A lawyer who was cleared of overcharging a widow in her 80s has to face a fresh disciplinary hearing, as the original hearing did not investigate the full complaint against him, the High Court has found.

The court set aside entirely the existing disciplinary tribunal's (DT) report that cleared Senior Counsel Alvin Yeo last year, finding that the charges should have addressed whether his client, a wealthy octogenarian widow, had the mental capacity to retain legal counsel, and not simply if she had been overcharged.

"Any fresh hearing is consistent with the legislative framework and the public interest that complaints against lawyers are fully heard and investigated," said Justice Valerie Thean in judgment grounds issued yesterday.

The case involved a bill of $7.56 million for work done over 4½ years from November 2010, on behalf of the elderly woman, who was fighting an application from her sisters to become her deputies, as they claimed she lacked the mental capacity to deal with her assets.

The Court of Appeal found the woman had been unduly influenced by her daughter and son-in-law, and appointed professional deputies to act for her.

The court also highlighted the size of the fees and directed the matter to be referred for investigation but made clear it had not arrived at any conclusion as to whether or not there was professional misconduct.

After negotiations, WongPartnership gave a 32.5 per cent discount, bringing the fees down to about $5.1 million, of which Mr Yeo's client had to fork out about $542,000. The remainder was to be paid by the other defendants, her daughter and son-in-law.

Though the charges ultimately brought by the Law Society dealt only with the overcharging, Justice Thean found the complaint had also called into question the widow's mental capacity, and directed the society to run its case on that new basis.

The Law Society is to apply to the Chief Justice for the appointment of another disciplinary tribunal to hear and investigate the complaint, she ruled.

The judgment comes in the wake of separate applications by the Attorney-General and the Law Society last year for the High Court to review the DT's decision to clear SC Yeo. The DT found that the Law Society had failed to show there had been overcharging.

In the High Court application to set aside the DT findings, the A-G, represented by Senior State Counsel Kristy Tan and State Counsel Jamie Pang, argued that the DT had failed in its legal duty to hear the mental capacity issue, which meant it had not discharged its duty to hear and probe the complaint.

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The Law Society, led by Senior Counsel Gregory Vijayendran, associated itself in the main with the A-G's submissions and relied on two other grounds of judicial review.

Senior Counsel Chelva Rajah, in defending SC Yeo, countered that the eventual charges did not include the mental capacity issue and the DT was required to hear only the charges and not the complaint.

However, the judge made clear that the tribunal has a duty to hear and investigate the complaint as well as the charges.

"The two duties are not mutually exclusive and in fact are complementary to one another," she said, adding that the charges are expected to reflect the essence of the complaint and fall within the scope of it.

The judge said the overcharging issue was not distinct from the mental capacity issues, as the widow's ability to instruct her lawyers or follow legal advice would also have a material bearing on what she was charged.

Justice Thean found the charges brought by the Law Society did not reflect the essence of the complaint and were based on the wrong Professional Conduct Rules, and thus fell outside the scope of the complaint.

"A failure to fulfil a legal duty amounts to illegality. Since the charges were erroneous, it must follow that the determination was also erroneous and has to be set aside," she said.

Justice Thean said that a "more fundamental question" was whether it would be "unjust" to subject SC Yeo to another investigation on the same matter.

The judge accepted that SC Yeo was fully prepared to defend himself on the mental capacity issues - on which the case for a new tribunal hearing turned.

• Additional reporting by Dominic Low