ED&F Man Capital Markets Ltd v Straits (Singapore) Pte Ltd

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
JudgeJudith Prakash JA,Steven Chong JA,Quentin Loh J
Subject MatterDiscovery,Civil Procedure,Collateral purpose,Interrogatories,Abuse of Process,Pre-action interrogatories,Pre-action discovery,Riddick principle
Plaintiff CounselPrakash Pillai and Koh Junxiang (Clasis LLC)
Date06 July 2020
Defendant CounselToh Kian Sing SC, Ting Yong Hong and Davis Tan Yong Chuan (Rajah & Tann Singapore LLP)
Published date10 July 2020
Hearing Date09 June 2020
Docket NumberCivil Appeal No 132 of 2019 and Summonses Nos 31 and 46 of 2020
Steven Chong JA (delivering the grounds of decision of the court): Introduction

Discovery is a critical process in any court proceeding. It fulfils the function of discovering the truth between the parties so that justice can be served. Typically, discovery is provided in aid of an action which is before the court and the issues in the action would define the scope and ambit of the discovery.

As an exception to this default rule, a court may order discovery prior to the commencement of court proceedings. This is achieved by way of an application for pre-action discovery. To prevent abuse, strict requirements must be satisfied before the court would exercise its discretion to grant this exceptional form of discovery, paramount of which is the mandatory requirement that the documents are intended for use in Singapore proceedings.

This appeal can be traced to an unsuccessful application for pre-action discovery and interrogatories by the appellant. In resisting the application, the respondent filed several affidavits to explain why the application should be dismissed. Various documents which formed part of the documents sought by the appellant were exhibited in the affidavits.

Despite failing in its application for pre-action discovery, the appellant nonetheless proceeded to use the disclosed documents in aid of its joinder application to add the respondent to proceedings commenced against other parties in the United Kingdom (“the UK proceedings”).

Would the use of the disclosed documents in the UK proceedings under such circumstances constitute an abuse of the pre-action discovery regime? Is the principle articulated in Riddick v Thames Board Mills Ltd [1977] QB 881 (“the Riddick principle”) engaged since there was no court order compelling the disclosure of the disclosed documents? If not, should the Riddick principle be extended to apply to all information and documents disclosed in the course of an application for pre-action discovery?

We agree with the Judge below that the appellant should be enjoined from using the disclosed documents in the UK proceedings, though our reasons differ from the Judge in some respects. At the end of the hearing, we dismissed the appeal and we now provide our detailed grounds.

Material facts

The appellant, ED&F Man Capital Markets Limited, is a company registered in England. It is the financial services division of ED&F Man Holdings Limited, and operates a global brokerage and financial services business in a range of products which include commodities.1 The respondent, Straits (Singapore) Pte Ltd is a company registered in Singapore and is a subsidiary company of Straits Financial Group Pte Ltd. It provides structured trade finance, physical inventory monetisation and risk management services, and finances exchange-grade commodities such as nickel and zinc products.2

In 2016, the appellant entered into repurchasing agreements with two Hong Kong companies, Come Harvest and Mega Wealth (collectively, “the Companies”). Under these agreements, the Companies sold nickel products (“the Commodities”) to the appellant but retained the option of repurchasing the Commodities at a fixed price by a set date.3 If the option was not exercised by that date, the appellant would be entitled to take possession of the Commodities. The Commodities were stored in warehouses that issued receipts for products in their custody. Possession of a duly-endorsed, original warehouse receipt entitled the holder to obtain possession of the goods identified in the receipt.4

Pursuant to the repurchasing agreements, the Companies handed what appeared to be original warehouse receipts for the Commodities to the appellant. The receipts reflected the respondent’s endorsements which suggested that the respondent had sold the Commodities to the Companies, who in turn on-sold them to the appellant.5 The appellant and the respondent did not have any direct contractual relationship or business dealings with each other.6

In January 2017, the appellant discovered that the warehouse receipts in its possession had been forged. Believing itself to be the victim of fraud, the appellant’s solicitors contacted the respondent for its assistance and sought, inter alia, documents and records relating to the respondent’s ownership of the Commodities and its relationship with the Companies.7 The respondent’s solicitors responded to state that the respondent had never handed the original warehouse receipts to the Companies, the receipts had always been in its possession, and it remained the owner of the Commodities. Furthermore, the respondent stated that it was not in a position to provide the appellant with the information and documents requested.8 Further correspondence was exchanged, but the respondent maintained its stance and did not provide any further information.

On 17 May 2017, the appellant filed Originating Summons No 533 of 2017 (“OS 533”) for pre-action discovery and interrogatories against the respondent pursuant to O 24 r 6 and O 26A r 1 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed).9 It raised potential causes of action against the respondent in the torts of conspiracy by unlawful means and dishonest assistance, and it also sought information from the respondent on the identities of the actual wrongdoers (ie, “Norwich Pharmacal relief”, as established in Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133).10

In the course of resisting OS 533, the respondent filed 12 affidavits deposed by its employees, solicitors and an expert witness. These affidavits and their exhibited documents (“the disclosed documents”) form the core of the present dispute. The first affidavit (“He’s 1st Affidavit”) filed on behalf of the respondent contained the following reservation:11

In this affidavit, I will begin by providing some background information on the warehouse receipts… Such information is provided to assist the Honourable Court and to demonstrate why [OS 533] should be dismissed. The disclosure is without prejudice to the [respondent’s] position that the [appellant] is not entitled to any of the information and/or documents sought in [OS 533], for the reasons I will elaborate below.

[emphasis in underline in original]

He’s 1st affidavit also annexed copies of some documents sought in OS 533, specifically, the original warehouse receipts and the invoices issued by the warehouse to the respondent.12 The affidavit also provided most of the information which the appellant had sought in its application for pre-action interrogatories, such as details of the respondent’s transactions with the Companies.13

On 21 December 2017, while the hearing of OS 533 was pending, the appellant commenced an action against the Companies in the UK.14 This was pursuant to a clause in the repurchasing agreements between the appellant and the Companies that provided for the exclusive jurisdiction of the English courts. The appellant claimed damages against the Companies for deceit and/or unjust enrichment.15 The papers were served on the Companies in Hong Kong in January 2018.

At a hearing on 7 March 2018, the appellant’s counsel informed the court of the existence of the UK proceedings.16 Initially, the appellant confirmed through its counsel that it would file an affidavit to provide an update of the UK proceedings, but, at a later hearing, changed its position and decided not to file an affidavit.17 In fact, at the hearing of OS 533 before the assistant registrar (“the AR”), the appellant took the position that the UK proceedings were “strictly irrelevant” to OS 533 because they involved different parties and different causes of action.18 At the AR’s directions, the appellant eventually filed a short affidavit, though that merely annexed the claim form it had filed against the Companies.19

OS 533 was dismissed by the AR on 13 August 2018. The AR found that the potential claims the appellant alleged against the respondent in conspiracy and dishonest assistance were speculative and it had not even alleged that the respondent was complicit in the fraud.20 As for its application for Norwich Pharmacal relief, the appellant had already identified the main wrongdoers (ie, the Companies) and had commenced proceedings against them in the UK.21 The AR also highlighted the “width and intrusiveness” of the documents and information sought, and observed that the appellant had been resistant to disclosing the existence of the UK proceedings to the court. She found its conduct in this regard “somewhat troubling”.22

The appellant appealed against the AR’s decision. On 17 September 2018, while the appeal was pending before the Singapore courts, the appellant applied to the High Court of England and Wales to join the respondent in the UK proceedings,23 stating that it intended to plead causes of action in deceit, unlawful means conspiracy, constructive trust and knowing receipt against the respondent.24 In this joinder application, the appellant relied on information contained in the disclosed documents.25 The joinder application was granted ex parte on 23 November 2018.26

The appellant withdrew its appeal against the AR’s decision in OS 533 on 11 February 2019.27 On 1 March 2019, the respondent applied for injunctions to restrain the appellant from (a) using the disclosed documents in the UK proceedings; and (b) continuing its suit against the respondent in the UK proceedings (ie, an anti-suit injunction).28 In the UK proceedings, it applied to set aside the joinder order and challenged the jurisdiction of the English court.29

Decision below

The Judge enjoined the appellant from adducing or relying on the disclosed documents in any foreign proceedings but declined to grant the anti-suit injunction: ED&F Man Capital Markets Ltd v Straits (Singapore) Pte Ltd [2019] SGHC 203 (“GD”) at [1]. The appeal before us concerns only the injunction against the use of the disclosed...

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