Banque Cantonale Vaudoise v Fujitrans (Singapore) Pte Ltd

• Jurisdiction: Singapore
• Judge: Tan Lee Meng J
• Judgment Date: 29 November 2006
• Neutral Citation: [2006] SGHC 217
• Docket Number: Suit No 542 of 2002 (Registrar's
• Date: 29 November 2006
• Year: 2006
• Published date: 30 November 2006
• Plaintiff Counsel: Kenneth Lie, Angela Yap and Chow Sy Han (Joseph Tan Jude Benny)
• Citation: [2006] SGHC 217
• Defendant Counsel: Toh Kian Sing and Alvin Looi (Rajah & Tann)
• Court: High Court (Singapore)
• Subject Matter: Whether appellant showing how circumstances had changed to warrant court taking different view from judge in first application,Discovery of documents,First discovery application dismissed as fishing expedition or attempt to discover irrelevant documents,Order 24 r 5 Rules of Court (Cap 322, R 5, 2006 Rev Ed),Civil Procedure,Appellant seeking discovery of documents, several categories of which had been considered in prior discovery application,Whether all categories of documents sought relevant to appellant's defences

29 November 2006

Tan Lee Meng J

1 The appellant, Fujitrans (Singapore) Pte Ltd (“Fujitrans”), which was sued by the respondent, Banque Cantonale Vaudoise (“BCV”), appealed against the dismissal of their application for discovery of documents by the Assistant Registrar, Mr Yeong Zee Kin. I affirmed the Assistant Registrar’s decision and now set out the reasons for my decision.

Background

2 The suit by BCV, a Swiss bank, against Fujitrans, a Singapore company that provides warehousing facilities, has its roots in an alleged fraudulent scheme perpetrated on a number of banks in Europe and in Singapore by the officers of RBG Resources Plc (“RBG”), an international metals merchant with a broad spectrum of global clients. These banks had either purchased metals from RBG or advanced money to RBG on the security of metals allegedly stored in warehouses. It was alleged that Fujitrans was involved in RBG’s wrong-doing by sending fraudulent warehouse attornments for non-existent cargoes to BCV, who relied on them to provide financing to RBG. The alleged fraud in Singapore was perpetrated by Fujitrans’ former warehouse manager, Mr Lim Tau Hee. BCV asserted that it would not have disbursed monies to RBG’s seller if it had known that the attornments were false and that the metal cargoes did not exist and claimed that Fujitrans was vicariously liable for Mr Lim’s acts or was itself negligent in the provision of warehouse services.

The First Discovery Application in 2004

3 It is pertinent to note that six out of the seven categories of documents sought in the present discovery application had been considered by Woo Bih Li J in 2004 (“the first discovery application”). In that year, BCV applied for summary judgment against Fujitrans, who applied for discovery of several categories of documents. The first discovery application was dismissed by the Assistant Registrar on 10 June 2004 save for one category relating to BCV’s Loans and Securities Manual. Fujitrans’ appeal against the Assistant Registrar’s decision was dismissed by Woo J, who had no doubt after considering at length the categories of documents sought that Fujitrans had embarked on a fishing expedition or had sought discovery of documents that were not necessary for the conduct of its case: see Banque Cantonale Vaudoise v RBG Resources Plc [2004] 4 SLR 856.

4 Fujitrans’ appeal against Woo J’s decision was dismissed by the Court of Appeal.

The Assistant Registrar’s Decision

5 As has been mentioned, in the present discovery application (“the second discovery application”), Fujitrans sought discovery of seven categories of documents, six of which had already been considered by Woo J in the first discovery application in 2004.

6 BCV’s counsel, Mr Toh Kian Sing, submitted that in regard to these six categories already considered by Woo J in the first discovery application, the matter was res judicata and it was an abuse of the process of the court to try and re-open the issue without any further development to justify this. As for the seventh category, Mr Toh asserted that the documents were irrelevant to the trial.

7 The Assistant Registrar heard Fujitrans’ second discovery application on 28 August 2006 and dismissed it on two grounds. First, in regard to the categories already considered by Woo J in 2004, he found that there was issue estoppel. He stated as follows in his Notes of Evidence:

As the facts and basis for application are substantially the same as those presented before Woo J, I am of the view that issue estoppel applies…. I have studied Woo J’s judgment in BCV v RBG Resources [2004] 4 SLR 856 and although Woo J commented on the proper procedures and the motives of the Defendant’s application, when Woo J dealt with the discovery application, he dealt with it substantively and did not qualify that he was considering it only for the summary judgment appeal.

8 Secondly, the Assistant Registrar found that Fujitrans had not demonstrated a substantial change in the circumstances to warrant that he come to a different view from Woo J. He explained as follows:

I am mindful that discovery is an ongoing obligation, but having applied on a set of facts, the Defendant has to show in a subsequent application that circumstances have substantially changed to justify another application for the same classes – or in this case, two expanded classes - of documents.

The Appeal

9 Order 24 rule 5 of the Rules of Court (Cap 322, R5, 2006 Rev Ed) gives the court a discretion to order the discovery of documents at any time. The documents in respect of which discovery may be ordered are as follows:

(a) a document on which the party relies or will rely;

(b) a document which could –

(i) adversely affect his own case;

(ii) adversely affect another party’s case; or

(iii) support another party’s case; and

(c) a document which may lead the party seeking discovery of it to a train of inquiry resulting in his obtaining information which may –

(i) adversely affect his own case;

(ii) adversely affect another party’s case; or

(iii) support another party’s case.

10 That O 24 r 5 is not intended to cover what is essentially a “fishing expedition” by an applicant has been reiterated by the courts on innumerable occasions. In O Co v M Co [1996] 2 Lloyd’s Rep 347, 351, Colman J, while considering the corresponding English position, rightly frowned on “discovery demands which would involve parties to civil litigation being required to turn out the contents of their filing systems as if under criminal investigation on the off-chance that something might show up from which some relatively weak inference prejudicial to the case of the disclosing party might be drawn”. He added that the document or class of documents must be shown by the applicant “to offer a real probability of evidential materiality in the sense that it must be a document or class of documents which in the ordinary way can be expected to yield information of substantial evidential materiality to the pleaded claim and the defence to it”.

11 In Tan Chin Seng & Ors v Raffles Town Club Pte Ltd [2002] 3 SLR 345, 351, Chao Hick Tin JA, who delivered the judgment of the Court of Appeal, said that one of the essential preconditions to be satisfied before discovery will be ordered is that of relevance. As for the principle of “train of inquiry”, which is incorporated in O 24 r 5 of the Rules of Court, he pointed out that it is necessary for a party seeking discovery of documents to show in what way the requested document may lead to the relevant document. He added that whether a document would affect a party’s case or adversely affect the other party’s case or support another party’s case must depend on the issues pleaded in the action.

The six categories of documents previously considered by Woo J

12 It is appropriate at this juncture to consider the six categories of documents in the second discovery application that mirrored or were wider than those sought in the first discovery application considered by Woo J.

The first category of documents

13 The documents sought in category 1 of the second discovery application, which are identical to those sought in the first discovery application, are as follows:

Account Statements for all Allied Deals (and later) RBG Resources PLC accounts from 1 September 1998 to until 31 May 2002 (or from the opening of the account facilities until their closure or inactivity, whichever period is greater) including but not limited to Current and Deposit Accounts and in particular the US$ Overdraft Account numbered 959.94.71.

14 In relation to this category of documents, Woo J stated in his judgment at [40] as follows:

The very wide ambit of the category sought itself suggested that Mr Palmer was hoping to find some evidence to lend credence to his suspicion, a suspicion which was not based on anything more than his belief that an overdraft facility was a most unusual method of financing. His suspicion itself was couched in vague terms. In my view, this request was a fishing expedition. [emphasis added]

The second category of documents

15 Like the documents in category 1, the documents sought in category 2 of the second discovery application are identical to those sought in the first discovery application and are as follows:

All Term Sheet and Loan Approval Documentation sent to Allied Deals/RBG in respect of the business relationship with BCV for the period 1 September 1998 to May 2002.

16 In his judgment, Woo J stated as follows at [42] in relation to category 2:

This category was very wide and demonstrated that Mr Palmer was hoping to find an omission on the part of BCV to follow a...