Case Summaries

LVM Law Chambers LLC v Wan Hoe Keet and another and another matter [2020] SGCA 29

 

SUPREME COURT OF SINGAPORE

3 April 2020

Case summary

Civil Appeal No 102 of 2019 and Summons No 119 of 2019

LVM Law Chambers LLC v Wan Hoe Keet and another and another matter [2020] SGCA 29

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Decision of the Court of Appeal (delivered by Judge of Appeal Justice Andrew Phang Boon Leong):

Outcome: Court of Appeal allows the appeal in part setting aside the injunction granted by the High Court prohibiting the appellant from acting on behalf of the plaintiff in Suit No 806 of 2018 (“Suit 806/2018”) while imposing the condition that the appellant refrain from disclosing the terms of the settlement agreement reached in Suit No 315 of 2016 (“Suit 315/2016”) save as required or permitted by law.

Background facts

1 The respondents brought an application in Originating Summons No 13 of 2019 for an injunction to restrain the appellant law firm from acting in Suit No 806 of 2018, which was a suit brought against them for their alleged roles in a Ponzi scheme known as “SureWin4U”.

2 The injunction was sought on the grounds that the appellant owed the respondents an obligation of confidence by virtue of having participated in settlement negotiations in Suit No 315 of 2016, which was a similar suit brought against the respondents for their alleged roles in “SureWin4U” and where the appellant acted for the plaintiff. Suit 315/2016 was settled on the first day of trial following negotiations conducted by the parties’ solicitors outside of court with a settlement agreement signed later that day (“the Settlement Agreement”). The Settlement Agreement, to which the appellant was not expressly made a party, included a confidentiality clause.

3 The Judge granted the respondents the sought for injunction. The Judge found that apart from the amount and terms of a settlement, the nature and process by which a settlement sum was reached would also be important and confidential. It did not matter that there was no explicit imposition of an obligation of confidence on the appellant by the Settlement Agreement. There was a sufficient threat of misuse of confidential information such as to justify the grant of an injunction as the respondents would be disadvantaged by knowledge gained by the appellant from its participation in the Suit 315/2016 settlement negotiations.

4 The appellant appealed against the Judge’s decision.

The Court of Appeal’s decision

The applicable legal principles

5 The following requirements would have to be met before a court would restrain a lawyer and/or law firm from acting against the same counterparty in a previous set of proceedings resolved by means of a settlement or mediation: (a) the information concerned must have the necessary quality of confidence about it; (b) that information must have been received by the lawyer and/or law firm concerned in circumstances importing an obligation of confidence; and (c) there is a real and sensible possibility of the information being misused: at [15].

6 In respect of requirement (a), information which is common or public knowledge would not give rise to a duty of confidence: at [16].

7 The requirement in (b) would depend on the precise facts and circumstances of the previous proceedings. As lawyers owe their clients a duty of confidence in respect of any information acquired in the course of their work, where the client is itself bound by a confidentiality obligation under a settlement agreement from prior proceedings, any information obtained by the lawyer falling within the terms of the confidentiality agreement would be impressed with an obligation of confidence. In such situations, the lawyer cannot even request that the client grant permission to use that information as the client cannot do so without being in breach of its confidentiality obligations: at [17].

8 This would not mean that the terms of a settlement agreement would be dispositive of the ambit of the confidentiality obligation. There might be cases where it might be inferred from the surrounding context that information outside the terms of the settlement agreement is nevertheless subject to an obligation of confidence. This would depend on the precise nature and circumstances, and the party seeking relief cannot rest its case on mere assertions or vague generalisations: at [18].

9 As for the requirement in (c), there must be evidence that there is a real and sensible possibility of the information concerned being misused in the subsequent proceedings on an objective basis. It is insufficient for the appearance of risk of misuse to be “remote or merely fanciful”. The test may be satisfied in a wide range of situations. At one end would lie cases where the risk of misuse is obvious such as where there is clear evidence of an intention to use information contrary to the obligation of confidence. There might, however, be other instances where the test could be satisfied by circumstances falling short of this high threshold. Two non-exhaustive factors which ought to be taken into account are: (a) first, the similarity between the previous set of proceedings and the subsequent proceedings, such as by having similar issue and/or evidence. In this regard, a granular approach should be adopted in ascertaining whether there would be a real and sensible possibility of the information being misused; and (b) second, whether the client in the subsequent proceedings deliberately retained the lawyer due to his involvement in the previous set of proceedings: at [20]–[22].

10 The burden of proof would lie on the party seeking an injunction preventing the lawyer from acting for the other party: at [23].

The Court’s decision

11 The Court found that the appellant was bound to keep the terms of the Settlement Agreement confidential. Apart from this, however, the respondents failed to discharge their burden in proving that any other matters relating to the settlement negotiations in Suit 315/2016 as there were only vague references to negotiations and a certain degree of “to-ing and fro-ing”. Given this, the Court was of the view that the respondents had not demonstrated that there was any real and sensible possibility of confidential information being misused, and that it would be sufficient to allow the appeal while granting an order that the appellant refrain from disclosing the terms of the Settlement Agreement: at [29]–[31].

12 The Court also separately observed that it would make practical sense if counterparties to a settlement obtained a contractual undertaking of confidentiality from the lawyer and/or law firm concerned. This would obviate some of the difficulties which arose in the present case: at [32].

 

This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.

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