Breezeway Overseas Ltd v UBS AG

• Jurisdiction: Singapore
• Judgment Date: 16 August 2012
• Date: 16 August 2012
• Docket Number: Suit No 114 of 2010 (Registrar's Appeal No 412 of 2011)
• Court: High Court (Singapore)

Breezeway Overseas Ltd and another

Plaintiff

and

UBS AG and others

Defendant

[2012] SGHC 170

Lee Seiu Kin J

Suit No 114 of 2010 (Registrar's Appeal No 412 of 2011)

High Court

Civil Procedure—Discovery of documents—Electronic discovery—Party giving discovery disputing keywords to be used in keyword search—Whether keywords would identify material potentially relevant to issues in present suits—Whether party giving discovery entitled to review search results for relevance and/or privilege

The plaintiffs alleged that they relied on the representations of the first, fourth and fifth defendants (collectively, ‘the Bank’) and took loans from the fourth defendant to purchase leveraged bonds. The Bank's employees had allegedly represented that the loans were fixed and/or fixed to maturity. The second plaintiff claimed that he was not told that the first plaintiff had to provide ‘collateral’ to secure the loans. The Bank subsequently issued margin calls on the plaintiffs' account, which required the plaintiffs to raise huge sums of money within a short period of time, failing which the Bank threatened to liquidate the plaintiffs' assets against the plaintiffs' will. During this period of time, the plaintiffs protested strongly against the Bank's decisions to reduce the quantum of the loans and to make the margin calls. The plaintiffs claimed against the Bank for, inter alia, misrepresentation, breach of fiduciary duties, gross negligence, wilful misconduct and breach of contract.

Electronic discovery was sought and the learned senior assistant registrar (‘SAR’) ordered that the Bank was to conduct reasonable keyword searches on the categories of documents in question and allow discovery of the search results. The parties agreed on certain keywords but disagreed on 23 keywords. The SAR subsequently ordered that ten of the disputed keywords were to be used in the keyword searches. The Bank appealed against the SAR's order.

Held, allowing the appeal in part:

(1) Given that the plaintiffs agreed that the alleged ‘protest’ only arose on or after February 2009, the court allowed the part of the appeal relating to the time period to be used for a keyword search on the term ‘protest’: at [17].

(2) The Supreme Court Practice Direction No 3 of 2009 (‘the e-discovery PD’) attempted to supplement the traditional tests of relevancy and necessity in the context of e-discovery. It worked within the framework of traditional discovery, seeking a pragmatic compromise between the obligation to give discovery of all relevant documents and the potentially prohibitive costs of identifying those documents by way of manual review. However, the e-discovery PD neither set out to change the law on discovery nor to resolve the problems associated with traditional principles of discovery: at [21] and [22].

(3) Keyword searches were permitted under paras 43 D (1) and 43 D (4) of the e-discovery PD. Although keyword searches were potentially both over- and under-inclusive, such keyword searches presented a practical trade-off between achieving a theoretically complete set of relevant material and keeping costs proportionate to the value of the claim: at [24] and [25].

(4) The process of identifying relevant material through keyword searches might be helpfully conceptualised as an iterative sieving process, under which the court and the parties endeavoured to select the best possible keywords that would avoid sieving out relevant material whilst simultaneously ensuring a practical and workable manner of processing the material at hand. Parties would thereafter clarify and/or narrow search terms as necessary with a collaborative spirit and in good faith, resorting to applications to court only when parties required an arbiter to break the impasse. The court would eventually sanction a final set of search criteria for the purposes of e-discovery (‘court-sanctioned search’): at [26].

(5) The concept of ‘prima facie relevance’ referred to in Robin Duane Littau v Astrata (Asia Pacific) Pte Ltd[2011] SGHC 61 refers to the notion that the party giving discovery was not required to review the search results of the court-sanctioned search for relevance. The search results of the court-sanctioned search were ‘prima facie relevant’ in the sense that the party giving discovery would be deemed to have complied with his obligation to provide all relevant documents under the general discovery process: at [30].

(6) There was a conceptual distinction between the obligation to give discovery and the concept of relevance in the context of e-discovery. With regard to the former, the party giving discovery would fulfil his or her discovery obligations as long as the party complied with the terms of the court-sanctioned search as well as with all the necessary requirements as stated in the Rules of Court (Cap 322, R 5, 2006 Rev Ed), notwithstanding the fact that there could well be documents not caught by the keyword searches. With regard to the latter, the party giving discovery was entitled to conduct a post court-sanctioned search review for relevance. He or she might remove documents that were irrelevant to the issues in dispute, but any such further review would be outside the ambit of the e-discovery PD and the decision to remove any document on the ground of irrelevance had to be done by way of manual review: at [31] to [33].

(7) As a post court-sanctioned search review for relevance was usually an expense unreasonably incurred, the party electing to do this would not generally be entitled to recover the costs of the review in the event that costs were eventually awarded in his favour: at [33].

(8) The party giving discovery was also entitled to conduct a post court-sanctioned search review for privileged and/or confidential material. As with post court-sanctioned search reviews for relevance, any documents might only be withheld from discovery on the ground of privilege and/or confidentiality pursuant to manual review, and costs for this extra step would not generally be allowed: at [34].

(9) For the reasons given by the SAR, it was reasonable to believe that the keywords ordered would identify material that was potentially relevant to the issues in the present suits. The Bank was, however, entitled to conduct post court-sanctioned search reviews for relevance: at [35] and [36].

Breezeway Overseas Ltd v UBS AG [2012] SGHC 41 (refd)

Compagnie Financiere et Commerciale du Pacifique, The v The Peruvian Guano Co (1882) 11 QBD 55 (refd)

Deutsche Bank AG v Chang Tse Wen [2010] SGHC 125 (refd)

Digicel (St Lucia) Ltd v Cable & Wireless Plc [2008] EWHC 2522 (Ch) (refd)

Gavin Goodale v The Ministry of Justice [2010] EWHC B 40 (QB) (refd)

Nichia Corp v Argos Ltd [2007] Bus LR 1753; [2007] EWCA Civ 741 (refd)

Robin Duane Littau v Astrata (Asia Pacific) Pte Ltd [2011] SGHC 61 (refd)

Sanae Achar v Sci-Gen Ltd [2011] 3 SLR 967 (refd)

Surface Stone Pte Ltd v Tay Seng Leon [2011] SGHC 223 (refd)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 24, O 24 r 1, O 24 r 5 (3) (c) , O 24 r 7

Freddy Lim (Lee & Lee) for the plaintiffs

Tan Shou Min (Drew & Napier LLC) for the first, third, fourth and fifth defendants

Charmaine Chan (Legis Point LLC) for the second defendant.

Lee Seiu Kin J

1 This was an appeal against part of the decision of the learned senior assistant registrar (‘SAR’) regarding certain disputed keyword search terms in the electronic discovery (‘e-discovery’) process. The grounds of the SAR's decision may be found in Breezeway Overseas Ltd v UBS AG [2012]SGHC 41 (‘Breezeway’). After hearing both parties, I allowed the appeal in part. I now set out the reasons for my decision.

Background facts

The parties

2 The present appeal arose from a summons (‘SUM 2443/2011’) taken out in Suits No 112 of 2010 and 114 of 2010 (‘the Suits’) for an order that the parties conduct e-discovery in accordance with the plaintiffs' draft e-discovery protocol dated 19 May 2011.

3 The first plaintiff, Breezeway Overseas Ltd, is a company registered in the British Virgin Islands, while the second plaintiff, Mr Vasanmal Murli, is a director of the first plaintiff and the person who exerts effective and complete control over the first plaintiff. The first defendant is UBS AG, a global financial services firm that is headquartered in both Basel and Zurich, Switzerland, while the fourth and fifth defendants are the Hong Kong and Singapore branches of the first defendant. For convenience, the first, fourth and...