Public Trustee v By Products Traders: Solicitor's Duty to Court and Payment Out of Court

In Public Trustee and Another v By Products Traders Pte Ltd and Others, the High Court of Singapore addressed an application concerning the return of moneys paid out of court. The Public Trustee and Quraisj Wahidin initiated proceedings to sell estate properties, leading to disputes among claimants, including By Products Traders Pte Ltd, JAK Alhadad & Co Pte Ltd, Musa Said Wachdin, and Salim Hasan Wachdin. The court found that solicitors for JAK Alhadad & Co Pte Ltd had improperly obtained payment out of court without proper notice to all relevant parties. Rajah J. ordered the return of the funds and referred the solicitors involved to a disciplinary committee, emphasizing the paramount duty of solicitors to the court.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

First and second respondents’ application allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court addresses a solicitor's duty to the court and the propriety of payments out of court, ordering the return of improperly disbursed funds.

1.7 Decision Date

25 May 2005

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Public Trustee	Plaintiff, Respondent	Government Agency	Application allowed	Won	T P B Menon
By Products Traders Pte Ltd	Defendant, Applicant	Corporation	Application allowed	Won	Roland Tong
JAK Alhadad & Co Pte Ltd	Defendant	Corporation	Order to return moneys	Lost	Nor'ain Abu bte Bakar, Ruby Tan
Musa Said Wachdin	Defendant	Individual	Adjournment requested	Neutral	Peter Chua
Salim Hasan Wachdin	Defendant	Individual	Adjournment requested	Neutral	Peter Chua
Estate of Shaik Ahmad bin Abdullah Wahdain Basharahil (deceased)	Other	Trust	Neutral	Neutral	George Lim
Estate of Abdul Rahim Awad Wchdin (deceased)	Other	Trust	Payment of share of sale proceeds directed	Won	M N Swami
David Reginald Ellis Broadley	Defendant, Applicant	Individual	Application allowed	Won	Roland Tong

3. Judges

Judge Name	Title	Delivered Judgment
V K Rajah	J	Yes

4. Counsels

Counsel Name	Organization
T P B Menon	Wee Swee Teow and Co
Roland Tong	Wong Tan and Molly Lim LLC
Mohan Das Naidu	Mohan Das Naidu and Partners
Nor'ain Abu bte Bakar	Abu Bakar Tan Ibrahim and Partners
Ruby Tan	Abu Bakar Tan Ibrahim and Partners
Peter Chua	Peter Chua and Partners
George Lim	Wee Tay and Lim
M N Swami	Swami and Partners

4. Facts

Public Trustee was appointed trustee of Shaik Ahmad's will in 1976.
JAK claimed Musa and Salim warranted they held 100% beneficial interest in the Estate.
JAK purportedly entered into sale agreements with Musa and Salim for $12m.
JAK paid approximately $4.2m to Musa and Salim.
Lee JC ruled Musa and Salim were not acting for all beneficiaries.
Properties were sold, and proceeds paid into court.
JAK initiated suit against Musa and Salim for breach of agreement.
BP and Broadley sued JAK for refund of deposits.
JAK sought to garnish sales proceeds received by the Public Trustee.
AR Tung dismissed JAK's application to garnish sales proceeds.
BP and Broadley sought a court order for payment out of proceeds due to Musa and Salim.
Judith Prakash J directed the Public Trustee to notify BP and Broadley of any future application.
The Public Trustee sought a court order sanctioning an interim distribution of the net proceeds of sale.
Judith Prakash J ordered the distributive shares of the six beneficiaries be paid into court.
JAK's solicitors surreptitiously filed summons for payment out of court.
JAK's solicitors did not serve the application on BP and Broadley or the Public Trustee.
AR Ching acceded to the payment out of court of $4,270,000.
BP and Broadley discovered the payment out and applied for the return of the moneys.

5. Formal Citations

Public Trustee and Another v By Products Traders Pte Ltd and Others, OS 1030/2000, SIC 600797/2004, [2005] SGHC 103

6. Timeline

Date	Event
1953-07-15	Shaik Ahmad bin Abdullah Wahdain Basharahil passed away.
1976-10-11	Public Trustee appointed trustee of Shaik Ahmad's will.
2000-07-11	Originating Summons No 1030 of 2000 initiated.
2001-01-31	JAK conceded that most of the funds paid towards the purchase of the properties were provided by BP and Broadley.
2001-01-01	Originating Summons No 600626 of 2001 filed.
2002-07-05	Court decided Musa and Salim were not acting for all beneficiaries.
2002-07-30	Court determined there were 14 beneficiaries and empowered the Public Trustee to sell properties.
2002-12-13	JAK initiated Suit No 1497 of 2002 against Musa and Salim.
2003-01-14	JAK obtained judgment against Salim.
2003-03-10	JAK discontinued action against Musa.
2003-05-06	BP and Broadley sought a court order for the Public Trustee to pay them a sum of $3,622,000.
2003-05-07	BP and Broadley commenced Suit No 453 of 2003 against JAK.
2003-08-26	Judith Prakash J made no order on the application and directed the Public Trustee to notify BP and Broadley of any future application.
2003-10-01	JAK filed Summons in Chambers No 6556 of 2003 to garnish part of the sales proceeds.
2003-12-12	Assistant Registrar Amy Tung dismissed JAK’s application.
2004-04-01	JAK agreed to withdraw the appeal and the Public Trustee agreed to apply by summons in chambers to pay into court the amount of sale proceeds.
2004-05-19	Public Trustee emphasized that JAK had not established any claim to the estate.
2004-05-26	Parties reported that the Public Trustee could not finalize the accounts because of pending litigation against the Estate by JAK.
2004-07-12	The Public Trustee sought a court order sanctioning an interim distribution of the net proceeds of sale.
2004-07-23	Judith Prakash J ordered that the distributive shares of the six beneficiaries be paid into court.
2004-09-01	Nuh filed an application to be joined as a party to this OS and for payment to be made to her of the sale proceeds.
2004-09-08	JAK filed Summons in Chambers No 5008 of 2004 for the payment out of a sum of $4,270,000.
2004-09-13	Counsel for JAK and Salim appeared before Assistant Registrar Ching Sann for an urgent hearing of that application for payment out of court.
2004-11-26	Tan Lee Meng J ruled in BP’s and Broadley’s favour.
2004-11-29	Ms Nor’ain Abu Bakar opposed the application by Nuh to be joined in this OS.
2004-12-01	BP and Broadley applied for an order that the sum of $3,744,666.67 be immediately released to them.
2004-12-02	Ms Norain opposed the application by M/s Swami & Partners.
2005-01-20	The relevant parties appeared before Rajah J.
2005-01-24	Parties appeared before Rajah J for Ms Norain and Ms Tan to explain what had happened to the moneys their firm had received.
2005-05-26	Decision Date

7. Legal Issues

Solicitor's Duty to the Court
- Outcome: The court emphasized the paramount duty of solicitors to be candid and not mislead the court, referring the solicitors involved to a disciplinary committee.
- Category: Substantive
- Sub-Issues:
  - Misleading the court
  - Duty of candour
  - Conflict of interest
- Related Cases:
  - [1940] AC 282
  - [1969] 1 AC 191
  - 2004 SC 122
  - [2003] 4 All ER 590
  - [2003] 1 All ER 1
  - [2000] 1 All ER 457
  - [1951] 2 TLR 289
  - [1958] MLJ 129
  - (1889) 5 TLR 407
  - [2004] 2 SLR 264
Payment Out of Court
- Outcome: The court found that the payment out of court was improperly obtained due to a failure to notify all interested parties and a suppression of material facts.
- Category: Procedural
- Sub-Issues:
  - Improper notice
  - Competing claims
  - Failure to disclose material facts

8. Remedies Sought

Return of Moneys
Damages

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty

10. Practice Areas

Litigation
Professional Responsibility

11. Industries

Legal Services

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Re Will of Shaik Ahmad bin Abdullah Wahdain Basharahil	High Court	Yes	[2003] 1 SLR 433	Singapore	Cited for determining the 14 beneficiaries entitled to the assets of the Estate and that the six beneficiaries purportedly represented by Musa and Salim were entitled to only 43.7% of the Estate’s assets.
By Products Traders Pte Ltd v JAK Alhadad and Co Pte Ltd	High Court	Yes	[2004] SGHC 265	Singapore	Cited for the ruling that the sum of $3,425,000 was due to BP and Broadley from JAK.
Re Econ Corp Ltd (No 2)	High Court	Yes	[2004] 2 SLR 264	Singapore	Cited for observations on the obligations and responsibilities of officers of the court.
Myers v Elman	House of Lords	Yes	[1940] AC 282	England and Wales	Cited for the duty not to mislead the court.
Rondel v Worsley	House of Lords	Yes	[1969] 1 AC 191	England and Wales	Cited for the duty not to mislead the court and the responsibilities of an officer of the court.
McBrearty v HM Advocate	Court of Session	Yes	2004 SC 122	Scotland	Cited for the duty not to mislead the court.
Sharratt v London Central Bus Co Ltd	Court of Appeal	Yes	[2003] 4 All ER 590	England and Wales	Cited for the duty not to mislead the court.
Geveran Trading Co Ltd v Skjevesland	Court of Appeal	Yes	[2003] 1 All ER 1	England and Wales	Cited for the duty not to mislead the court.
Copeland v Smith	Court of Appeal	Yes	[2000] 1 All ER 457	England and Wales	Cited for the duty not to mislead the court.
Tombling v Universal Bulb Company, Limited	Court of Appeal	Yes	[1951] 2 TLR 289	England and Wales	Cited for the solicitor's entitlement to present his client’s cause in a manner which is most favourable or advantageous to the client without misleading the court.
Shaw & Shaw Ltd v Lim Hock Kim (No 2)	High Court	Yes	[1958] MLJ 129	Malaysia	Cited for the guiding principles laid down by Judges of great learning and wisdom on the dual duty of counsel to their clients and to the Court.
In re G Mayor Cooke	Queen's Bench Division	Yes	(1889) 5 TLR 407	England and Wales	Cited for the duty of a lawyer not to keep back from the Court any information which ought to be before it, and that he should in no way mislead the Court by stating facts which were untrue.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Legal Profession Act	Singapore
Legal Profession Act (Cap 161, 2001 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Solicitor's duty to court
Payment out of court
Duty of candour
Officer of the court
Misleading the court
Material facts
Competing claims
Beneficiaries
Trustee
Garnishee application
Default judgment
Suppression of facts

15.2 Keywords

solicitor
duty to court
payment out of court
misleading the court
legal profession
trust
beneficiaries

16. Subjects

Civil Procedure
Legal Ethics
Trusts

17. Areas of Law

Civil Procedure
Legal Profession
Trust Law