Case Update

Banking | Legal Profession

Banque Nationale de Paris v Credit Agricole Indosuez
[2000] 4 SLR 254
High Court — Originating Summons No 49 of 2000
Judith Prakash J
29 February, 13 March, 27 June 2000 

Letter of credit — Construction — Whether credit negotiable or deferred 

Woo Bih Li SC and Gan Kum Yuin (Bih Lih & Lee) for the plaintiff.
Toh Kian Seng and Priya Selvam (Rajah & Tann) for the defendant. 

On 21 March 1999, the Dubai branch of the defendant sent a telex to the plaintiff’s Singapore branch stating that the defendant had opened an irrevocable letter of credit for up to US$1,333,600 in favour of Amerorient Pte Ltd pursuant to instructions. On 26 March 1999, the plaintiff sent the defendant a letter stating that it had confirmed the credit. The plaintiff also gave particulars of the credit and stated that it was for US$1,333,600 which was ‘available by def payment’. On the same day, the plaintiff negotiated the letter of credit and paid Amerorient US$1,333,600. The documents that were called for under the letter of credit were contemporaneously forwarded by the plaintiff to the defendant. Subsequently, the defendant requested for copies of the bills of lading and other invoices from the plaintiff. On 25 May 1999, the defendant sent the plaintiff a telex stating that by reason of a serious suspicion of fraud they would not be able to effect payment under the letter of credit. The plaintiff replied stating that it had confirmed and negotiated documents in strict compliance with the credit terms and that the defendant was to effect payment according to their instructions. The defendant did not effect payment and the plaintiff commenced this action to enforce recovery. 

Held, allowing the plaintiffs’ claim:

A deferred payment letter of credit is one where the credit beneficiary receives payment only at the maturity of the credit. Thus, it was the obligation of the issuing bank and the confirming bank to pay the beneficiary upon maturity. On the other hand, a negotiable letter of credit entitled the negotiating bank to buy over or otherwise give value for the documents and drafts drawn by the beneficiary and present these under the credit in its own name to the issuing bank for payment at maturity. 

The proper construction of the credit in this case revealed that it was a negotiation credit. Looking at the document as a whole, it was clear that in order to obtain payment under the credit, drafts would have to be presented for payment to be made from the time those drafts had been negotiated. In any case, the defendant’s own conduct indicated that it either took the view that the credit was a negotiation credit or was content for the plaintiff to act according to such a notion without seeing the need to clarify the position with the plaintiff. Thus, the defendant was obliged to reimburse the plaintiff at maturity the amounts paid out by the plaintiff when it negotiated the credit.

Law Society of Singapore v Amdad Hussein Lawrence
[2000] 4 SLR 88
High Court — Originating Summons No 541 of 2000
Yong Pung How CJ, LP Thean and Chao Hick Tin JJA
28 July, 1 September 2000 

Show cause action — Respondent convicted of criminal offence under s 380 of Penal Code (Cap 224) — Appropriate penalty — Applicable principles 

Wong Siew Hong and Hemalatha d/o Silwaraju (Yeo Wong & Thian) for the applicant.
Respondent absent. 

The respondent was an advocate and solicitor of 15 years’ standing. At all material times, he was practising as the proprietor of Ng Thin Wah & Co. On 16 December 1998, the respondent was detained and arrested at Carrefour supermarket, Suntec City Mall, on suspicion of having committed theft amounting to $478.50. Sometime in 1999, one charge of committing theft in a dwelling place punishable under s 380 of the Penal Code (Cap 224) was brought against the respondent. The respondent pleaded guilty and was convicted accordingly. He was sentenced to two months’ imprisonment. The Law Society applied for and obtained an order under s 94A of the Legal Profession Act (Cap 161) (‘the LPA’) calling upon the respondent to show cause why he should not be dealt with under s 83 of the LPA. 

Held, ordering that the respondent be struck off the roll:

By virtue of s 83(6) of the LPA, the respondent’s conviction had to be accepted as final and conclusive. It was not open to the respondent or the court to go behind the conviction. In determining whether the conviction made a solicitor unfit for his profession, both the nature of the offence and the sentence imposed by the court had to be taken into consideration. The offence in question involved dishonesty, which was a constituent element of the charge under s 380 of the Penal Code. The sentence served as a good indication of the moral turpitude or obliquity involved. Cumulatively, they revealed the respondent’s lack of honesty and implied a defect of character which rendered him unfit for his profession. The fact that the offence was not committed in his capacity as a solicitor was wholly irrelevant and of no mitigating value. 

Where a solicitor had acted dishonestly, the court would almost invariably order that he be struck off the roll of solicitors. If he had not acted dishonestly, but was shown to have fallen below the required standards of integrity, probity and trustworthiness, he would nonetheless be struck off the roll, as opposed to being suspended, if his lapse was such as to indicate a lack of qualities necessary for a legal practitioner. 

When determining the appropriate order, the three-fold functions of disciplinary sentencing under s 83 of the LPA were to be borne in mind: (a) punishment of the errant solicitor for his misconduct; (b) deterrence against similar defaults by other like-minded solicitors in the future; (c) protection of public confidence in the administration of justice. The paramount considerations were the protection of the public and the preservation of the good name of the profession. 

Considerations which ordinarily weighed in mitigation of punishment had less effect on the exercise of the disciplinary jurisdiction than sentences imposed in criminal cases. The plea that the respondent was under stress and medication at the time of the offence were of negligible mitigating weight. The fact that the respondent was an advocate and solicitor of 15 years’ standing was devoid of any mitigating weight. On the contrary, the more senior the solicitor, the more damage is done to the integrity of the legal profession as a consequence of his misconduct.