Law Society of Singapore's Application to Use Compensation Fund to Settle Loan: Trusts, Trustees, and Legal Profession Act
The Law Society of Singapore applied to the High Court of Singapore on 22 October 2001, seeking orders to utilize the Compensation Fund, administered under section 75 of the Legal Profession Act, to settle a loan for the Law Society Building. The court, presided over by Tay Yong Kwang JC, determined that section 75(9)(d) of the Legal Profession Act did not permit the proposed scheme but sanctioned the scheme under section 56 of the Trustee Act, subject to specific conditions to safeguard the Compensation Fund.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application allowed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Law Society sought to use the Compensation Fund to settle a loan. The court sanctioned the scheme under the Trustee Act, subject to conditions.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Law Society of Singapore | Applicant | Statutory Board | Application allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| N Sreenivasan | Derrick Ravi Partnership |
| Andrew Chan | Allen & Gledhill |
4. Facts
- The Law Society sought to use $3.75 million from the Compensation Fund to pay an outstanding loan.
- The loan was taken from OCBC Bank to purchase the Law Society Building.
- The Law Society proposed treating the withdrawal as a loan from the Compensation Fund.
- The Law Society would repay the Compensation Fund loan using Building Fund levies.
- The Solicitor General raised concerns about the legality of the scheme.
- The Ministry of Law had no objections to the proposal.
- The Compensation Fund had a balance of $5.7 million as of 30 June 2001.
5. Formal Citations
- Re Compensation Fund established under s 75 of the Legal Profession Act (Cap 161, 2000 Ed), OS 601132/2001, [2001] SGHC 320
6. Timeline
| Date | Event |
|---|---|
| Members of the Law Society gave the Council the mandate to locate and purchase suitable premises. | |
| A resolution was passed to approve the imposition of an annual building levy of $300 on each member. | |
| The Building Fund was established. | |
| OCBC Bank facility letter issued for the purchase of the Law Society Building. | |
| The Law Society purchased its building at 39/41 South Bridge Road. | |
| The Council deliberated on the proposal and decided to apply for the court's sanction for the scheme. | |
| 3,237 advocates and solicitors had taken out practising certificates for the practice year 1 April 2001 to 31 March 2002. | |
| The Law Society sent a copy of the originating summons to the Attorney General and to the Ministry of Law. | |
| The Solicitor General replied to the Law Society. | |
| The Ministry of Law wrote to the Law Society indicating no objections to the proposal. | |
| Judgment issued. | |
| First repayment of the loan from the Compensation Fund to be made. |
7. Legal Issues
- Interpretation of Section 75(9)(d) of the Legal Profession Act
- Outcome: The court held that section 75(9)(d) of the Legal Profession Act does not permit the Law Society to put the proposed scheme into effect.
- Category: Statutory
- Sub-Issues:
- Application of Compensation Fund monies
- Scope of permissible borrowings
- Application of Section 56 of the Trustees Act
- Outcome: The court sanctioned the proposed scheme pursuant to section 56 of the Trustees Act.
- Category: Statutory
- Sub-Issues:
- Definition of 'investment' or 'other transaction'
- Whether the proposed scheme is 'expedient'
- Related Cases:
- [2001] 1 SLR 256
- [1952] 85 CLR 202
8. Remedies Sought
- Declaration that the Law Society may apply monies in the Compensation Fund in accordance with the scheme.
- Order under section 56 of the Trustee Act conferring power on the Law Society to apply monies in the Compensation Fund in accordance with the scheme.
- Further or other orders as the Court deems fit.
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Trust Administration
- Commercial Law
11. Industries
- Legal
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Leo Teng Choy v Leo Teng Kit | Court of Appeal | Yes | [2001] 1 SLR 256 | Singapore | Cited for the interpretation of section 56 of the Trustee Act regarding the powers of the court. |
| Riddle v Riddle | High Court | Yes | [1952] 85 CLR 202 | Australia | Cited for the definition of 'expedient' in the context of trustee acts. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Legal Profession Act (Cap 161, 2000 Ed) | Singapore |
| s 75 Legal Profession Act (Cap 161, 2000 Ed) | Singapore |
| Trustees Act (Cap 337, 1999 Ed) | Singapore |
| s 56 Trustees Act (Cap 337, 1999 Ed) | Singapore |
| s 3 Trustees Act (Cap 337, 1999 Ed) | Singapore |
| s 4 Trustees Act (Cap 337, 1999 Ed) | Singapore |
| s 6 Trustees Act (Cap 337, 1999 Ed) | Singapore |
| s 9A(3)(b) Interpretation Act (Cap 1, 1999 Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Compensation Fund
- Law Society
- Trustees Act
- Legal Profession Act
- Building Fund
- Originating Summons
- Expedient
- Moneys borrowed
- Trustees
15.2 Keywords
- Compensation Fund
- Law Society
- Trustees Act
- Legal Profession Act
- Trusts
- Trustees
- Loan
- Investment
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Compensation Fund | 90 |
| Legal Profession | 80 |
| Trust Law | 75 |
| Banking Law | 25 |
| Administrative Law | 20 |
| Corporate Law | 15 |
| Company Law | 10 |
| Civil Procedure | 10 |
16. Subjects
- Trusts
- Trustees
- Law Society
- Compensation Fund
- Legal Profession