fee for S 834, which fee had yet to be determined.
The parties’ actions and the Invoice clearly evidenced an agreement on a lump sum fee of $275,000 for the
respondent in respect of S 834: at [29].
(5) By his remark on the Letter, Wee could not have meant that he disagreed that the “agreed fee” for S 834
was $275,000 since he had already paid this sum in full. His remark obviously related only to the other items
mentioned in the Letter: at [30].

6.2 Time Costing and Fee Agreements


- not all fee agreements entered into, if found not to be fair and reasonable, constitute professional
misconduct
- Law Society of NSW v Foreman [1994] 34 NSWLR 408:
• “No amount of costs agreements, pamphlets and discussion with vulnerable clients can excuse
unnecessary over-servicing, excessive time charges and overcharging where it goes beyond the
bounds of professional propriety”
• “Time charges have a distinct potential to result in overcharging”
• Emphasis is on 2 matters  the vulnerability of the client and the fiduciary duty of the solicitor
towards his or her client
• Fee agreements impose fiduciary obligations on the solicitor
• “there be full and frank disclosure to the client of all information known to he solicitor which the
client should know”
• the need for “careful explanation” of such agreements, especially necessary in the context of time
costing which effectively “…allows the solicitor to engage others to work in the litigation on a
time basis and so to increase greatly the benefit to the solicitor and the burden on the client.”
• It is “…likely to involve a conflict between the solicitor’s duty and his interest … the solicitor may
determine how much time is to be spent on the client’s litigation and by whom … The temptation
may exist to spend … time for which costs would not otherwise be billed or to engage on it staff
whose time could or would not be used elsewhere in the firm.”
- Such clients will, usually, be particularly vulnerable and reliant on their solicitor to explain unusual
terms, to fully and frankly advise them of the relative level of the fees
- Not to say that it may not be reasonable to charge a higher fee or to claim interest at reasonable rates on
outlays that a client could otherwise be expected to fund
- Nor is it unreasonable to use a time costing method to assess fees

THE LAWYER’S INCOME AND THE GOODS & SERVICES TAX TREATMENT OF LEGAL SERVICES

1. SOURCES OF PROFESSIONAL INCOME


- 4 sources:
a) costs for professional work – contentious or non-contentious business.
b) Interest – on monies held in the client fund: on unpaid disbursements and costs; and retained on
stamp fees.
c) Disbursements
d) Non-legal work – e.g. director’s fees and similar income; profit-sharing with clients.
2. COSTS
- GST I chargeable on the value of supply of the professional services
- Where fees are totally waived, no GST
- When fees are partially waived, GST is chargeable on the amount of fees payable
- If it is reduced after taxation, to reflect the consequent change in the GST, a credit note will have to be
issued to the client

3. INTEREST

3.1 Interest on Client’s Money


- lawyer is not obliged to account to his client for interest earned on client funds unless there is an
agreement to the contrary
- arrangement in writing as to the application of the client’s money or interest earned with the money: s.
129(5) Legal Profession Act
Interest on client’s money
129. —(5) Nothing in this section, or in any rules made thereunder, shall —
(a) affect any arrangement in writing, whenever made, between a solicitor and his client as to the
application of the client’s money or interest thereon; or
(b) apply to money received by a solicitor being money subject to a trust of which the solicitor is a
trustee.
- where client’s deposits individually amount to less than $5000/-, they may be placed in a general
deposit
- the interest retained is not consideration for any supply of services
- no GST need be charged on the interest
- GST treatment of interest received on client’s money depends on whether the money is held by the
solicitor as a stakeholder or otherwise

3.2 Money held as a Stakeholder


- solicitor is entitled to the interest on client’s money held by him as a stakeholder
- where the solicitor returns the interest to the client, there is no consideration for the services as a
stakeholder and no GST need be charged

3.3 Interest on unpaid costs


- a solicitor may charge interest at 8 per centum per annum on his disbursements and costs whether
by scale or otherwise from the expiration of one month from demand from the client
- paragraphs 4 and 5 of the Legal Profession (Solicitors’ Remuneration) Order
Solicitor may accept security for amount due to him from client
4. A solicitor may accept from his client, and a client may give to his solicitor, security for the amount to
become due to the solicitor for business to be transacted by him and for interest on such amount, but so
that interest is not to commence till the amount due is ascertained either by agreement or by taxation.
Interest
5. —(1) A solicitor may charge interest, at the same rate as a judgment debt, on his disbursements and
costs from the expiration of one month from the solicitor’s demand for payment from the client.
(2) In cases where the disbursements and costs are payable by any infant or out of a fund not presently
available, the demand under sub-paragraph (1) may be made on the parent, guardian, trustee or other
person liable.

3.4 Interest on Stamp Fees


- advised that lawyers may retain interest on stamp fees paid in advance on ‘completion’ of equitable
mortgages as follows:
1. whether a mortgagees’ solicitor to whom stamp fees on a Transfer/Mortgage had been deposited
was under an obligation to account to the mortgagor for any interest earned on the stamp fees
pending the issue of the title and registration of the Transfer/Mortgage”
2. mortgagee’s solicitor is not a solicitor for the mortgagor
3. solicitor for the mortgagee is not obliged to place the stamp fees on Fixed Deposit for the benefit
of the mortgagor
4. interest (if any) earned on the stamp fees belong to the mortgagees’ solicitor and the mortgagor is
not entitled to impose any terms or conditions in respect of any interest earned: Law Society
Circular [1982] 1 MLJ cxxvi

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

4.1 Interest on unpaid disbursements


- Registrar may allow interest, at such rate and from such time as he thinks just, on monies disbursed by
a lawyer for his client: s. 127 Legal Profession Act
Interest in respect of disbursements and advances
127. The Registrar may allow interest, at such rate and from such time as he thinks just, on moneys
disbursed by a solicitor for his client, and on moneys of the client in the hands of the solicitor and
improperly retained by him.
- High Court has power to direct interest to be paid on debts: para 6 of the First Schedule to the Supreme
Court of Judicature Act
- Under s. 80 SCJA, the Rules Committee is given power to makes rules regulating the payment of
interest payable on all debts - “interest exceed 8% p.a., unless it has otherwise been agreed”
Para 6, First Schedule SCJA –
Interest
6. Power to direct interest to be paid on damages, or debts (whether the debts are paid before or after
commencement of proceedings) or judgment debts, or on sums found due on taking accounts between
parties, or on sums found due and unpaid by receivers or other persons liable to account to the court.
Rules of Court
80. —(1) The Rules Committee constituted under subsection (3) may make Rules of Court regulating and
prescribing the procedure (including the method of pleading) and the practice to be followed in the High
Court and the Court of Appeal respectively in all causes and matters whatsoever in or with respect to
which those courts respectively have for the time being jurisdiction (including the procedure and practice
to be followed in the Registry of the Supreme Court) and any matters incidental to or relating to any such
procedure or practice.
[16/93]
(2) Without prejudice to the generality of subsection (1), Rules of Court may be made for the following
purposes:
(a) prescribing the manner in which, and the time within which, any application which under this Act or
any other written law is to be made to the High Court or the Court of Appeal shall be made;
(b) prescribing what part of the business which may be transacted and of the jurisdiction and powers
which may be exercised by a Judge in court or in chambers may be transacted or exercised by the
Registrar, the Deputy Registrar or an Assistant Registrar (including provisions for appeals against
decisions of the Registrar, the Deputy Registrar or an Assistant Registrar);
(c) regulating and prescribing the procedure to be followed in regard to proceedings under the
Government Proceedings Act (Cap. 121) where such proceedings are instituted in the Supreme Court;
(d) regulating and prescribing the procedure to be followed on appeals from any subordinate court to the
High Court or the Court of Appeal and the procedure in connection with the transfer of any proceedings
from any subordinate court to the High Court or from the High Court to a subordinate court;
(e) regulating and prescribing the procedure to be followed on appeals from the High Court to the Court
of Appeal;
(f) prescribing the scales of allowances, costs and fees to be taken or paid to any party or witness in any
proceedings in the High Court or the Court of Appeal, and for regulating any matters relating to the costs
of proceedings in such courts;
(g) enabling proceedings —
(i) to be commenced in the High Court against the estate of a deceased person (whether by the
appointment of a person to represent the estate or otherwise) where no grant of probate or letters of
administration has been made;
(ii) purporting to have been commenced in the High Court by or against a person to be treated, if he was
dead at their commencement, as having been commenced by or against, as the case may be, his estate
whether or not a grant of probate or letters of administration was made before their commencement; and
(iii) commenced or treated as commenced in the High Court by or against the estate of a deceased person
to be maintained (whether by substitution of parties, amendment or otherwise) by or against, as the case
may be, a person appointed to represent the estate or, if a grant of probate or letters of administration is or
has been made, by or against the personal representatives;
(h) regulating the means by which particular facts may be proved, and the mode in which evidence
thereof may be given, in any proceedings or on any application in connection with or at any stage of any
proceedings;
(i) regulating the joinder of parties and for prescribing in what cases persons absent, but having an
interest in a cause or matter, shall be bound by any order made therein, and in what cause or matter orders
may be made for the representation of absent persons by one or more parties to a cause or matter;
(j) regulating the rate of interest payable on all debts, including judgment debts, or on the sums found due
on taking accounts between parties, or on sums found due and unpaid by receivers or other persons liable
to account to the court, except that in no case shall any rate of interest exceed 8% per annum, unless it has
been otherwise agreed between the parties;
(k) prescribing in what cases money due under a judgment or order is to be paid into court;
(l) regulating the modes in which a writ of seizure and sale may be executed, and the manner in which
seizure may be made of any property seizable thereunder, and the mode of sale by the Sheriff or any other
officer of the Supreme Court of any property so seized, and the manner in which the right and title of
purchasers of the property at any sale by any officer of the Supreme Court may be secured to the
purchasers;
(m) regulating the discovery of a judgment debtor’s property in aid of the execution of any judgment or
order;
(n) the taking of evidence before an examiner on commission or by letters of request, and prescribing the
circumstances in which evidence so taken may be read on the trial of an action;
(o) prescribing in what cases and on what conditions a court may act upon the certificate of accountants,
actuaries or other scientific persons;
(p) prescribing the duties of the Accountant in respect of funds or property in the custody of the court, and
in particular prescribing the mode of transfer of securities into the name of the Accountant, and the
method of investment of any such funds, and the rate of interest to be charged thereon, and the manner in
which unclaimed funds may be dealt with; and
(q) amending, altering or adding to the forms set out in any written law relating to criminal procedure.
[16/93;2/94]
(3) The Rules Committee shall consist of —
(a) the Chief Justice, who shall be the Chairman of the Committee;
(b) the Attorney-General;
(c) not more than 5 Judges of the Supreme Court to be appointed by the Chief Justice for such period as
he may specify in writing;
(d) the Senior District Judge;
(e) a District Judge to be appointed by the Chief Justice for such period as he may specify in writing; and
(f) 2 practising advocates and solicitors to be appointed by the Chief Justice for such period as he may
specify in writing.
[3/96]
(4) At any meeting of the Rules Committee, 5 members shall form a quorum and all questions shall be
decided by a majority of votes of the members present and voting.
(5) No Rules of Court shall be made without the consent of the Chief Justice.
(6) All Rules of Court made under this section shall be presented to Parliament as soon as possible after
publication in the Gazette.

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;

5.2 Director’s fees and similar income


- director’s fees that he earns are not considered to be subject to the jurisdiction of the court
- if the lawyer in his capacity as solicitor acts contrary to the rules would be guilty of professional
misconduct
- traditionally, director’s fees earned by a partner may be retained by that partner and do not form part of
the partnership income
- however, in modern legal partnership, must be accounted for to the firm
- reason is that many legal partnerships have suffered from the situation where a partner becomes more
engaged in profitable outside work

5.3 GST Treatment


- where fees are retained by the firm attracts GST
- where director’s fees are retained by the solicitor himself, treated as in his individual capacity
- also does not have to account for any output tax on the director’s fee, unless he is registrable or
registered for GST purposes, in his own right
- also applies to fees earned by a solicitor as a Commissioner of Oaths and Notary Public

5.4 Profit-sharing with clients


- lawyer may not share receipts from his professional practice with unqualified persons
- where the lawyer feels he would like to become involved in the client’s commercial ventures, then he
should advise the client to seek independent advice and cease to act for him as a lawyer while the
commercial venture is shared
- even then, the risks are great as there is always the probability that the court will presume that the
lawyer exerted an undue influence over the client

*WARNING: DO NOT ENGAGE IN PROFIT-SHARING VENTURES WITH CLIENTS.

(i) Tendering Advice for an Illegal Purpose

Rule 22 Legal Profession (Profession Conduct) Rules


- A solicitor shall not tender advice to a client when the advocate and solicitor knows or has reasonable
grounds to believe that the client is requesting the advice to advance an illegal purpose
- This rule is similar to s.128(2)(a) Evidence Act which waives Legal Professional Privilege in instances
where the client communicates with the lawyer in furtherance of an illegal purpose
- The lawyer’s duty to is client is limited in this manner as his foremost duty is to the court

(j) Termination of retainer


- A client may terminate his retainer at any time, Rule 41(a) Legal Profession (Professional Conduct) Rules

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

10.1 Types of Lien


- 2 rights:
1. a right to retain property already in his possession until his costs have been paid 
retaining/general lien
2. right to ask the court to direct that personal property recovered under a judgment obtained by his
exertions stand as security for his costs of such recovery  particular lien
10.2 General Lien
- attaches to all deeds, papers, or other personal property which come into the solicitor’s possession in
the course of his professional employment with the sanction of the client
- lien extends only to the solicitor’s taxable costs, charges and expenses incurred for which the client is
personally liable
- solicitor is entitled to retain the property that is the subject of the lien until the amount of his costs has
been paid in full
- however, is still subject to the right of the client to have the costs taxed
10.3 Particular Lien
- particular lien extends only to a fund or the proceeds of a judgment recovered for the client in the
course of litigation or arbitration, but not over the fruit of negotiation without litigation
- only a right to ask for the court’s intervention for the solicitor’s protection when there is a possibility of
the client’s depriving him of his costs
- until that is done the solicitor has no right to the money
- lien does not attach to real property
10.4 Order 29, Rule 6 of the Rules of Court
Recovery of movable property subject to lien, etc. (O. 29, r. 6)
6. Where the plaintiff, or the defendant by way of counterclaim, claims the recovery of specific movable
property and the party from whom recovery is sought does not dispute the title of the party making the claim
but claims to be entitled to retain the property by virtue of a lien or otherwise as security for any sum of
money, the Court, at any time after the claim to be so entitled appears from the pleadings (if any) or by
affidavit or otherwise to its satisfaction, may order that the party seeking to recover the property be at liberty
to pay into Court, to abide the event of the action, the amount of money in respect of which the security is
claimed and such further sum (if any) for interest and costs as the Court may direct and that, upon such
payment being made, the property claimed be given up to the party claiming it, but subject to the provisions of
the Exchange Control Act (Chapter 99).
- Ismail and Another v. Richards Bulter (a firm) [1996] 3 WLR 711:
• Defendants refused to hand over the plaintiffs’ papers unless outstanding fees of some £450,000
for completed and pending cases were paid
• Defendants issued a writ seeking to recover their outstanding fees
• Plaintiffs issued an originating summons seeking delivery up of their papers with final bills of
costs to be taxed
• Master ordered that upon payment by the plaintiffs of a sum of £150,000 to the defendants and a
sum of £310,000 into court, the defendants should deliver to the plaintiffs’ solicitors all papers
relating to the pending litigation
• Plaintiffs appealed
• Held, power of the court under Order 29, Rule 6 of the Rules of Court to require a plaintiff to pay
into court the whole amount claimed by the defendant in order to recover personal property subject
to a lien did not replace the court’s jurisdiction to grant relief in equity against the exercise of a
solicitor’s lien where the solicitor had discharged himself and the exercise of his lien would
interfere with the course of justice
• Where a solicitor terminated his retainer, the client was normally entitled to an order that his
papers be handed over to his new solicitor without security as to the former solicitor’s outstanding
fees, against an undertaking that the lien would be preserved
• It was appropriate in the interests of justice to order the defendants to deliver up the documents in
the outstanding litigation on the plaintiffs providing security of £450,000 for the defendants’
outstanding claim for costs, as the value of the lien to the defendants was likely to be considerably
diminished if the papers were handed over and where no hardship would be caused to the plaintiffs

(k)Withdrawal from a retainer by a lawyer

Rule 42, Legal Profession (Professional Conduct) Rules.


Withdrawal of retainer by lawyer – Rule 42

Rule 42 - Withdrawal
(1) Subject to rule 41, an advocate and solicitor may withdraw from representing a client —

Valid reasons – Rule 42(1) Comments


(a) at any time and for any reason if the • If client consents to withdrawal
withdrawal will cause no significant harm to the (voluntarily assents), need to get consent
client’s interest and the client is fully informed of in writing and client’s signature
the consequences of withdrawal and voluntarily
assents to it;

(b) if the advocate and solicitor reasonably • Serious effect on health


believes that continued engagement in the case or
matter would be likely to have a serious adverse
effect upon his health;

(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;

(d) if a client makes material misrepresentations • Client suffered material


about the facts of the case or matter to the misrepresentation of fact
advocate and solicitor;

(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;

(f) 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; or

(g) where any other good cause exists. • Catch-all clause – Where lawyer has a
‘good cause’ to terminate

Circumstances when the lawyer may withdraw


1. At any time and for any reason
- If the withdrawal will cause no significant harm to the client’s interest
- The client is fully informed of the consequences of withdrawal and
- Voluntarily assents to it
2. Completion of the business for which the retainer was given,

3. Or expiry of a fixed period retainer

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)

6. Lawyer has an interest in the matter adverse to the client

7. Bankruptcy of the Client


- For example in Re Moss [1886] LR 2 Eq 345
- Or bankruptcy of the lawyer as he would be suspended by s.80(2)(c) Legal Profession Act

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), Legal Profession (Professional


Conduct) Rules.
- But at all times, the solicitor has an obligation to take reasonable care and avoid foreseeable harm to his
client when withdrawing by giving client enough time, to co-operate with the new solicitor and subject to
payment of fess, handing over all papers and property to the new solicitor.

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.

Cf. termination anytime

- 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

SECTION 12 – LIABILITY TO THE CLIENT

12.1 Contractual Liability


12.2 Duty of Care and Skill
- if, therefore, he causes loss or damage to his client owing to want of such knowledge, he is guilty of
negligence
- standard of care usually adopted is that of a reasonably competent solicitor, but if the solicitor is
consulted as a specialist, the standard of a specialist may be expected
- solicitor may escape liability on the ground that he acted upon another counsel’s advice, but he must
show that the counsel whom he consulted was, in his judgment, a competent person, that the facts of the
case were fully laid before the other counsel, and that he himself merely carried out what the other
counsel had advised

- 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

- Yeo Yoke Mui v. Ng Liang Poh [1999] 3 SLR 529:


• Appellant Yeo instructed Ng, a lawyer, to act for her
• Ng enclosed a copy of the road interpretation plan to Yeo informing her that the property was
“affected by Categories 4 and 5 Road Proposal”
• However, Ng did not say anything as to how the property would be affected
• Yeo entered into a sale and purchase agreement with KH and paid the balance of the 10% deposit
to KH directly
• Yeo then annulled the transaction on the ground that it was affected by the road reserves
• Yeo sued KH and Ng
• As against KH, the trial judge held that she was not entitled to annul the sale and purchase
agreement and allowed KH’s counterclaim for damages for breach of contract
• As against Ng, the judge held that Ng did not breach his duty
• Yeo appealed against the decision in Ng’s favour
• Court of Appeal allowed Yeo’s appeal
• However, the Court first observed that Yeo’s argument that Ng was negligent in failing to warn her
of the risk in agreeing to release the balance of the 10% deposit to KH was a non-starter as she did
not appeal against the decision that she was not entitled to annul the sale agreement
• Thus, the Court of Appeal determined that the only issue on appeal was whether Ng had breached
his duty in failing to advise Yeo of the meaning of Category 4 road and the effect such a road had
on the property
• Ng had a duty to advise Yeo on the effect of the road reserves as shown on the road interpretation
plan
• His duty was to interpret the explanatory notes
• He had almost 6 weeks to advise her but left such material advice till the last stage, leaving Yeo
with no opportunity to make an informed decision as to whether to proceed with the sale and
purchase
• Court of Appeal further held that there was indeed a causal link between Ng’s breach of duty and
Yeo’s loss
• The standard of care expected of Ng was that of the reasonably competent conveyancing lawyer

- Pickersgill and Another v. Riley [2004] UKPC 14:


• P is a solicitor
• R owned the shares in a company, M
• P advised R on a transaction in which M took a 28-year lease of business premises in Jersey and
then the shares in M were sold to an English company, W
• When the shares in M were sold, R was not released from his guarantee but W agreed to indemnify
R against any liability he might incur under the lease guarantee
• Later, M became insolvent and the lessor called on R’s guarantee of the rent
• R had to pay the lessor and sought reimbursement from W
• It turned out that W was and had always been a shell company with no assets
• R sued P in negligence
• Judge and the Court of Appeal both held that P was in breach of duty in failing to investigate the
financial standing of W or to advise R of the risk he ran by not doing so
• Privy Council allowed the appeal, holding that the scope of P’s duty of care depended on the
content of the instructions given to him and the particular circumstances of the case
• A solicitor was not obliged to go outside his instructions and make investigations which were not
expressly or impliedly requested by the client
• R was an experienced businessman and was aware of the nature of the guarantee he was giving
• R had himself negotiated the share sale and P was instructed to implement the terms which had
been agreed
• The possibility that W might be a company with no or little financial substance was a commercial
risk that R could have been expected to be aware of
• It was not a legal complexity or hidden pitfall that P had a duty to warn R about

- Dixon v. Clement Jones Solicitors (a Firm) [2004] EWCA Civ 1005:


• There was a distinction between cases alleging professional negligence where the negligence arose
out of a transaction or advice given by a professional person,
• and those where the claim was for the loss of the chance to litigate where the underlying litigation
involved professional negligence
• in the former, questions of causation were relevant; in the latter, the task of the trial judge was to
evaluate the chance which had been lost, not to perform a trial within a trial to determine what the
outcome of that litigation would be
• judgment was given in favour of the claimant, and the defendant solicitor’s appeal to the Court of
Appeal was dismissed
• held that negligence had been acknowledged when the claimant’s professional negligence claim
against accountants was struck out for her solicitors’ failure to serve particulars of claim
• judge found that the struck-out claim was of some value, and he assessed the claimant’s chance of
success at 30%

12.3 Duty to Protect Client’s Interest


- Groom v. Crocker [1938] 2 All ER 394, a solicitor should at least:
(a) Carry out his instructions in the matters to which the retainer relates, by all proper
means;
(b) Consult the client on all questions of doubt which do not fall within the express or
implied discretion left to him; and
(c) Keep his client informed to such extent as may be reasonably necessary.
- Make proper investigation into the cause of action
- Knowing that the client had done some act which will preclude him from recover, must point this out
- Advise the client not to enter into litigation though success is improbable
- Renew a writ in time to prevent the Limitation Act
- Explain to his client the legal consequences of any step which the client proposes to take
- Communicate offers of compromise to his clients
- Warn a client that a remedy is only open to him for a limited time

- 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.

- Credit Lyonnaise SA v. Russell Jones & Walker (a Firm) [2003] PNLR 2:


• A firm of solicitors was held to be in breach of its duty of care because it assigned a property case
to a competent and capable corporate lawyer who was not aware, as a property lawyer would have
been, of the time-critical nature of a break option clause
• Held that a solicitor was under no general obligation to expend time and effort on issues outside his
retainer
• However, if, in the course of doing that for which he was retained, he became aware of a risk or a
potential risk to the client, it was his duty to inform the client
• It was also held that if in the course of carrying out his instructions within his area of competence a
lawyer noticed or ought to have noticed a problem or risk for the client, the lawyer must warn him
• Although the individual solicitor assigned to the case was competent and capable, the firm had
failed in its duty to its client by assigning a corporate lawyer to a property case
• However, it is not part of the solicitor’s duty, in the absence of special instructions, to advise his
client on matters of business, but he should warn him of the risk involved
- in non-contentious matters, a solicitor should explain adequately to his client any document which is to
be executed by the client, such as a deed will or bill of sale
- in acting under a voluntary settlement, should see that all usual clauses, such as ultimate power of
appointment in the settler’s favour after the specific trusts have been worked out, are inserted,
- and to point out to his client the statutory provisions
- where acting for a mortgage, he should require production of the deeds relating to the property
- make the usual proper searches in bankruptcy or give notices to secure priority for a charge taken on his
client’s behalf

- 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.

- e OP and TP [2002] Fam CA 115:


• Counsel’s improper behaviour and flagrant incompetence
• Improper behaviour was said to be counsel’s lunching with the wife’s counsel and his decision not
to call certain witnesses
• Flagrant incompetence was said to be a number of failings in the course of the trial
• Court dismissed the appeal, holding that impropriety had not been established
• Under the Australian Family Law Act 1975, the first issue was whether incompetence was
established and the second issue was whether there was any prejudice
• The party relying on the assertion must show that there was a reasonable probability that, but for
counsel’s unprofessional errors, the result of the proceedings would have been different
• Must show that it was reasonably probable that the result of the trial would have been different,
although there may be cases where the procedural irregularities were such as to demonstrate a
miscarriage of justice regardless of the result
• (followed decision in Director of Child, Family and Community Service v. British Columbia
[2002] 99 BCLR (3d) 231)
• the Court held that, on the facts, no miscarriage of justice had been established
- John Mowlem Construction plc v. Neil F. Jones & Co (a Firm) [2004] EWCA Civ 768:
• Construction company J appealed against a decision dismissing its claim in negligence against the
respondent firm of solicitors N
• J employed C as subcontractors
• The contract required C to maintain professional indemnity insurance
• C had instructed N to recover debts allegedly owed by J
• J threatened to bring a large contingent claim against C, but C failed to notify its insurers when
renewing its cover
• The arbitrator rejected C’s claim but awarded J damages and costs of over £1 million
• C’s insurers declined to meet J’s claim on the ground of non disclosure or misrepresentation
• J maintained that N’s retainer had been extended to cover every aspect of J’s counterclaim,
including obligation to ask whether C was insured against such a claim and to advise C to notify
the claim to its insurers
• Court of Appeal dismissed the appeal, holding that N had not been retained to advise on insurance
• C had been perfectly capable of dealing with such matters
• Held that, faced with what was thought to be a tactical counterclaim, a reasonably competent
solicitor would not have immediately asked about insurance and advised notification
• On causation, the court was of the opinion that the judge had been entitled to conclude that C
would not have followed any advice on insurance and notification that N might have given

12.4 The Importance of Keeping Contemporaneous Attendance Notes


- keeping attendance slips and aide-memoirs: SMO Othaman Chettiar v. Ang Gee Bok [1971] 1 MLJ 91
Othaman - Facts:
Three days before the expiry of the six years` period of limitation, the plaintiff instituted this action to recover
payment of $4,000 he alleged to have lent to the defendant on the security of a promissory note and for
interest accrued at the agreed statutory rate. The defence was a denial of the loan in the sum alleged. The sum
of $400 only was admitted as having been received and it was alleged that this sum was not handed to the
defendant in the presence of the solicitor who attested the promissory note at the time of the execution.
Holdings:
Held , on the evidence the plaintiff had not, even on a balance of probability, established the loan alleged or
rebutted the direct evidence of the defendant.
Per Chang Min Tat J: "Attendance-slips as they are usually called in the profession must be seen to be of the
utmost importance not only in recalling past events to mind but also for purposes of taxation of costs. It is, I
realise, not part of my duty nor should it be my presumption to advise solicitors on how they should or should
not carry out their work but I would venture, with some diffidence, to suggest that solicitors would do well to
bear in mind the possibility of their being called to the witness stand."
Editorial Note:The plaintiff`s appeal to the Federal Court (Federal Court Civil Appeal No 81 of 1970) was
withdrawn on 18 January 1970.
- ensure that he or she regularly confirms his or her advice and instructions in writing
- Lie Hendri Rusli v. Wong Tan and Molly Lim (a firm) [2004] 4 SLR 594:
• “of real assistance in clarifying matters and corroborating a solicitor’s testimony in the event of a
dispute over what has transpired”
(a) “document the nature and scope of retainers with clients;
(b) maintain reliable minutes of discussions with clients; and
(c) carefully consider whether to document through correspondence significant advice
rendered.”
• Held that the absence of such notes did not inexorably mean that the solicitor was to be disbelieved
in the event of a dispute
• Even so, ultimately find himself handicapped in the event that the credibility of his evidence
should come under the scrutiny of the court
Facts
The plaintiff was the principal director and shareholder of PT Bangun Persada Tata Makmur (“PTB”), an
Indonesian distributor of electronic goods. PTB had an important and close business relationship with a group
of related electronics distributors in Singapore (“the Alps Group”), which included Alps Investment Pte Ltd
(“Alps”).
In November 1999, PTB’s business met with difficulties as a result of the Asian financial crisis, and the Alps
Group pressed PTB to settle its debts. Agnes Goh, the principal officer in the Alps Group servicing PTB,
proposed that the plaintiff mortgage his apartment to Malayan Banking Berhad (“MB”) for Alps’ benefit, so
that PTB could obtain a higher credit limit using Alps’ letter of credit arrangements. The Alps Group would
then also deal with PTB’s debts benignly. The plaintiff agreed.
On the suggestion of Anthony Koh (“AK”), an officer in the Alps Group, the plaintiff agreed to engage the
defendant firm of solicitors to act for him. The plaintiff was aware that the defendant also represented the Alps
Group. Tan Yah Piang (“TYP”), the senior conveyancing partner with the defendant, received instructions
from AK to act for Alps in the restructured facility arrangement with MB. Around the same time, the
defendant also received instructions from MB to act for it in the restructured facility agreement with Alps.
TYP prepared the necessary documents to secure the proposed mortgage of the apartment (“mortgage
documents”), which included an “all moneys clause” making the plaintiff personally liable for all facilities
extended by MB to Alps.
The plaintiff, AK and TYP met at TYP’s office on 21 December 1999. TYP used both English and Mandarin
to explain the legal implications of the mortgage documents to the plaintiff, who had a weak command of
English and preferred to use Mandarin. The plaintiff did not ask any questions or communicate any concerns
to TYP prior to and after signing the documents. TYP did not keep an attendance note of the meeting.
In 2002, the Alps Group met with serious financial difficulties. The plaintiff sought to redeem the apartment
from MB. Eventually, the apartment was discharged by way of a partial discharge of mortgage, while the
personal covenant undertaken by the plaintiff in the mortgage documents subsisted. MB later commenced
proceedings in 2003 against several parties, including the plaintiff, who settled MB’s claim against him for
$500,000.
The plaintiff thereafter commenced these proceedings, alleging that he had suffered a loss of $500,000 as a
result of TYP’s negligence in failing to explain to him and/or advise him on the potential consequences arising
from his signing the mortgage documents, as he had unwittingly become a surety for MB’s loan facilities to
Alps.
Held, dismissing the claim:
(1) The plaintiff was aware that the proposed mortgage was intended to secure all credit facilities extended
by MB to Alps: at [24].
(2) The plaintiff was not concerned about the extent of the facilities or the possibility that the facilities
would be varied, as he did not expect or contemplate that Alps would be unable to repay its debts to MB: at
[26].
(3) Contrary to the plaintiff’s claims, TYP had explained to him in some detail the intent and purport of the
mortgage documents. Indeed, when asked by TYP, he confirmed that he understood TYP’s explanation and
had no questions to ask. He did not communicate to TYP at any time any concerns about the transaction: at
[28] to [30], [39].
(4) TYP candidly admitted that he had not informed the plaintiff that he was also concurrently acting for
Alps and MB. However, this did not mean that TYP had been negligent. It was not a material omission, as the
plaintiff would have proceeded with the transaction regardless. The plaintiff had been fully aware of TYP’s
representation of Alps. Also, TYP did not let his representation of MB affect his conduct of the matter vis-à-
vis the plaintiff: at [68].
[Observation: While it was good practice for a solicitor to maintain contemporaneous attendance notes, the
absence of such notes did not inexorably mean that he was to be disbelieved in the event of a dispute.
However, he might find himself handicapped when the credibility of his evidence was assessed in court: at
[36], [63] to [64].
The risk of a conflict of interests arose when a solicitor (or an advocate) acted for multiple parties, and the
reluctance of many to act for multiple clients, did not call into question the actual legitimacy of the practice of
acting for multiple parties. Nevertheless, in the interests of the legal profession and the public, it had to be
considered if clearer policies and rules had to be formulated in approaching issues of conflicts of interests,
especially in conveyancing and loan transactions: at [48] to[57].]

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.

S-ar putea să vă placă și