WIH v WII [2020] SGHCF 1

The respondent was going through divorce proceedings with his wife. On 14 October 2017, he was introduced to Lau through Lau’s wife who was the respondent’s colleague. Lau is a lawyer with the appellant law firm. The respondent expressed his unhappiness with his divorce proceedings and told Lau that he was represented by EHE.

On 4 and 5 November 2017, the respondent sent the divorce documents including the first affidavits of both parties to Lau. He then met Lau for an hour on 8 November 2017. The meeting ended with the respondent stating his intention to discharge EHE. Lau emailed the respondent the next day, 9 November, attaching a Letter of Engagement and a Warrant to Act. He then met the respondent personally at the latter’s request and handed hard copies of the two documents to him.

On 20 November 2017, the respondent wrote to Lau to say that he would think about the Letter of Engagement, but in the meantime, he would pay Lau for consultation thus far. Lau then emailed the respondent with his bill for consultation amounting to $2,500. The respondent paid the bill.

From January 2018 to 21 April 2018, the respondent contacted Lau occasionally, and even met for lunch. The respondent expressed his concern that the divorce proceedings were still stuck at the “first affidavit” stage. Lau advised the respondent to consider acting in person since the respondent’s wife had just discharged her solicitors. “But first, you should find out how much your EHE lawyers are going to charge you; get a fee estimate,” he advised.

On 24 April 2018, the respondent told Lau that he wanted to engage the appellant law firm to take over from EHE in acting for him in his divorce proceedings. He met Lau the next day to say that although he would pay a $40,000 deposit (which he did), he would defer signing the Letter of Engagement. Lau denied this, claiming that the respondent signed the Letter of Engagement that day, 25 April 2018, even though the letter required only a deposit of $30,000.

On 26 April 2018, the respondent told Lau that he (the respondent) had negotiated a consent order with his wife and requested that Lau draw up the consent order. Lau advised the respondent that the appellant should take over the case soon in case there is no settlement. On 29 April 2018, the respondent told Lau that there would be a mediation on 3 May 2018 regarding a maintenance summons, Maintenance Summons No 1496 of 2018 (“MSS 1496”), taken out by the wife. Lau told the respondent that he would attend the MSS 1496 mediation on his behalf. The respondent, on his own account, wrote to the Family Court expressing his concerns of a duplicity of action with the maintenance application. The respondent claims that he had decided to engage Lau on 30 April and told him so by telephone that day. He also sent Lau the Letter of Engagement and Warrant to Act, duly signed, and another sum of $40,000.

On 3 May 2018, the respondent met Lau who advised that the respondent contest MSS 1496 with full vigour as it was a matter of “life and death”. Lau had written to the court on 2 May 2018 requesting that the hearing for MSS 1496 be adjourned, and it was adjourned to 17 May 2018. Lau attended the first hearing on that day and no substantive orders seemed to have been made — neither party explained what happened at the mention of MSS 1496 on 17 May 2018 — but the next day, Lau sent the respondent an invoice for $45,000 (excluding goods and services tax (“GST”)).

When the respondent expressed his shock at the bill for that one letter and a 45-minute appearance in court, Lau assured the respondent that there was little chance that the final fees would exceed the agreed sum. The respondent discharged Lau on 22 May 2018.

On 30 May 2018, Lau sent his final invoice of $8,125 (excluding GST). His staff (one Jennifer) told the respondent that the firm would transfer the balance deposit of $27,849.75 to HWL Practice LLC who had been instructed by the respondent to take over from Lau. A cheque for that amount was sent to HWL Practice LLC on 31 May 2018.

The Letter of Engagement, which incorporated the Warrant to Act, is a four-page document. The relevant parts are, first, the subject matter, which is “Representation in Divorce Proceedings”. The relevant terms are then set out in cll 6 to 11, and cl 15. These clauses are set out in full below:

The Letter of Engagement was dated by hand on 30 April 2018 even though it was first given to the respondent on 9 November 2017. The letter was not amended although the respondent paid the initial deposit of $40,000 and not $30,000 as stated in cl 13.

Lau had submitted two invoices to the respondent. On the facts, largely undisputed, the sole issue before the court was whether the respondent, notwithstanding the Letter of Engagement, was entitled to have the two invoices taxed. The first was on 18 May 2018, an interim bill for $45,000 ($48,435 including GST), and the final invoice was on 30 May 2018 for $8,125 ($8,715.15 including GST).

Mr Adrian Tan, counsel for the appellant law firm, submits that the Letter of Engagement constituted a “contentious business agreement” under s 111(1) of the Legal Profession Act (Cap 161, 2009 Rev Ed) and therefore, the respondent is not entitled to have it taxed. Counsel relies on s 112(4). The provisions are set out below for convenience:

The provision specifies some special conditions for its application. First, it applies only in contentious business. Second, it may apply either in respect of a fixed gross sum or by way of an agreed rate of payment.

To the extent that s 112 provides that such an agreement shall not be subject to taxation under s 111, it is unclear because if, as in the present case, the agreement specified the rate as $650 an hour, and there is a dispute as to how many hours of work the lawyer had actually done, surely, the client is entitled to have the bills taxed.

In this case, the agreement refers only to work in respect of the divorce proceedings. Some of the work concerned the summons brought under the MSS 1496 proceedings, which was filed as a separate originating process under s 69(1) of the Women’s Charter (Cap 353, 2009 Rev Ed). It is a process for a claim by a wife, and divorce proceedings are not a prerequisite for such an application. The Letter of Engagement was drafted by solicitors and so it behoves them to be clear. MSS 1496 is a separate action, but if consolidated with the divorce action it might be considered part of the divorce proceedings, but not until that happens.

Clause 7 of the Letter is ambiguous in that while purporting to be a warrant for the appellants to represent the respondent “generally in Singapore”, it goes on to state “in connection with the above matter”. And the above matter can only refer to the “divorce proceedings”. MSS 1496 was not relevant at the time the Letter of Engagement was sent to the respondent.

Furthermore, cll 8 and 9 of the Letter of Engagement are important because they provide that the fees are to be based on the “actual time spent”, and that the agreed fee was only “our ballpark fee” in the range of $80,000 to $140,000. It goes on to state that this is only “a fee estimate”. There is no definite figure and in the face of a challenge over the hours spent, the bill must be taxed.