Breezeway Overseas Ltd v UBS AG

• Jurisdiction: Singapore
• Judge: Yeong Zee Kin SAR
• Judgment Date: 28 February 2012
• Neutral Citation: [2012] SGHC 41
• Court: High Court (Singapore)
• Docket Number: Suit No 114 of 2010 (consolidating Suit No 112 of 2010), Summons No 2443 of 2011
• Year: 2012
• Published date: 01 March 2012
• Hearing Date: 12 December 2011
• Plaintiff Counsel: Mr Julian Tay with Mr Freddy Lim
• Defendant Counsel: Mr Tan Shou Min,Ms Charmaine Chan
• Subject Matter: Civil Procedure,Electronic Discovery,Discovery in stages,Selection of search terms,Discovery by direct exchange of soft copies on finalised optical discs
• Citation: [2012] SGHC 41

Yeong Zee Kin SAR:

The first plaintiff, Breezeway Overseas Ltd (“Breezeway”), is a customer of the first defendant, UBS AG (“UBS”). Breezeway is a family investment vehicle controlled by the second plaintiff, Vasanmal Murli, who is one of its directors; the other directors are his wife and two daughters. Breezeway held accounts with the Hong Kong and Singapore branches of UBS, ie the fourth and fifth defendants respectively. At the material time, Breezeway was initially serviced by the second and then the third defendants, who were his client advisers and employees of the Singapore branch, ie fifth defendant.

History of summons application and order for discovery in stages

The present summons was taken out by the plaintiffs for discovery to be carried out in accordance with a proposed electronic discovery protocol. The second and third defendant had, by the time the summons came up for hearing, left the employment of UBS. They had also deposed to the fact that they did not have in their possession, custody or power any discoverable documents – all discoverable documents had been turned over to UBS when their employment with UBS came to an end. As UBS was not familiar with how these documents had been organised, the use of search terms to identify discoverable documents would be conducive to the efficient management of discovery.

After hearing submissions from counsel, I had ordered that parties adopt an electronic discovery protocol that provided for discovery to be carried out in stages and for the use of search terms. Parties were directed to discuss and agree on the search terms and liberty to apply was granted for parties to apply to court for determination of any disputed search term. Eventually, parties came back before me for determination of disputed search terms. UBS has now appealed against my decision in relation to the search terms that had been ordered. I set out the reasons for my decision in these grounds.

The raison d’être for discovery in stages

In olden days, there was better discipline in maintaining a more or less complete set of documents in a single file. The paper file would usually be kept by the department concerned with the transactions in question or sometimes centrally. Duplicates of certain documents were maintained by other departments: for example, by the finance or accounts department as part of their payment records. Employees usually were not expected to maintain their personal files; and their working papers, unless incorporated into the departmental file on the matter, were usually discarded.

In more recent times, e-mail messages have taken over the functions of printed correspondence to a large extent. This has resulted in two phenomena – first, the proliferation of copies and second, the decentralisation of records. Electronic mail is personal in the sense that each employee has his own e-mail account. The ease of inserting multiple addressees in an e-mail makes it easy to send the same message to a number of persons. Documents are also thus sent to multiple recipients as attachments to the e-mail message. As a result, the same message appears in each recipient’s e-mail account; and the same documents may be stored on each recipient’s computer.

Concomitantly, the practice of maintaining a central file of paper documents that is also a complete record became a practice that was no longer assiduously observed in many organisations. Although document management systems are available that enable an organisation to maintain a central electronic record of documents and e-mails, not many organisations have implemented these systems. Consequently, it is now much more difficult for an organisation like UBS to be able to “pull out the relevant file”. It has to look for documents in the e-mail accounts and computers of all employees involved in the matter. The problem is compounded where, like in the present case, the employees who were most actively involved in the matter are no longer in their employ. Without a centralised document management system, it has to potentially look for discoverable documents in the e-mail accounts and computers of all the employees who had anything to do with Breezeway’s account.

This poses a challenge to the application of traditional discovery principles to modern civil litigation. The old rules worked well when all one had to do was to “pull out the relevant file” and identify documents relevant to the issues in dispute. The relevant file was centralised and the problem of duplicates not so severe. In the modern office, the relevant file translates to the e-mail account, the computer hard disk and (frequently) the network storage of each employee. The oftentimes indiscriminate copying of e-mails to multiple addressees will assure that the party giving discovery will have to expend time and resources in identifying and removing duplicates.

Although there are computer programs that will be able to identify duplicates – ie de-duplication software – these work only on electronic documents. The effort of identifying and removing duplicates, particularly when documents from multiple custodians and repositories have been collated, should not be underestimated. There is a more efficient and cost-effective way to manage discovery.

How discovery may be conducted in stages

Conducting discovery in stages requires that parties identify at the close of pleadings both the issues in dispute and the witnesses that are key to these disputed issues. For the purpose of electronic discovery, these witnesses are referred to as custodians: an emphasis on their role as custodians of both knowledge of the relevant facts as well as custodians of the relevant documents.

Once the key custodians are identified, attention is turned to the repositories of electronic documents in their possession, custody or power. The repositories will typically include their e-mail accounts, hard disks on their desktop and notebook computers, removable storage media, online storage locations on the network, etc. Again, it is not necessarily the case that every repository under the possession, custody or power of each custodian has to be within the scope of the initial stage of discovery. Much depends on the amounts at stake and the significance of the issues in dispute: ie proportionality.

Having identified the custodian and the repositories, it is open to parties to either identify the relevant storage media or folders within storage devices (eg hard disks) to be disclosed or parties can agree that a reasonable search be conducted on the identified repositories. Where the custodian has been assiduous in his electronic filing, he may have organised his e-mails and documents into structured folders, much like how paper files used to be kept. In such felicitous circumstances, it will in fact be possible to “pull out the relevant file” by producing a copy of the relevant electronic folders and their content. This will be almost like traditional discovery. The party giving discovery may review the identified electronic folders for irrelevant e-mails and documents before making a copy of the relevant electronic documents for his adversary.

Oftentimes, e-mails and electronic documents are not so neatly organised and a keyword search may need to be conducted to identify documents for discovery. In the parlance of our practice directions on electronic discovery, this is a “reasonable search” – an electronic search conducted on the repositories using a set of agreed search terms with reasonable limits: Robin Duane Littau v Astrata (Asia Pacific) Pte Ltd [2011] SGHC 61, at [22]. The search is delimited in two respects. First, parties have to decide whether the entire storage device (eg hard disk) or storage medium is to be searched, or only certain folders and sub-folders. For hard disks, parties should usually identify the relevant folders and sub-folders as modern operating systems usually establish a set of folders where documents are stored. This will obviate the necessity of searching a multitude of folders where operating system, application software, library and configuration files are stored. Second, parties have to agree on the time period during which the relevant documents were created or received. This will serve to exclude documents responsive to the search term but which are likely to be irrelevant. The time period may differ for different key words, repositories or custodians.

The search results are presumed to be relevant without the need for a further review of each document for relevance: Sanae Achar v Sci-Gen Ltd [2011] 3 SLR 967; [2011] SGHC 87, at [23].

Conducting discovery in stages will ameliorate the effects of the proliferation of copies and decentralisation of records. By focusing on the key custodians, the party giving discovery need not (at least initially) go beyond those persons who are likely also to be the key witnesses of fact at trial. As has been observed in Goodale & Ors v The Ministry of Justice & Ors [2009] EWHC B41 (QB), at [22]:

In terms of a search one should always start with the most important people at the top of the pyramid, that is, adopt a staged or incremental approach. Very often an opposing party will get everything they want from that without having to go down the pyramid any further, often into duplicate material.

It must be stressed that in conducting discovery in stages, it is open to parties to proceed with a subsequent stage involving other custodians and repositories after the conclusion of the initial stage. Subsequent stages will be conducted in the same manner as the initial stage: identification of additional custodians and repositories, drawing up search terms and agreeing on the limits for reasonable searches, etc. In the limited experience of this court, a subsequent stage has not been necessary in any case thus far. However, that is very different from saying that...