Case Details
- Citation: [2012] SGHC 174
- Case Title: Lee Chang-Rung and others v Leonard Loo LLP and another
- Court: High Court of the Republic of Singapore
- Date of Decision: 29 August 2012
- Case Number: Suit No 259 of 2011
- Judge: Tan Lee Meng J
- Coram: Tan Lee Meng J
- Plaintiffs/Applicants: Lee Chang-Rung and others
- Defendants/Respondents: Leonard Loo LLP and another
- First Defendant: Leonard Loo LLP
- Second Defendant: Mr Loo Peng Chee Leonard (managing partner)
- Counsel for Plaintiffs: Tan Hee Joek and Tan Hee Liang (Tan See Swan & Co)
- Counsel for Defendants: Chandra Mohan s/o Rethnam and Mabelle Tay Jia Hui (Rajah & Tann LLP)
- Legal Areas: Tort – Negligence; Contract – Breach; Causation
- Statutes Referenced: Financial Advisors Act
- Cases Cited: [2012] SGHC 174 (as per metadata); also relied on principles from: Tan Juay Pah v Kimly Construction Pte Ltd and others [2012] 2 SLR 549; Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart [2012] 1 SLR 847; Bansal Hemant Govindprasad v Central Bank of India [2003] 2 SLR(R) 33; Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani [2008] 4 SLR(R) 657
- Judgment Length: 20 pages, 9,393 words
Summary
This High Court decision concerns a professional negligence and breach of contract claim brought by investors against their former solicitors. The plaintiffs’ underlying dispute was against Standard Chartered Bank (“SCB”) arising from alleged misrepresentations in relation to a structured product linked to Lehman Brothers. In the SCB action (Suit No 212 of 2009), the plaintiffs’ claim was struck out after they failed to comply with discovery orders and an Unless Order. After losing on appeal, the plaintiffs sued their solicitors (Leonard Loo LLP and its managing partner) alleging that the solicitors’ handling of the litigation caused them to lose a “chance” of succeeding in Suit 212.
At trial, summary judgment had already been entered against the defendants for Parts A, B and D of the plaintiffs’ Statement of Claim. The remaining issue was Part C, which primarily concerned damages for loss of a chance. After the plaintiffs closed their case, the defendants made a submission of no case to answer. The court applied established principles governing such submissions and held that the plaintiffs failed to establish a prima facie case in law (or, alternatively, failed to discharge their burden on causation and proof of loss of chance). The claim for damages for loss of a chance therefore did not proceed.
What Were the Facts of This Case?
The plaintiffs, Lee Chang-Rung and three other relatives, were residents of Taiwan. Although they described themselves as “inexperienced investors” who primarily parked funds in fixed deposits, the evidence showed they had substantial experience with financial products. Between 2002 and May 2008, they invested through DBS Bank Ltd (“DBS”), American Express Bank (“AEB”), and later Standard Chartered Bank (“SCB”). Their relationship manager was Ms Daphne Lau, who moved from DBS to AEB in September 2005 and then, when AEB became a wholly owned subsidiary of SCB in February 2008, continued as their relationship manager at SCB.
In May 2008, Ms Lau arranged for the plaintiffs to purchase a structured product from SCB (the “Lehman product”), issued and guaranteed by Lehman Brothers. When Lehman collapsed, the plaintiffs lost approximately US$700,000. They sued SCB alleging that Ms Lau had induced them to invest by making false representations about the product. SCB denied the allegations.
In the course of the SCB litigation (Suit 212 of 2009), SCB sought discovery of documents relating to the plaintiffs’ investment experience. SCB’s solicitors wrote to Leonard Loo LLP on 18 August 2009 requesting the “investment documents”. Leonard Loo LLP responded that SCB was “fishing for evidence”. SCB then applied for specific discovery. On 23 October 2009, the Assistant Registrar ordered the plaintiffs to give discovery of documents relating to each plaintiff’s investment experience, including correspondence, application forms, term sheets, prospectuses, pricing statements, brochures, statements of accounts, confirmation notes and confirmation advice relating to structured products purchased between October 2002 and March 2008 from any bank or financial institution.
The discovery order required compliance by 13 November 2009. The plaintiffs failed to furnish the required documents. On 30 November 2009, the Assistant Registrar granted an Unless Order requiring compliance by 7 December 2009, failing which Suit 212 would be struck out. In an affidavit dated 7 December 2009, the plaintiffs disclosed that they had invested in particular “Surf Deposit” tranches and asserted that they had not invested in structured products with any other bank or financial institution during the relevant period. They then disclosed only four documents. Leonard Loo LLP confirmed to SCB on 17 December 2009 that the disclosed documents were all relevant documents in the plaintiffs’ possession.
However, SCB’s relationship manager, Ms Lau, knew that the disclosed documents were incomplete. Following SCB’s application, DBS was ordered to disclose documents relating to the plaintiffs’ investment experience with DBS. DBS furnished the “DBS documents” to SCB’s solicitors in February 2010. It became apparent that the plaintiffs had not disclosed many other documents relating to their investments in DBS. SCB then applied to strike out the plaintiffs’ action on the basis of non-compliance with the discovery order and Unless Order and alleged wilful withholding of documents. On 16 March 2010, Suit 212 was struck out. The plaintiffs’ appeal was dismissed by Tay Yong Kwang J, and their further appeal to the Court of Appeal was also dismissed.
After Suit 212 was struck out, the plaintiffs instructed another firm, JLC Advisors LLP, to take over conduct of the suit. Subsequently, they commenced the present action against their former solicitors, alleging negligence and breach of contract in the handling of Suit 212 and claiming damages for loss of a chance of succeeding in Suit 212.
What Were the Key Legal Issues?
The central legal issue was causation: whether the plaintiffs could establish that the defendants’ alleged negligence and breach of contract caused them to lose a chance of succeeding in Suit 212. In professional negligence claims framed as loss of a chance, the plaintiff must show not only that the defendant breached a duty, but also that the breach caused the loss of a real and substantial chance of a favourable outcome. The court therefore had to consider whether the plaintiffs’ evidence, taken at face value, established the essential elements of their claim in law.
A second issue arose procedurally. After the plaintiffs closed their case on Part C, the defendants submitted that they had “no case to answer”. The court had to determine whether, on the plaintiffs’ evidence, there was a prima facie case in law, or whether the evidence was so unsatisfactory or unreliable that the plaintiffs had not discharged their burden. This required the court to apply established principles on the effect of a no case to answer submission.
Finally, the court had to assess whether the plaintiffs’ own admissions and the factual record undermined the foundation of their claim. In particular, the plaintiffs’ failure to comply with discovery obligations and the subsequent striking out of Suit 212 were key background facts. The court needed to evaluate whether the plaintiffs could still show that, but for the defendants’ alleged mishandling, they would have had a chance of succeeding in the SCB action despite the discovery failures and the striking out.
How Did the Court Analyse the Issues?
The court began by setting out the legal framework for a submission of no case to answer. It noted that the effect of such a submission is well-established: it succeeds if the plaintiff’s evidence, at face value, does not establish a case in law, or if the evidence is so unsatisfactory or unreliable that the burden of proof has not been discharged. The court referred to the Court of Appeal’s reiteration of these principles in Tan Juay Pah v Kimly Construction Pte Ltd and others [2012] 2 SLR 549. It also relied on the summary of the position in Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart [2012] 1 SLR 847, where the court explained that when a defendant elects to make a no case to answer submission, the court is left with the plaintiff’s version of events, and it must accept prima facie evidence unless it is inherently unsatisfactory or unreliable.
In applying these principles, the court emphasised that the submission does not mean the court must accept every allegation. The court can reject evidence that is unsatisfactory or unreliable, and it can treat gaps in evidence as neutral where the missing evidence would not be within the personal knowledge of the relevant witness. The court further cited Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani [2008] 4 SLR(R) 657 for the proposition that a prima facie case is determined by assuming the evidence is true unless it is inherently incredible or out of all common sense or reason.
Against that procedural backdrop, the court turned to the substantive law on negligence and breach of contract, and in particular the causation requirement for loss of a chance. While the extract provided is truncated after the court began to set out the law on negligence and breach of contract, the reasoning structure is clear from the portion reproduced: the court would have required the plaintiffs to show that the defendants’ alleged breaches were causally linked to the striking out of Suit 212 and to the loss of a real chance of success. In loss of chance claims, causation is not satisfied by speculation; it requires evidence that the chance was lost because of the defendant’s breach, and that the chance was sufficiently substantial to be compensable.
The factual record in this case posed significant challenges for the plaintiffs’ causation theory. The striking out of Suit 212 was based on non-compliance with discovery orders and an Unless Order, coupled with findings that the plaintiffs wilfully and deliberately withheld disclosure of documents likely to be in their possession. The plaintiffs had initially disclosed only four documents and asserted that they had not invested in structured products with other institutions during the relevant period. Yet the later disclosure from DBS demonstrated that the plaintiffs’ discovery was incomplete. These facts would likely have been central to the court’s assessment of whether any alleged mishandling by the defendants could realistically be said to have caused the loss of chance, as opposed to the plaintiffs’ own conduct in the discovery process.
Moreover, the court would have considered whether the plaintiffs’ evidence could establish that, had the defendants acted differently, Suit 212 would not have been struck out, or that the plaintiffs would have had a meaningful chance of succeeding on the merits of their misrepresentation claim against SCB. Where a claim is struck out for discovery failures, the causation analysis typically requires the plaintiff to show that the strike-out would likely not have occurred, or that the strike-out was attributable to the defendant’s breach rather than to the plaintiff’s own non-disclosure. The court’s approach to the no case to answer submission suggests it found the plaintiffs’ evidence insufficient to meet these legal thresholds.
What Was the Outcome?
The court allowed the defendants’ submission of no case to answer in respect of Part C of the plaintiffs’ Statement of Claim. In practical terms, this meant the plaintiffs’ claim for damages for loss of a chance of succeeding in Suit 212 could not proceed to a full determination on the merits because the plaintiffs failed to establish a prima facie case in law (or failed to discharge their burden on the evidence led).
Given that summary judgment had already been entered against the defendants for Parts A, B and D, the no case to answer decision effectively ended the remaining portion of the plaintiffs’ claim. The plaintiffs therefore did not obtain damages for the alleged lost chance arising from the handling of Suit 212.
Why Does This Case Matter?
This decision is useful for practitioners because it illustrates how courts scrutinise causation and proof in professional negligence claims framed as “loss of a chance”. Even where a plaintiff alleges that solicitors mishandled litigation steps, the plaintiff must still demonstrate, with evidence, that the alleged breach caused the loss of a real and substantial chance of a favourable outcome. The case underscores that courts will not treat causation as automatic merely because there was professional error; the plaintiff must connect the breach to the adverse procedural outcome and to the lost chance.
It is also a strong authority on the operation of submissions of no case to answer in civil trials. The court’s discussion, drawing on Court of Appeal and High Court authorities, reinforces that the plaintiff’s evidence must establish the essential elements of the claim in law. Where the evidence is unsatisfactory or unreliable, or where admissions undermine the foundation of the claim, the court may conclude that there is no case to answer without requiring the defendant to call evidence.
For lawyers, the case has practical implications for how discovery-related failures are litigated in subsequent negligence actions. Where the underlying action was struck out for non-compliance with discovery orders and an Unless Order, plaintiffs face an evidential burden to show that the strike-out was attributable to the defendant’s breach rather than to the plaintiff’s own conduct. Defence counsel can also rely on the procedural history and the objective record of non-disclosure to argue that causation is not established.
Legislation Referenced
- Financial Advisors Act
Cases Cited
- Tan Juay Pah v Kimly Construction Pte Ltd and others [2012] 2 SLR 549
- Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart [2012] 1 SLR 847
- Bansal Hemant Govindprasad v Central Bank of India [2003] 2 SLR(R) 33
- Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani [2008] 4 SLR(R) 657
- Lee Chang-Rung and others v Leonard Loo LLP and another [2012] SGHC 174
Source Documents
This article analyses [2012] SGHC 174 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.