Engelin Teh Practice LLC v Wee Soon Kim Anthony

Judith Prakash J:

[1] This matter has a rather lengthy history. The defendant, Mr Anthony Wee Soon Kim, is the plaintiff in High Court Suit No 834 of 2001 (“Suit 834”), an action which he started against UBS AG (“the Bank”). Mr Wee’s solicitors in the action as disclosed in the writ were M/s Engelin Teh & Partners (“the firm”), a firm comprising 18 solicitors in all, nine of whom were partners. The managing partner of the firm was Ms Engelin Teh SC and she was at all relevant times the solicitor having conduct of Suit 834 on behalf of Mr Wee. On 1 February 2002, Engelin Teh Practice LLC (“ETP”), a law corporation and the plaintiff in this originating summons, was incorporated. Ms Teh became the managing director of ETP and she continued to conduct Suit 834 on behalf of Mr Wee until 8 July 2002 when Mr Wee instructed new solicitors.

[2] On 15 March 2003, ETP filed this originating summons. It seeks the following relief:

(a) a determination that the written agreement for costs dated 20 July 2001 (“the Written Agreement”) is valid and binding on Mr Wee; and

(b) an order that Mr Wee pays ETP the outstanding amount due in its tax invoices nos 02/0257 and 02/0258, both dated 22 March 2002, which were rendered to Mr Wee in accordance with the Written Agreement.

Mr Wee subsequently entered an appearance by his solicitors, M/s Rodyk & Davidson, and disputed the existence of the Written Agreement.

[3] To understand how the matter then developed, it is necessary for me to give a brief account of each party’s version of what had occurred.

[4] The originating summons was accompanied by an affidavit affirmed by one Sim Yuan Po Thomas, an advocate and solicitor who is currently practising in ETP. He stated that Mr Wee was at the material time a client of the firm. The firm was dissolved on 1 February 2002 and ETP was incorporated to take its place. All references in his affidavit to the “plaintiff” or “ETP” were stated to be references to the firm in so far as they related to matters occurring prior to 1 February 2002, and to be references to ETP in so far as they related to matters occurring after 1 February 2002.

[5] In February 2001, Mr Wee held preliminary discussions with Ms Teh regarding his intended claims against the Bank. Subsequently, Mr Wee provided various documents to Ms Teh for her review and further discussions were held. Mr Sim was present at these discussions between Mr Wee and Ms Teh on the occasions when they were held in the firm’s office.

[7] Suit 834 was commenced on 4 July 2001. On 20 July 2001, Mr Sim, acting on Ms Teh’s instructions, sent a letter to Mr Wee. This letter, which was written on the letterhead of the firm, is the Written Agreement that ETP wishes to enforce. I set out below the relevant portions of the letter:

[8] As the writ of summons had been issued, the first interim bill was sent out on 27 July 2001. On 20 August 2001, the firm sent Mr Wee a copy of the Bank’s Defence and asked him to arrange for payment of the first interim bill and also to return a duly signed copy of its letter dated 20 July 2001. On 28 August 2001, Mr Wee paid the first interim bill in full.

[9] On 14 September 2001, as Mr Wee had still not signed and returned the copy of the letter dated 20 July 2001, the firm sent him a written reminder to do so. That same afternoon, Mr Wee sent the firm a copy of its said letter bearing his signature under the statement “I accept and agree to the above”.

[10] On 10 October 2001, which was after the close of the pleadings, the second interim bill was sent to Mr Wee. He paid it in full on 28 November 2001. The third interim bill was sent out on 29 November 2001 and was paid by Mr Wee on 18 January 2002. The fourth interim bill was sent to him on 8 February 2002, after the exchange of the affidavits of evidence-in-chief in Suit 834. This was paid on 27 March 2002.

[11] The first four interim bills were issued on the letterhead of the firm. The fourth bill was dated 31 January 2002 but, when it was sent out to Mr Wee a few days later, it was forwarded under cover of a letter bearing the letterhead of ETP.

[12] Hearing of Suit 834 commenced on 26 February 2002. Mr Wee as the plaintiff in the action was the first witness and he was on the stand from 26 February 2002 up to 15 March 2002 when Suit 834 was adjourned part-heard. On 28 March 2002, two further bills (both dated 22 March 2002) were sent to Mr Wee. Both bills were printed on the letterhead of ETP. The first of these bills related to the work done after the exchange of the affidavits of evidence-in-chief up to 5 March 2002 being the sixth day of trial. In his affidavit, Mr Sim referred to this bill as the fifth interim bill. The second bill issued on 22 March 2002 pertained to the work done for the remaining eight days of trial including the time spent in court. Mr Sim referred to this as the sixth interim bill. Subsequent to the issue of these two bills, differences arose between the firm and Mr Wee. Mr Wee then refused to pay the two bills.

[13] After the foregoing account of the events that had occurred, Mr Sim’s affidavit went on to set out the details of the work that Ms Teh and other solicitors in the firm had done for Mr Wee in connection with Suit 834. The affidavit ended with Mr Sim stating that, in view of the work done, the terms of the Written Agreement were extremely favourable to Mr Wee and that there could be no doubt that it was in all respects fair and reasonable in the circumstances.

[14] Four affidavits were filed in response to the originating summons but I need only recount the contents of the two made by Mr Wee and his son, Mr Richard Wee.

[16] According to Mr Wee, he first met Ms Teh at her office some time in February 2001. He told her that he would like to engage her as his counsel in his action against the Bank. She would be assisted by his instructing solicitor, Mr Rey Foo Jong Han of M/s K S Chia Gurdeep & Param. Ms Teh quoted him the sum of $50,000 as her fees as counsel. Following this meeting, Mr Wee instructed Mr Foo to forward all the papers to Ms Teh for her perusal and for her to finalise the statement of claim. This was done on 22 February 2001.

[18] In about May 2001, Mr Rey Foo agreed to drop out of the case and, on 15 May 2001, Mr Wee informed Ms Teh of this. It was only then, that is from 15 May 2001, that Mr Sim came on board. Mr Wee asserted that Mr Sim was in no position to depose to matters in his affidavit that were crucial to the Oral Agreement when he was not present at the relevant meetings. Further, at no time during the meetings with Ms Teh were there any discussions that the trial be limited to six days so that the Oral Agreement would be subject to overruns at $12,000 a day excluding interlocutory applications. Mr Wee said that he would not have agreed to an open-ended contract as he wanted to know what his liabilities were vis-à-vis legal fees. He repeatedly made this point in his discussions with Ms Teh.

[19] When Mr Wee received the letter of 20 July 2001, he did not sign it. It clearly contained terms which were not agreed upon with Ms Teh and he took no action on it. Mr Wee then said that “the Plaintiff” did not raise the issue of the letter until their subsequent letter of 14 September 2001. Thereafter, some time in September 2001, whilst Mr Wee was having lunch with Mr Sim, the latter raised the subject of “the Plaintiff’s” letter of 20 July. Mr Wee reiterated that he would not sign the letter because it represented a departure from the Oral Agreement. Mr Sim then assured Mr Wee that the said letter was not intended to change the Oral Agreement and persuaded Mr Wee to sign it so that it would facilitate the settlement of interim bills to be issued by “the Plaintiff”. Mr Sim asked Mr Wee for his understanding and assistance upon the assurance that his agreement with Ms Teh would not be changed.

[22] Mr Richard Wee supported his father’s position. He stated that he was present when Ms Teh visited Mr Wee at the latter’s home to discuss the case. At the end of the meeting, Richard Wee asked Ms Teh if it was true that she was doing the case for $50,000. She confirmed that that figure had been mentioned but went on to say that this sum was just for her to act as counsel. She said that after having had time to go through all the documents, she was of the view that she required a legal assistant in her own firm to assist her in the preparation. She suggested that it would be cheaper if her firm was also engaged as instructing solicitors as she could then use her junior legal assistant to assist her.

[24] On 16 May 2003, ETP filed two affidavits in response to those submitted by Mr Wee. First, there was an affidavit from Ms Teh. Whilst taking the position that no evidence was admissible to prove an alleged oral agreement that would contradict the terms of the Written Agreement, she set out her account of what had transpired and her meetings with Mr Wee in order to refute his “obvious lies”. I will not reproduce the whole account here. The important points are:

(a) She denied she had told Mr Wee on 8 February 2001 that she would charge him $50,000.

(b) The first meeting at Mr Wee’s home took place in February 2001 and not early March 2001 and, as it was held to discuss a different case rather than the claim against the Bank, no quotation would have been given then for the intended claim against the Bank.

(c) At no time between February and May 2001 did she indicate that her costs would be $50,000 nor did she thereafter increase them to $100,000 then to $150,000 and then to a cap of not more than $200,000 for the whole case.

(d) She did not at any time inform Mr Wee that she would prefer it that he engaged the firm as instructing solicitors though she did say that she required Mr Sim to assist her on the file.

(e) In late May or early June 2001, she had a meeting with Mr Wee and Richard Wee in her office at which Mr Sim was present. It was at this meeting that she explained to Mr Wee the work that had already been done as well as the work that was anticipated and informed him again of her time costs as well as those of Mr Sim. It was at this meeting too that Ms Teh gave Mr Wee the $250,000 figure for six days of trial and $12,000 for each additional day of trial. Neither Mr Wee nor Richard Wee objected to this quotation.

(f) After Ms Teh had indicated the costs to Mr Wee, she asked him whether he wanted her to go ahead to start work on amending the draft statement of claim. Mr Wee specifically instructed her to proceed.

(g) There was never any agreement, oral or otherwise, for a cap of $200,000 and the first time that Mr Wee raised it was in August 2002 after the dispute in respect of legal costs had arisen.

[26] The matter came before me for hearing on 21 May 2003. Mr Lok, counsel for Mr Wee, asked for leave to file an affidavit in reply to the two affidavits on 16 May. Mr Wee wanted to say what had happened in the earlier meetings in more detail. Mr Harish Kumar, who appeared for ETP, objected on the basis that there had been an oral agreement that had subsequently been reduced to writing and Mr Wee now wanted to give further evidence of pre-contractual matters. Such matters were irrelevant to the issue. He considered that the matter could be decided on the affidavits as they then stood. Mr Lok then submitted that there were substantial disputes of fact and that the matter could not be decided summarily.

[27] I then made the following orders:

(a) no further affidavits were to be filed by anyone;

(b) all deponents were to be cross-examined on their affidavits;

(c) the matter was to be adjourned to open court for hearing and it was to be fixed for hearing for three days initially and thereafter, if any further days were required, the hearing fees were to be borne by the parties equally without prejudice to any costs order that may be made subsequently.

[28] On 28 May 2003, ETP wrote in for further arguments. Its main contention was that the matter could be disposed of summarily and there was no need for cross-examination. After considering the matters raised in its letter, I acceded to its request.

[30] At the third hearing which took place on 26 August 2003, I put the point to the parties and asked if they thought this was a material fact that might affect the outcome of the matter and on which they might wish to make submissions. After taking instructions, Mr Wee’s counsel indicated that he wished to make further submissions on the point. I gave directions for these submissions and they were filed in September. ETP then applied for leave to file a further affidavit from Ms Teh. I granted such leave and also gave Mr Wee leave to file an affidavit in reply.

[31] Ms Teh stated that as it was intended for the firm to be dissolved followed by the immediate incorporation of ETP thereafter, a letter dated 13 December 2001 on the firm’s letterhead setting this out was signed by her and sent to Mr Wee. The penultimate paragraph of this letter stated that as part of the transfer of the business of the firm to ETP all his matters, all documents and any moneys in the account with the firm would be transferred to ETP upon or shortly after the incorporation of ETP unless Mr Wee informed the firm of his objections to such transfer within 14 days of receipt of the letter.

[32] The letter was sent to Mr Wee both by fax and by ordinary post. ETP’s records contained a fax transmission report in respect of that letter. That report indicated that the letter was successfully transmitted to Mr Wee’s then fax number of 358 2822 on 14 December 2001 at about 9.16am.

[33] ETP’s records also showed that subsequent to the transfer of Mr Wee’s file from the firm to ETP, four cheques were issued by Mr Wee that were made in favour of ETP. The particulars of the four cheques were as follows:

(a) a cheque dated 18 February 2002 for the sum of $5,000 being payment of a deposit to ETP for anticipated disbursements;

(b) a cheque dated 5 March 2002 for the sum of $9,340.35 being costs due to Drew & Napier;

(c) a cheque dated 26 March 2002 for the sum of $5,391 being payment of fees payable to the mechanical recording unit of the Supreme Court; and

(d) a cheque dated 26 March 2002 for the sum of $87,000 being payment of the hearing fees for Suit 834.

Ms Teh asserted that the facts in her affidavit showed beyond a shadow of a doubt that Mr Wee had known all along that his business and account with the firm had been transferred to ETP upon ETP’s incorporation.

[35] Mr Wee confirmed that he did not recall having received the letter and did not have a copy of it on file. He pointed out that the letter did not accurately communicate some basic facts in that the date of commencement of operation of ETP was inaccurate and the information given on the associate directors of ETP was not correct.

[36] Mr Wee also averred that it was clear from Ms Teh’s affidavit that:

(a) there was no agreement entered into between the firm, ETP and himself to assign or novate the agreement on costs to ETP and ETP had not been able to produce any such document; and

(b) the notice required to be given by ETP (not by the firm) under r 6 of the Legal Profession (Law Corporation) Rules (Cap 161, R 21, 2002 Rev Ed) (“the Rules”) was not given.

[37] As regards the four cheques which he had issued after the incorporation of ETP, Mr Wee’s position was that this showed that the firm and ETP in fact intended to ensure that separate accounts were kept. These four cheque payments were made in respect of disbursements. As ETP was his solicitor by the time the cheques were issued, there was no issue with ETP being kept in funds for disbursements incurred. What was significant was that he had made a payment in favour of “Engelin Teh & Partners” on 25 March 2002. This payment was in the sum of $63,537.60 and was in respect of professional fees and, as far as these were concerned, the payment was made by him directly to the firm. Indeed, this payment had been duly acknowledged by the firm on 12 September 2002, more than seven months after the constitution of ETP. Mr Wee exhibited a copy of the receipt.

[38] I note here that the cheque dated 25 March 2002 made in favour of the firm by Mr Wee was referred to in Mr Sim’s first affidavit when he acknowledged that Mr Wee had made full payment of the fourth interim bill issued in accordance with the Written Agreement. Looking at this fourth interim bill, a copy of which is exhibited in that affidavit, I note that it was issued on the letterhead of the firm and dated 31 January 2002 (ie before the incorporation of ETP). The bill covered work done from 3 November 2001 to 8 January 2002 and was for a total of $53,011.42 comprising the “agreed” amount of $50,000, disbursements incurred and goods and services tax. On the same day, a further bill on the letterhead of the firm, invoice no EP020174, was issued. This was for $10,526.19 covering legal fees etc for work done in interlocutory applications. Mr Wee’s payment of $63,537.60 covered both this bill and the fourth interim bill.

[42] The basis of that argument was that s 2 of the Act defines the terms “advocate and solicitor”, “advocate” and “solicitor” to mean “an advocate and solicitor of the Supreme Court”. Thus, the reference to “solicitor” in s 111(1) must necessarily refer to a natural person and not to a partnership of solicitors since a partnership cannot possibly be “an advocate and solicitor of the Supreme Court”. Where it was considered necessary that the term “solicitor” should also mean a firm of solicitors ie with respect to the rules set out in the Legal Profession (Solicitors’ Accounts) Rules (Cap 161, R 8, 1999 Rev Ed), a specific rule was included stating that for the purpose of those Rules, the term “solicitor” included a firm of solicitors.

[43] At the time the Written Agreement was concluded, ETP did not exist. Thus, it could not have made any contract and it was Ms Teh who was the solicitor who entered into the Written Agreement with Mr Wee. Further, Mr Wee had wanted Ms Teh who is a senior counsel to represent him in his claim against the Bank. In these circumstances, there could be no doubt that the Written Agreement was between Ms Teh and Mr Wee.

[44] Thus, when the partnership was dissolved, the Written Agreement was not affected at all and remained a contract which bound Mr Wee and Ms Teh. When ETP was incorporated on 1 February 2002 and Ms Teh continued to practise as an advocate and solicitor under the aegis of ETP, the Written Agreement similarly remained unaffected. There was therefore no issue of novation of the Written Agreement from the firm to ETP since the parties to it were not Mr Wee and the firm but rather Mr Wee and Ms Teh.

[45] Having put forward the proposition that Ms Teh (and not the firm) was the party who had contracted with Mr Wee, ETP then had to justify its initiation of the current proceedings to enforce the Written Agreement. It did so by relying on s 113(2) of the Act. The relevant portions of this section for this purpose are:

[46] ETP contended that by this wording, s 113(2) clearly contemplates that the Written Agreement may be enforced by summons by other persons apart from the actual parties to the agreement namely:

(a) any person being or alleged to be liable to pay the costs, fees, charges or disbursements in respect of which the agreement was made; or

(b) any person being or claiming to be entitled to be paid such fees etc.

ETP further submitted that it was an implied term of the Written Agreement that the entity under which Ms Teh practised (be it sole proprietorship, partnership or law corporation) was the party that was entitled to be paid the costs etc in respect of which the Written Agreement was made. As such when she was practising in partnership in the firm, it was the firm that could render bills to Mr Wee. The reason for such implication was that Ms Teh was not able to hold clients’ money in her own name nor open a client’s account in her own name and the only entity that could deal with the client’s money, by operating a client’s account, was the entity under which Ms Teh practised. Accordingly it was an implied term of the Written Agreement that all bills rendered pursuant to it would be rendered by the entity under which Ms Teh practised, namely, either the firm or ETP. Now that ETP has been formed and Ms Teh is providing legal services as a director of ETP, ETP is the appropriate entity to render bills to Mr Wee. For these bills it would be ETP that would be the party “entitled to be paid the costs, fees, charges or disbursements in respect of which the agreement is made”. ETP was therefore the appropriate party to enforce the Written Agreement and had been properly named as plaintiff in this originating summons.

[51] Leaving aside for the time being the question of whether there was an Oral Agreement as propounded by Mr Wee, the first issue to be determined is whether the Written Agreement was made between Mr Wee and Ms Teh or between Mr Wee and the firm.

[52] When the facts are scrutinised, it seems clear that the intention both on the part of Mr Wee and on the part of the firm was that the Written Agreement was to be a contract between Mr Wee and all those solicitors who practised in partnership under the firm name of Engelin Teh & Partners. Whilst Ms Teh was the partner in charge of the business and the person whom Mr Wee wanted to act as his counsel, at all times she dealt with him as a partner of the firm. She did not deal with him only on her own behalf. All correspondence was sent out on the letterhead of the firm. The Written Agreement itself was on the letterhead of the firm and it was not signed by Ms Teh but by Mr Sim who was an employee of the firm and not an employee solely of Ms Teh. In signing the letter, he was acting as an agent of the firm and not as an agent of Ms Teh. The first four interim bills were issued by the firm, not by Ms Teh. At all times the intention of the Written Agreement was that the firm would be Mr Wee’s solicitors in Suit 834 and that while the actual solicitors handling the matter would be Ms Teh as leading counsel and Mr Sim as assistant counsel, other necessary work related to it would be handled by the staff of the firm. This intention was carried into effect as is clear from the description in Mr Sim’s affidavits of the work that was done in respect of Suit 834. Further, all court documents filed on behalf of Mr Wee in relation to Suit 834 bore the name of the firm, not the name of Ms Teh alone, as his solicitors. Finally, after ETP was incorporated, all bills sent out were on the letterhead of ETP and were not in the name of Ms Teh. Had the intention been that the Written Agreement was to take effect between Mr Wee and Ms Teh, then once it was no longer possible to send out bills in the name of a partnership in which she was a partner, further bills should have been sent out in her own name instead of in the name of ETP which, indubitably, is a separate legal entity from Ms Teh.

[55] To say that advocates and solicitors of the Supreme Court have been practising in partnership with each other since the reception of English law (including the law of partnership) into the Colony of Singapore may be an exaggeration but, if so, it would only be a slight one. Partnership firms like Donaldson & Burkinshaw, Drew & Napier, Allen & Gledhill and Rodyk & Davidson were all in existence prior to 1900. This legal practice environment was the context in which the Act and all preceding legislation were enacted including Ordinance XXX of 1907, the Courts Ordinance.

All references there are to “a solicitor” and the pronouns used are “he”, “him” and “his” not “they”, “them” and “their”.

[58] I was not cited nor have I been able to find any authority which states directly that the “solicitor” referred to in s 111(1) has to be one person or, on the other hand, that the word “solicitor” incorporates the plural form. There is, however, an English case which has been of some assistance in this interpretation exercise. In Chamberlain v Boodle & King (a firm) [1982] 3 All ER 188, the issue was whether there was a contentious business agreement between the plaintiff, Mr Chamberlain, and the defendant solicitors M/s Boodle & King, such as to satisfy s 59 of the English Solicitors Act 1974 (“the 1974 Act”). As far as it is relevant, s 59 reads:

Mr Chamberlain was an American who was in litigation with certain persons both in the United States of America and Britain. Mr Chamberlain instructed the firm of M/s Boodle & King in regard to the English proceedings. In particular, he instructed Mr Joseph Jaworski, an employee of M/s Boodle & King. There were two letters that were said by the solicitors to amount to a contentious business agreement. The first was dated 4 January 1979 and it was from M/s Boodle & King to Mr Chamberlain. In part it read:

The second letter was Mr Chamberlain’s reply of 24 January 1979. Subsequently, the solicitors sent three bills to Mr Chamberlain totalling some £30,000 and, being dissatisfied with them, he applied for taxation by way of originating summons. In answer to the application, the solicitors set up the two letters as constituting an agreement in writing for costs in respect of contentious business falling within s 59 of the 1974 Act. The Master found that a contentious business agreement existed between the parties and gave the solicitors liberty to enter judgment for the amount of their bills. Mr Chamberlain appealed. His position that there was no valid agreement was accepted by the judge who made an order for taxation of the bills. The solicitors then appealed to the Court of Appeal.

[61] The second issue is whether the Written Agreement can be enforced by ETP. ETP has not argued that the Written Agreement was assigned to it by the partners of the firm or that there was a novation of the contract between the partners, itself and Mr Wee so as to enable it to enforce the contract on its own behalf. Instead, it sought to argue that it was entitled to enforce the contract as Ms Teh’s representative. Even if I had found the contract to be between Ms Teh and Mr Wee, I would not have accepted that ETP was her representative. The two are separate legal persons and ETP is not her trustee in bankruptcy or the administrator or executor of her estate. As such it cannot be her representative for the purposes of s 111. Neither can it be the representative of the firm. Either the former partners of the firm acting together, or its receiver, if any, could, I suppose, represent it for the purposes of enforcing the contract since the firm has now been dissolved. In any event, ETP has not submitted that it represents the firm for this purpose. It follows that ETP had no legal right to initiate the summons.

[63] My view therefore is that in respect of work done under the Written Agreement prior to 1 February 2002, the firm or its representatives would be entitled to apply for enforcement by the court under s 114 to the extent that the agreement had not been complied with, in which case the court may possibly order taxation since the firm had not completed all the work contemplated by the agreement. As far as work done after 1 February 2002 is concerned, this work was done by ETP and ETP would be the party who would have to bill Mr Wee and take action if necessary to enforce payment. I suppose that if there were to be a taxation in respect of the work done by ETP, it would be entitled to ask the taxing master to have some regard to the Written Agreement in considering a reasonable fee for the work done, though of course the Written Agreement is not binding on the taxing master in relation to work done by ETP. I should also state here that in view of the way in which the matter has turned out I do not feel it necessary to express any views on whether the Written Agreement is fair and reasonable.