$1.8m given by clients to lawyers 'not a gift'

Two lawyers have been referred to the Court of Three Judges for professional misconduct after a tribunal ruled that some $1.8 million entrusted to them by a client was not a gift as claimed.

The probe, presided by retired judge G.P. Selvam, found that lawyer Manjit Singh had advised the client Bernadette Rankine in 2010 to issue two cheques. One was to his wife for $1.6 million and the other to lawyer Sree Govind Menon's wife for $200,000.

The transfers were meant for safe keeping when Ms Rankine was involved in a litigation issue and for future legal fees. But the money was not returned to her on demand.

The tribunal also found that Mr Singh, who has been a lawyer for 37 years, had in 2009 misused $20,000 obtained from Ms Rankine for a legal matter related to her by using it to pay for an unconnected case.

This was uncovered during the tribunal's investigations into the $1.8 million.

"The sum of $20,000 may have been eventually returned to Ms Rankine but this does not blot out the misuse of funds in September 2009," said the tribunal in its 78-page report released yesterday.

In November 2010, Ms Rankine e-mailed to ask for the $1.8 million back from the pair. A month later, she complained to the Law Society.

The lawyers, who worked in the same firm in which Mr Menon, a lawyer of 16 years' standing, was a partner, sued her on the statements she made to the Law Society as part of her complaint. This dragged on until 2012 when a settlement was reached.

As part of the deal, Ms Rankine agreed to withdraw her original complaint.

But when she testified before the tribunal last year, she said she stood by what she stated in her affidavit.

Both lawyers argued that she had wanted to settle just as she was due to testify before the tribunal as she knew she had made a false statutory declaration to support her complaint to the Law Society.

They claimed the money was to reward those involved in the sale of a property in Joan Road which she owned and was sold for about $6.9 million.

They also insisted that she did not withdraw her 2012 letter, and would have accepted if the Law Society had acted on it and closed the case.

The tribunal said it was not convinced of the lawyers' arguments based on the "totality of the evidence". The belated return of the money to her and demand that she withdraw the complaint suggested their insistence that the money was a gift could not be believed.

The tribunal made it clear that the $1.8 million did not qualify as a gift as both lawyers did not observe professional conduct rules which required them not to act in the matter of the gift and to tell Ms Rankine to seek independent advice.

"A fiduciary duty is the highest duty known to the law in that the fiduciary must subordinate his personal interests to those of the client," the tribunal said. "The (lawyers) flagrantly and wilfully transgressed the rule."

The two-man tribunal, which included Mr Tan Chuan Thye, also deplored the "quite appalling" manner in which both conducted their defence, and cited, among other things, "quite extraordinary" remarks directed at the tribunal.

This article was published on May 7 in The Straits Times.

Get a copy of The Straits Times or go to straitstimes.com for more stories.