Law firm ordered to pay 2 brothers $1.4m

This follows their appeal against a nominal award of $1,000 in a court suit

A law firm ordered to pay S$1,000 to two brothers in a negligence case must now cough up US$1 million (S$1.4 million) after they appealed against the nominal award.

Messrs Adrian and Francis Anwar had sued Ng Chong & Hue and lawyer Ng Soon Kai for failing to advise them in relation to guarantee documents that they signed to help their father secure a credit deal, by putting four properties in their names and their companies as collateral.

Their father Agus Anwar had asked Mr Ng to assist him when the stock markets crashed in July 2008 and his collateral ended for a credit facility with the Singapore branch of Societe Generale Bank & Trust.

He told the bank's lawyers from Allen & Gledhill that in an effort to meet the shortfall, he would provide further collateral in the form of mortgages for four Singapore properties - but on condition that his sons would not have to provide personal guarantees. At the time, Adrian, 28, was working while Francis, 25, was studying in the United States.

Mr Ng failed to spot the personal guarantee clause in security documents covering the mortgage of the properties, and to advise them of the clause's existence and implications before they signed the documents.

As a result, when the bank sued Mr Anwar in 2009 for failing to meet his obligations under the credit facility, it also had a claim against his sons under the personal guarantee clause.

In the course of the proceedings, Mr Ng had discharged himself in acting for the brothers, who then hired someone else.

The brothers later settled the claim for US$1 million by 2013 with the help of their father and a friend of his.

They then sued the law firm and Mr Ng to recover the money and legal expenses.

They initially lost in the High Court but won an appeal in the apex court, which reverted the case to the High Court to assess damages payable.

Unhappy with the High Court assessment of awarding nominal damages of $1,000 last year, they pursued the case further in May before the Court of Appeal.

The court, in judgment grounds released last week, noted that the brothers had difficulty in settling the US$1million with the bank.

However, it rejected the view that just because others helped to make the payment, it did not preclude them from claiming the losses.

Senior Counsel Tan Cheng Han and lawyer P. Balachandran argued that the settlement with the bank was reasonable but Senior Counsel Michael Khoo and lawyer Josephine Low countered that the defendants did not have the chance to take part in the settlement talks and would have advised them against settlement as they had a "reasonably good defence "against the bank.

The appeal court - comprising Judges of Appeal Chao Hick Tin, Andrew Phang and Justice Judith Prakash - ruled that "the inquiry into the reasonableness of the settlement should be kept flexible to account for a myriad of possible scenarios in the negotiation process".

It added: "In the final analyis , the precise facts and context are of the first importance."

The court found the deal between the brothers and the bank was reasonable, reflecting the "proper measure of loss" and ordered the defendants to pay them US$1 million.

The US$1 million, together with the $325,287 in legal fees previously awarded in working to the settlement, means a total sum of about $1.8million for the siblings.Further appeal costs will be heard in due course.

Mr Agus Anwar is an Indonesian-born former bank owner and businessman who was made a bankrupt by the High Court in March 2011.

A version of this article appeared in the print edition of The Straits Times on October 05, 2015, with the headline 'Law firm ordered to pay 2 brothers $1.4m'. Print Edition | Subscribe