Top Ten Entertainment Pte Ltd v Law Society of Singapore

Belinda Ang Saw Ean J:

[2] On or about 7 May 2007, a Review Committee was formed to review the Complaint. The Review Committee recommended that the Complaint be referred to an Inquiry Committee to look into the merits of the Complaint pursuant to s 85(10) of the Legal Profession Act (Cap 161, 2001 Rev Ed) (“LPA”). Based on the terms of reference provided by the Review Committee, the Inquiry Committee was constituted to inquire into the Complaint on or about 7 January 2008. On or about 10 June 2008, the Inquiry Committee concluded its inquiry and rendered its findings in a written report to the Council of the Law Society. The Inquiry Committee recommended the Council of the Law Society to: (a) dismiss the Complaint lodged by the plaintiff as there was no merit to the Complaint; but (b) impose a fine of $500 on Mr Arul for breaching the Law Society’s practice directions in relation to Rule 7(1)(a)(iv) of the Legal Profession (Solicitors’ Accounts) Rules (Cap 161, R 5, 1999 Rev Ed) (the “Solicitors’ Accounts Rules”), which required a solicitor to give adequate notice to his client of any transfer of moneys from a client’s account.

[3] The findings of the Inquiry Committee were accepted and adopted by the Council of the Law Society. For the reasons stated in the Inquiry Committee’s report, the Council of the Law Society decided that a formal investigation by a Disciplinary Tribunal was unnecessary and dismissed the Complaint.

[4] On or about 11 August 2008, the plaintiff filed Originating Summons No 1048 of 2008/T (“OS 1048”) to seek judicial review of the decision of the Council of the Law Society to dismiss its Complaint against Mr Arul under s 96 of the LPA.

[5] At the conclusion of the adjourned hearing on 23 October 2009, the court:

(a) affirmed the Inquiry Committee’s finding that there was no agreement on fees between the plaintiff and Mr Arul;

(b) directed the Law Society to apply to the Chief Justice for the appointment of a Disciplinary Tribunal to look into two matters, namely, to investigate whether Mr Arul, as solicitor for the plaintiff, was in breach:

(i) of his professional duties by disobeying the plaintiff’s instructions contained in two e-mails dated 7 July 2006 and 24 August 2006 respectively, by placing a sum of $114,440.97 on 7 August 2006 into the client’s account with Messrs Arul Chew & Partners and also transferring moneys in payment of the solicitor’s fees.

(ii) of the Solicitors’ Accounts Rules by placing a sum of $10,000 which he received on 11 August 2006 into his firm’s office account instead of the client’s account with Messrs Arul Chew & Partners.

(c) ordered the Law Society to pay 50% of the plaintiff’s costs of the proceedings in OS 1048.

[8] The court’s power in judicial review proceedings brought under s 96(1) of the LPA is set out in s 96(4), which states as follow:

Notably, s 96(4) of the LPA expressly provides that the court has the discretion to make such an order for the payment of costs to achieve the ends of justice. The provision does not provide any special considerations that the court must take into account in making the cost order. Simply put, the language of s 96(4) is in plain and unfettered terms, and the power is exercisable against the Law Society if it is just to do so in the present circumstances.

I agree with Menon JC’s observation.

[17] In the present case, the Law Society did not, in my view, further the public interest by opposing or resisting a challenge of its decision. Whilst the Council of the Law Society in coming to its decision having considered the report of the Inquiry Committee was exercising a public function, as with most public functions, the decision is subject to review by the courts and this is expressly provided for under s 96 of the LPA. In proceedings brought under s 96 of the LPA, it would be in the public interest for the Law Society to lay before the court its full reasons for its decision. However, it does not follow that it would be in the public interest for the Law Society to strongly defend its decision in the face of any challenge, regardless of whether it was legitimate or reasonable for it to do so under s 96 of the LPA.

[20] Notably, the facts in OS 1048, where the Law Society here is defending its decision to dismiss the plaintiff’s Complaint, should be contrasted with the English position, where the Law Society of England and Wales is responsible for instituting proceedings against errant lawyers. For a better appreciation of the differences between the two regimes, it is necessary to understand the procedure for disciplinary proceedings in the UK which I summarise as follows.

[22] It is the practice of the Tribunal to decide if the allegations have been substantiated. At the conclusion of the hearing, the Tribunal's written order is made available as soon as is practicable (see Rule 16(5) of the UK Solicitors (Disciplinary Proceedings) Rules 2007). The Tribunal's decisions can be appealed to the Master of the Rolls or the High Court depending on the circumstances. Under s 49(4) of the Solicitors Act, the Master of the Rolls or the High Court (as the case may be) has the power to make such order on appeal as they may think fit.

[23] The Solicitors Regulation Authority initiates over 90% of the cases dealt with by the Tribunal. Whilst it is open to any person to make an application to the Tribunal directly, it is more common for a complainant to first approach the Legal Complaints Service for a matter to be investigated. Where an application is made directly to the Tribunal by a member of the public, the Tribunal may refer it to the appropriate body to conduct an investigation and/or pursue the complainant's original application on his behalf.

[26] In Baxendale-Walker v The Law Society [2006] 3 All ER 675, Moses LJ (sitting with Burnton J in the Divisional Court) held that where a regulator brings disciplinary proceedings in the public interest and in the exercise of a public function, which it is required to perform, it is different from private civil litigation as follows (at [43]):

[28] The Court of Appeal in Baxendale-Walker (CA) in dismissing the appeal held, in relation to the public function of the Law Society of England and Wales, that (at [34]):

[31] Furthermore, on the present facts, there would be no chilling effect against the Law Society in the exercise of its regulatory obligations, if any. This is because the Law Society may take a neutral position where its decisions are challenged under s 96 of the LPA.

[32] Section 96 of the LPA allows a complainant who is dissatisfied with the decision of the Council of the Law Society to apply to court to review that decision. As OS 1048 was the plaintiff’s application, I accept that the Law Society’s involvement as the defendant was unavoidable. That said, the Law Society, however, does not have a general duty or a specific statutory duty to resist or oppose every application that is made to the court under s 96 of the LPA. Section 38(1) of the LPA provides generally that the purpose of the Law Society is to maintain and improve the standards of conduct and learning of the legal profession in Singapore. Nothing in the LPA requires the Law Society to oppose every application that is made to court (under s 96) to review the decision of the Council of the Law Society.

[36] Menon JC in Re Shankar Alan distinguished Chew Kia Ngee on the ground that the case before him was unlike that in Chew Kia Ngee, where Thean J had made the finding that it was incumbent on the Singapore Society of Accountants to resist the application. In Re Shankar Alan, there was no duty or obligation imposed on the Law Society to oppose that application to quash the findings of the Disciplinary Committee so as to present the court with an alternative position (Re Shankar Alan at [10]). Menon JC drew a distinction between opposing an application and presenting the court with an alternative position in the following terms (Re Shankar Alan at [10]):

[38] Although the applicant in Re Shankar Alan applied for a quashing order pursuant to s 97(1) of the LPA, and the application on the facts here was made under s 96(1) of the LPA, a similar reading of s 96(1) of the LPA would lead one to the same conclusion that the Law Society did not have a statutory or any other obligation to resist or oppose the application under s 96(1) of the LPA. It will be apparent from the facts set out below that the Law Society here had strenuously resisted the plaintiff’s application in OS 1048 on the ground that it was baseless and unwarranted. Simply put, the Law Society here did not take a neutral position.

[39] The distinction between taking a neutral position and opposing an application as was drawn in Re Shankar Alan, is defensible in light of the government’s concern that there were doubts that the self-regulating bodies were willing to discipline their own members. In 1986, the Second Minister for Law (Prof S Jayakumar) (see Parliamentary Debates of 22 September 1986) proposed significant amendments to the provisions dealing with the disciplinary processes of the legal profession and stated that (at cols 672 and 673):

[40] Further, the Report of the Select Committee on the Legal Profession (Amendment) Bill No 20/ 86 (at pg A5) explained that the proposed amendments to the disciplinary process were due to a perception that the legal profession was not willing to take action against its errant members. Specifically, in relation to the Inquiry Committee, the Report of the Select Committee (at p A22) had this to say:

[42] A third ground for distinguishing Baxendale-Walker (CA) is the fact that in that case, the Tribunal, which is a separate entity from the Law Society of England and Wales, was tasked with making a decision. However, the Tribunal did not take part in the appeal to defend its own decision. On the other hand, the Singapore system does not have an independent tribunal separate from the Law Society. Instead, the Law Society constitutes Inquiry Committees, Review Committees and Disciplinary Committee to assist it in making a decision on the matter. In other words, the Law Society here did not participate in the hearing before the Judge in its capacity as a regulator of the legal profession, but rather, in its capacity as the maker of its decision to dismiss the plaintiff’s complaint and with a view to defending its own decision. In the circumstances, it would be difficult to contend that the Law Society was acting in the public interest as opposed to its own private interests. In Corner House Research (at [144]), Corner House Research had no private interest in the outcome of the case; in contrast, the Law Society’s strenuous defence of its decision has an element of self-interest.

[44] In the present case, the Law Society put up strenuous opposition to the plaintiff’s application to review its decision to dismiss the Complaint. The Law Society took the position that OS 1048 should be dismissed as Mr Bader’s affidavits filed in OS 1048 related to matters that were outside the scope of the Complaint as considered and deliberated by the Inquiry Committee. There were broadly three complaints before the Inquiry Committee (see also above at [1]). The first related to the alleged exorbitant fees charged by Mr Arul and the inquiry was on whether there was an agreement on Mr Arul’s professional fees in respect of MC Suit 18905 of 2005 and DC 903 of 2006. The Inquiry Committee considered and accepted Mr Arul’s explanation and held that there was no agreement on professional fees. I affirmed the Inquiry Committee’s decision on this point.

[45] The second complaint related to the allegation that Mr Arul had received strict instructions not to transfer any money from the client’s account but disobeyed those instructions by transferring the sums of $54,909 and $32,000 respectively from the client’s account to satisfy Mr Arul’s bills for professional services rendered which bills were being disputed at the time of the transfers. Mr Bajwa pointed out that the essence of the complaint was that Mr Arul had received moneys into client’s account contrary to clear instructions in Mr Bader’s e-mail dated 7 July 2006 directing the sum of $114,440.97 to be paid to the plaintiff. Ms Ambika Rajendram (“Ms Rajendram”), the director of Law Society’s Conduct Department, deposed in her affidavit filed on 27 March 2009 that Mr Bader’s allegation was not part of the Complaint that was lodged by the plaintiff with the Law Society and was never the subject of any inquiry undertaken by the Inquiry Committee.

[46] The e-mail dated 7 July 2006 from Mr Bader to Mr Arul reads as follows:

[47] Even though the 7 July 2006 e-mail was inadvertently not furnished to the Law Society, the 24 August 2006 e-mail was provided. The relevant portion of Mr Bader’s e-mail dated 24 August 2006 to Mr Arul reads as follows:

That said, Ms Rajendram went on to argue that the plaintiff’s allegation relating to the sum of $10,000 fell outside the scope of his Complaint.