Lie Hendri Rusli v Wong Tan and Molly Lim: Solicitor's Duty, Conflict of Interest, and Mortgage Advice
In 2004, Lie Hendri Rusli, an Indonesian businessman, sued Wong Tan and Molly Lim, a Singaporean law firm, in the High Court of Singapore, alleging negligence and conflict of interest in a mortgage transaction. Rusli claimed the firm failed to properly advise him on the implications of an 'all moneys clause' when he mortgaged his property to secure banking facilities for his supplier, Alps Group. Justice V K Rajah dismissed Rusli's claim, finding that the firm had adequately explained the mortgage documents and that Rusli understood the risks involved.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Claim dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Indonesian businessman Lie Hendri Rusli sues law firm Wong Tan and Molly Lim for negligence in a mortgage transaction. The court dismissed the claim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lie Hendri Rusli | Plaintiff | Individual | Claim dismissed | Lost | Andrew John Hanam, Lim Chong Boon |
| Wong Tan and Molly Lim (a firm) | Defendant | Partnership | Claim Dismissed | Won | Molly Lim Kheng Yan, Philip Ling Daw Hoang, Ambrose Chia Heng Guan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| V K Rajah | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Andrew John Hanam | PKWA Law Practice LLC |
| Lim Chong Boon | PKWA Law Practice LLC |
| Molly Lim Kheng Yan | Wong Tan and Molly Lim LLC |
| Philip Ling Daw Hoang | Wong Tan and Molly Lim LLC |
| Ambrose Chia Heng Guan | Wong Tan and Molly Lim LLC |
4. Facts
- Plaintiff mortgaged property to secure banking facilities extended to his supplier, Alps Group.
- Plaintiff was a director of PTB, an Indonesian distributor of electronic goods.
- PTB owed the Alps Group about $4.5m and faced cash flow problems.
- Plaintiff agreed to mortgage his property to MB for Alps' benefit to obtain a higher credit limit.
- Defendant acted for Alps, MB, and the plaintiff in the mortgage transaction.
- Plaintiff claimed the defendant failed to advise him on the consequences of signing the mortgage documents.
- MB commenced proceedings against the plaintiff to recover $12.86m.
5. Formal Citations
- Lie Hendri Rusli v Wong Tan and Molly Lim (a firm), Suit 721/2003, [2004] SGHC 213
6. Timeline
| Date | Event |
|---|---|
| PTB faced severe cash flow problems. | |
| Plaintiff agreed to mortgage property to Alps' financier. | |
| TYP received instructions from AK to act for Alps. | |
| Signing of mortgage papers at defendant’s office. | |
| MB requested a memorandum of understanding from the plaintiff. | |
| TYP responded to MB stating a memorandum of understanding was unnecessary. | |
| Alps confirmed in writing that the property would be released if PTB settled all debts. | |
| Plaintiff's solicitors sent MB a notice of redemption. | |
| MB's solicitors responded to the redemption notice stating the redemption amount was $16.9m. | |
| Plaintiff's solicitors responded by 'noting' the redemption amount and seeking confirmation. | |
| Plaintiff's solicitors proposed redeeming the property for $1.3m. | |
| Plaintiff's solicitors asked Alps Group to issue a cashier's order for $1.3m. | |
| MB commenced proceedings against the plaintiff and members of the Alps Group. | |
| Plaintiff commenced proceedings against the defendant. | |
| Decision Date |
7. Legal Issues
- Conflict of Interest
- Outcome: The court found that while the solicitor should have disclosed that he was acting for multiple parties, this oversight did not affect the outcome of the case.
- Category: Substantive
- Sub-Issues:
- Failure to disclose concurrent representation
- Acting for multiple parties
- Solicitor's Duty of Care
- Outcome: The court held that the solicitor had adequately explained the mortgage documents, including the 'all moneys clause', to the plaintiff.
- Category: Substantive
- Sub-Issues:
- Failure to advise on 'all moneys clause'
- Inadequate explanation of mortgage documents
- Negligence
- Outcome: The court found that the solicitor was not negligent in failing to keep contemporaneous notes or in failing to advise on the wisdom of the transaction.
- Category: Substantive
- Sub-Issues:
- Failure to keep contemporaneous notes
- Failure to advise on the wisdom of the transaction
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Negligence
- Breach of Fiduciary Duty
10. Practice Areas
- Professional Negligence
- Conveyancing
- Banking Law
- Commercial Litigation
11. Industries
- Legal
- Finance
- Electronics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Edward Wong Finance Co Ltd v Johnson Stokes and Master | N/A | Yes | [1984] AC 296 | N/A | Cited to establish that adopting the practice of the entire profession does not by itself exonerate a solicitor from the acid test of reasonableness measured by adequate competence and skill. |
| Clarke Boyce v Mouat | Privy Council | Yes | [1994] 1 AC 428 | N/A | Cited for the principle that a solicitor may act for both parties in a transaction where their interests may conflict, provided that he has obtained the informed consent of both to his acting. |
| Spector v Ageda | N/A | Yes | [1973] Ch 30 | N/A | Cited for the principle that in a conveyancing transaction where a solicitor acts for both parties, the solicitor has a double duty to perform and must safeguard the adverse interests of each of his clients. |
| Goh Jong Cheng v MB Melwani Pte Ltd | N/A | Yes | [1990] SLR 951 | Singapore | Cited for the principle that a solicitor must seek express consent, underpinned by full disclosure, from the parties involved and/or when there is a reasonable doubt, to at least ask the client to seek independent legal advice. |
| Wills v Wood | N/A | Yes | (1984) 3 Tr L 93 | N/A | Cited for the principle that if the terms of the loans are agreed by the clients without their advice and the solicitors are merely being asked to give legal effect to the parties’ common intention, there may well be no problem. |
| Carradine Properties Ltd v D J Freeman & Co | N/A | Yes | (1982) 126 SJ 157 | N/A | Cited for the principle that the precise scope of a solicitor's duty will depend inter alia upon the extent to which the client appears to need advice. |
| Moody v Cox | N/A | Yes | [1917] 2 Ch 71 | N/A | Cited in relation to solicitors not usually acting for both the vendor and purchaser in the same transaction. |
| Royal Bank of Scotland plc v Etridge (No 2) | N/A | Yes | [2002] 2 AC 773 | N/A | Cited in relation to family members being party to facility arrangements. |
| Standard Chartered Bank v Uniden Systems (S) Pte Ltd | N/A | Yes | [2003] 2 SLR 385 | Singapore | Cited in relation to family members being party to facility arrangements. |
| Yager v Fishman & Co | N/A | Yes | [1944] 1 All ER 552 | N/A | Cited for the principle that it is no part of a solicitor’s normal duty to profess the skill and experience for giving commercial advice. |
| Birmingham Midshires Morrgage Services Ltd v David Parry & Co | N/A | Yes | (1996) 51 Con LR 1 | N/A | Cited for the principle that a solicitor is not required to investigate the borrower’s financial position and is entitled to assume that the mortgagee has himself made such inquiries as he thinks necessary. |
| Briston and West Building Society v Mothew | N/A | Yes | [1998] Ch 1 | N/A | Cited for the principle that where a client sues his solicitor for having negligently failed to give him proper advice, he must show what advice should have been given and (on a balance of probabilities) that if such advice had been given he would not have entered into the relevant transaction or would not have entered into it on the terms he did. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Legal Profession (Professional Conduct) Rules 1998 | Singapore |
| Legal Profession Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- All moneys clause
- Mortgage
- Conveyancing
- Conflict of interest
- Solicitor's duty of care
- Banking facilities
- Letter of credit
- Personal liability
- Surety
- Redemption
15.2 Keywords
- mortgage
- solicitor
- negligence
- conflict of interest
- all moneys clause
- conveyancing
- Singapore
16. Subjects
- Legal Profession
- Banking
- Mortgages
- Conflict of Interest
- Professional Responsibility
17. Areas of Law
- Legal Profession
- Conflict of Interest
- Mortgages
- Conveyancing
- Professional Negligence