Bayerische Hypo- und Vereinsbank AG v Asia Pacific Breweries (Singapore) Pte Ltd and Other Applications

• Jurisdiction: Singapore
• Judgment Date: 28 July 2004
• Date: 28 July 2004
• Docket Number: Originating Summonses Nos 284-287 (Registrar's Appeals Nos 111–114 of 2004)
• Court: High Court (Singapore)

Bayerische Hypo- und Vereinsbank AG

Plaintiff

and

Asia Pacific Breweries (Singapore) Pte Ltd and other applications

Defendant

[2004] SGHC 155

Belinda Ang Saw Ean J

Originating Summonses Nos 284-287 of 2004 (Registrar's Appeals Nos 111–114 of 2004)

High Court

Civil Procedure–Discovery of documents–Whether sufficient grounds for granting of pre-action discovery existing–Whether pre-action discovery appropriate under circumstances

Over a period of four years, Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Skandinaviska Enskilda Banken AB, Mizuho Corporate Bank Ltd and Sumitomo Mitsui Banking Corporation (“the banks”) extended loans of various amounts purportedly to the appellant, Asia Pacific Breweries (Singapore) Pte Ltd (“APBS”). The finance manager of APBS during that period, Chia Teck Leng (“Chia”), deceived the banks into thinking that the borrower was APBS by forging the signatures of the directors of the company on various resolutions. These resolutions purportedly signified the company's acceptance of the loans and the appointment of Chia as the sole authorised signatory for the loans. Chia was eventually charged for forgery and cheating. He pleaded guilty to the charges on 2 April 2004.

The banks applied for pre-action discovery under O 24 r 6 (3) of the Rules of Court (Cap 322, R 5, 2004 Rev Ed) against APBS. On 16 April 2004, the assistant registrar granted the applications and ordered APBS to give to the banks pre-action discovery of four categories of documents.

APBS appealed against the whole of the assistant registrar's decision save for the order for disclosure of Chia's employment contract and its standard terms and conditions of employment.

Held, allowing the appeals with costs to be taxed if not agreed, save for the assistant registrar's decision on costs below:

(1) An application under O 24 r 6 (3) for pre-action discovery had to be supported by an affidavit setting out the grounds for the application, the material facts pertaining to the intended action, and whether the person against whom the order was sought was likely to be a party to subsequent proceedings. The tests of “possession, custody or power” and “relevance” remained applicable for the purposes of pre-action discovery. The court had a duty to ensure that the application for pre-action discovery was not frivolous or speculative and that the applicant was not on a fishing expedition: at [4].

(2) Once the court was satisfied that the criteria of the rule were met, the next consideration was whether discovery was necessary under O 24 r 7 for disposing fairly of the proceedings or for saving costs: at [5].

(3) The court was, by O 24 r 7, concerned with the discretion to refuse disclosure of a document unless the necessity for disclosure was clearly demonstrated. An assertion that the documents are relevant would not be good enough. Equally, an assertion that the documents were necessary because they were relevant would not suffice. Obviously, if a document was not relevant, it could not be necessary for disposing of the cause or matter. On the other hand, documents could be relevant to a case without being necessary to it: at [37] and [38].

(4) The basis put forward by the banks for seeking pre-action discovery was their disbelief that APBS had no knowledge of the unauthorised accounts and the unauthorised loans taken by Chia. However, a disbelief of APBS's position itself could not be a sufficient reason for seeking pre-action discovery. Otherwise, it would result in pre-action disclosure being applied as a matter of course because invariably, cases that made their way to court were founded on a mutual disbelief of each other's perception of things: at [24] and [26].

(5) In these circumstances, it was inappropriate to make an order for pre-action discovery. The banks would have to seek discovery of the categories of documents required in the normal course after commencement of proceedings: at [28].

(6) In any event, it had not been shown that disclosure was necessary for disposing fairly of the issues in the intended actions or for saving costs. The banks focused only on the relevancy of the documents but did not address their necessity. Therefore, as necessity for disclosure was not demonstrated, the applications could not be upheld: at [29] and [38].

Beckkett Pte Ltd v Deutsche Bank AG Singapore Branch [2003] 1 SLR (R) 321; [2003] 1 SLR 321 (refd)

Kuah Kok Kim v Ernst & Young [1996] 3 SLR (R) 485; [1997] 1 SLR 169 (folld)

Ng Giok Oh v Sajjad Akhtar [2003] 1 SLR (R) 375; [2003] 1 SLR 375 (refd)

Tan Chin Seng v Raffles Town Club Pte Ltd [2002] 2 SLR (R) 465; [2002] 3 SLR 345 (folld)

Evidence Act (Cap 97, 1997 Rev Ed) s 5A

Rules of Court (Cap 322, R 5, 2004 Rev Ed) O 24 rr 6 (3), 7

Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) First Schedule para 12

Davinder Singh SC and Yarni Loi (Drew & Napier LLC) for the appellants

Alvin Yeo SC, Monica Chong and Tan Hsiang Yue (Wong Partnership) for the respondents in OS 284/2004 (RA 111/2004)

Steven Chong SC, Rebecca Chew, Lynette Koh, Lionel Tay and Paul Ng (Rajah & Tann) for the respondents in OS 285/2004 (RA 113/2004)

Steven Chong SC, Lionel Tan and Paul Ng (Rajah & Tann) for the respondents in OS 286/2004 (RA 114/2004)

Joseph Ang and Ang Wee Tiong (Tan Kok Quan Partnership) for the respondents in OS 287/2004 (RA 112/2004).

Belinda Ang Saw Ean J

1 These four appeals are by Asia Pacific Breweries (Singapore) Pte Ltd (“APBS”). On 16 April 2004, the assistant registrar ordered APBS to give to the applicants pre-action discovery of four categories of documents as listed in the schedule to her order. The applicants are Bayerische Hypo- und Vereinsbank Aktiengesellschaft (“HVB”), Skandinaviska Enskilda Banken AB (“SEB”), Mizuho Corporate Bank Ltd (“Mizuho”) and Sumitomo Mitsui Banking Corporation (“Sumitomo”). APBS is appealing against the whole of the assistant registrar's decision save for the order for disclosure of the employment contract of Chia Teck Leng (“Chia”) and its standard terms and conditions of employment. I shall hereafter refer to the applicants collectively as “the banks” and, where necessary, individually by name.

2 The applications for pre-action discovery arose from the relatively uncomplicated fraud perpetrated on the banks by Chia, the former finance manager of APBS. The fraud is considered “mega” because of the size of the loans advanced. Mr Alvin Yeo SC, assisted by Ms Monica Chong and Ms Tan Hsiang Yue, represents HVB. Mr Steven Chong SC is for SEB and Mizuho and he is assisted by Ms Rebecca Chew, Ms Lynette Koh, Mr Lionel Tay and Mr Paul Ng. Mr Joseph Ang together with Mr Ang Wee Tiong act for Sumitomo. Counsel for APBS is Mr Davinder Singh SC and he is assisted by Ms Yarni Loi.

3 Paragraph 12 of the first schedule to the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) empowers the court to order pre-action discovery in accordance with the Rules of Court. The leading local case on this topic is Kuah Kok Kim v Ernst & Young [1996] 3 SLR (R) 485. In the recent decision of Beckkett Pte Ltd v Deutsche Bank AG Singapore Branch [2003] 1 SLR (R) 321, Kan Ting Chiu J observed that the law on pre-action discovery under the Rules of the Supreme Court 1990 (Cap 322, R 5, 1990 Rev Ed) that was considered in Kuah Kok Kim had not changed under the Rules of Court 1997 (Cap 322, R 5, 1997 Rev Ed). Similarly, there is no change to the procedural rules for pre-action discovery in the 2004 edition of the Rules of Court, which was published on 29 February 2004.

4 The requirements of O 24 r 6 (3) as guided by the decision of Kuah Kok Kim are that the application for pre-action discovery be supported by an affidavit setting out the grounds for the application, the material facts pertaining to the intended action and whether the person against whom the order is sought is likely to be a party to subsequent proceedings. The tests of “possession, custody or power” and “relevance” remain applicable for the purposes of pre-action discovery. The criterion of the rule is intended to ensure that the application for pre-action discovery is not brought frivolously or without justification. Lai Kew Chai J, in delivering the judgment of the Court of Appeal in Kuah Kok Kim, [3]supra, at [59], said that the court's duty is to ensure that the application is not frivolous or speculative and that the applicant is not on a fishing expedition. That duty was adopted and applied by Choo Han Teck JC (as he then...