Alliance Management SA v Pendleton Lane P and another and another suit

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judgment Date: 03 June 2008
• Docket Number: Suits Nos 511 and 522 of 2005,Suits Nos 511 and 522 of 2005 (Registrar's Appeals Nos 335 and 336 of 2006)
• Date: 03 June 2008

Alliance Management SA

Plaintiff

and

Pendleton Lane P and another and another suit

Defendant

[2007] SGHC 133

Belinda Ang Saw Ean J

Suits Nos 511 and 522 of 2005 (Registrar's Appeals Nos 335 and 336 of 2006)

High Court

Civil Procedure–Production of documents–Court's discretion to order production for purposes of inspection–Applicable principles–Access to material stored on computer database–Safeguards to prevent trawling–Order 24 r 12 (1) Rules of Court (Cap 322, R 5, 2006 Rev Ed)–Civil Procedure–Production of documents–Whether court having power to order non-party to produce documents for inspection–Order 24 rr 6 (2), 11 (2) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

The plaintiff was a shareholder of Orient Networks Holdings Ltd (“ONH”), a company with a wholly-owned subsidiary, Orient Telecommunications Networks Pte Ltd (“OTN”). ONH was in liquidation while OTN was under judicial management. The first defendant (“LPP”) was the co-chairman and executive director of ONH and a key member of OTN's management team. The second defendant (“Newfirst”) was the investment vehicle used by LPP to hold shares in ONH.

The plaintiff sought to claim damages from the defendants for being induced into investing substantial sums of money in ONH and providing guarantees for ONH and OTN, having been falsely misled on their performance, state and prospects. Not satisfied with the discovery provided by the defendants, the plaintiff sought specific discovery pursuant to O 24 r 5 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“ROC”).

The assistant registrar made an order (“the Order”) for: (a) LPP to produce and return to the judicial manager of OTN a hard drive previously assigned to him for his use (“the Hard Disk”); and (b) LPP and Newfirst to: (i) furnish a list and produce for inspection the documents described in Annex A of the Order; and (ii) produce for inspection the documents described in Annex B of the same. The defendants brought this appeal against the Order which, inter alia, entailed the inspection of material stored on the Hard Disk.

Held, dismissing the appeal:

(1) Material stored on a computer database was within the definition of a “document” and this concept embraced the Hard Disk for the purposes of O 24 of the ROC. There was cogent evidence that the Hard Disk, with the documents stored therein, was and remained in the possession, custody or power of LPP: at [10], [21] to [24].

(2) There was a distinction between the court's power to order discovery of information stored on a computer database and its discretion to order production for the purposes of inspection. For the latter, the burden was on the requesting party to establish that the inspection was necessary for disposing fairly the cause or matter, or for saving costs; it was also a far more intricate inquiry involving judicial balancing of the competing interests of the parties. As such, a protocol had to be put in place to ensure that the requesting party only had access to inspect documents that were necessary for the conduct of his case: at [18] and [19].

(3) The court was empowered by O 24 r 12 of the ROC to order the production and return of the Hard Disk to the judicial manager. The words “produce to the Court” in O 24 r 12 (1) had the purpose of carrying into effect the provisions of rr 1 and 5, such as enabling the court to redirect production or to incorporate safeguards to the documents stored on the Hard Disk. Order 24 r 12 (2) gave the court the unfettered power to deal with the Hard Disk “in such manner as it thinks fit”: at [26].

(4) As the return of the Hard Disk to the judicial manager was premised on it belonging to OTN, it was fair to order for its return to the former: at [26].

(5) The Order was varied to include safeguards such as the appointment of a computer expert, who was to give an undertaking of confidentiality to the court, to make an electronic copy of the Hard Disk, and to first make it available to the defendants for review for the purpose of claiming privilege, if any, before release to the plaintiff for inspection: at [36].

[Observation: The words “in respect of which discovery has been given under any Rule in this Order or in pursuance of any order made thereunder” in O 24 r 11 (2) of the ROC were not restrictive and could include an order of discovery made against a non-party under O 24 r 6 (2). The court had the discretion to make or refuse the order sought or to modify or limit its terms: at [30].]

Derby & Co Ltd v Weldon (No 9) [1991] 1 WLR 652 (folld)

Dolling-Baker v Merrett [1990] 1 WLR 1205; [1991] 2 All ER 890 (refd)

Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2006] FCA 1802 (refd)

Koh Toi Choi v Lim Geok Hong [2007] 3 SLR (R) 340; [2007] 3 SLR 340 (folld)

Megastar Entertainment Pte Ltd v Odex Pte Ltd [2005] 3 SLR (R) 91; [2005] 3 SLR 91 (folld)

Playboy Enterprises, Inc v Terri Welles60 F Supp 2d 1050 (1999) (refd)

Rafidain Bank v Agom Universal Sugar Trading Co Ltd [1987] 1 WLR 1606; [1987] 3 All ER 859 (refd)

Roberto Building Material Pte Ltd v Oversea-Chinese Banking Corp Ltd [2003] SGCA 18 (refd)

SMS Pte Ltd v Power & Energy Pte Ltd [1996] 1 SLR (R) 121; [1996] 1 SLR 767 (refd)

Sony Music Entertainment (Australia) Ltd v University of Tasmania (No 1) [2003] FCA 532 (refd)

UMCI Ltd v Tokio Marine & Fire Insurance Co (Singapore) Pte Ltd [2006] 4 SLR (R) 95; [2006] 4 SLR 95 (refd)

Wellmix Organics (International) Pte Ltd v Lau Yu Man [2006] 2 SLR (R) 117; [2006] 2 SLR 117 (refd)

Evidence Act (Cap 97,1997 Rev Ed)ss 3 (1),35 (1) (a),35 (1) (c)

Rules of Court (Cap 322, R 5, 2006 Rev Ed)O 24r 6 (2), O 24r 11 (2), O 24r 12 (1) (consd);O 20r 8, O 24, O 24r 1, O 24r 5, O 24r 9, O 24r 11, O 24r 12, O 24r 12 (2), O 24r 13, O 27r 4, O 29

Cavinder Bull, Tan Hee Joek and Woo Shu Yan (Drew & Napier LLC) for the plaintiff

Chandra Mohan and Celia Tan (Rajah & Tann) and Alvin Chang (M & A Law Corporation) for the defendants.

Belinda Ang Saw Ean J

1 This was an appeal from the decision of the learned assistant registrar, Ms Ang Ching Pin (“the AR”), given on 24 November 2006 (“the November Order”) whereby she, inter alia, ordered: (a) the first defendant, Lane P Pendleton (“LPP”), to produce and return to the judicial manager of Orient Telecommunications Networks Pte Ltd (“the Judicial Manager”) the original hard drive of a Dell laptop that was previously assigned to LPP for his use (“the Hard Disk”); and (b) LPP and the second defendant, Newfirst Limited (“Newfirst”), to: (i) give discovery as in furnishing a list and producing for inspection the various categories of documents described in Annex A of the November Order; and (ii) to produce for inspection documents described in Annex B of the November Order. At the conclusion of the hearing, I dismissed the appeal for the most part and ordered the defendants to pay costs fixed at $10,000 and disbursements to be taxed, if the parties could not agree on the quantum of disbursements. As for Registrar's Appeal No 335 of 2006 filed in Suit No 522 of 2005, the parties had agreed to follow and abide by the outcome of this appeal (Registrar's Appeal No 336 of 2006). The defendants have appealed against that part of my decision relating to: (a) the production and return of the Hard Disk to the Judicial Manager; (b) the inspection of documents under categories (a) and (e) of Annex B; and (c) the order on costs. I now publish the detailed grounds for my decision in respect of the issues that are being appealed against.

Background

2 The plaintiff is a company incorporated in Switzerland and a shareholder of Orient Networks Holdings Ltd (“ONH”), a company incorporated in the Cayman Islands. Orient Telecommunications Networks Pte Ltd (“OTN”) is the wholly-owned subsidiary of ONH. ONH is in liquidation while OTN is still under judicial management. LPP was, at all material times, the co-chairman and executive director of ONH. He was also, at all material times, a key member of OTN's management team. Newfirst was the investment vehicle used by LPP to hold shares in ONH.

3 In this action, the plaintiff claims damages from the defendants in respect of three distinct causes of action: (a) fraudulent misrepresentation; (b) breach of duty of care; and (c) breach of contract. Essentially, the complaint is that the plaintiff was induced into investing substantial sums of money in ONH having been falsely misled on the performance, state and prospects of ONH and its subsidiaries, including OTN. Similarly, the plaintiff was misled into providing guarantees in favour of the bankers of ONH and OTN in 2003, and the plaintiff as guarantor had allegedly suffered loss and damage. It was also alleged that the defendants had breached a duty of care owed to the plaintiff to ensure that the representations made to the plaintiff were true, accurate and not misleading. On the plaintiff's claim for breach of contract, LPP and Newfirst allegedly breached: (a) an agreement to purchase shares; (b) a 2003 share purchase agreement; and (c) an amendment payment schedule by failing, refusing or neglecting to pay various sums of money to ONH. Additionally, LPP had allegedly breached an agreement to personally indemnify the plaintiff against any loss arising from the provision of an amended banker's guarantee for an increased credit facility to OTN in November 2003. In total, the plaintiff claims, inter alia, a sum of US$5m from the defendants, and a further and separate sum of US$3.65m from LPP.

The history of discovery leading up to this appeal

4 The process of discovery has had a fairly drawn-out history. In the course of the proceedings, the defendants provided discovery by filing and serving a list of documents on 31 March 2006 (“LOD”). However, being dissatisfied with the defendants' LOD, the plaintiff called for further discovery. Three months later, the defendants filed a supplementary list of documents (“SLOD”)...