Computerland Corp v Yew Seng Computers Pte Ltd

• Jurisdiction: Singapore
• Judge: Lai Kew Chai J
• Judgment Date: 27 August 1991
• Neutral Citation: [1991] SGCA 28
• Date: 27 August 1991
• Subject Matter: Satisfaction of stringent requirements in Anton Piller's case,Principles and circumstances applicable to granting of order,Whether grave danger or real possibility of respondent destroying documents,Anton piller orders,Order to be granted in exceptional circumstances,Civil Procedure
• Docket Number: Civil Appeal No 54 of 1985
• Published date: 19 September 2003
• Defendant Counsel: Cheong Gay Eng (De Souza & Cheong)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Helen Yeo (Chor Pee & Co)

The appellants are a company incorporated in the State of California, United States of America, and carry on the business of a franchiser of computer system retail outlets under the business and franchise name, `Computerland`. They operate a `system franchise` which is to group all small outlets under one name and mark of `Computerland`, and make bulk purchases of computers and related products from manufacturers such as IBM, Apple and Compaq and resell them to their franchisees at bulk discounted prices. The respondents are a company incorporated in Singapore.

On 10 May 1979, the appellants and the respondents entered into a `system franchise` agreement (`the agreement`), whereby the appellants granted to the respondents, subject to the terms and conditions therein, the rights to operate a computer system retail outlet in Singapore under the name and mark of `Computerland` and using the logo, design, decor and business methods of `Computerland`. It is unnecessary to set out in any detail the terms and conditions of the agreement. Suffice it here to say that under the agreement, the respondents agreed to pay to the appellants a monthly royalty based on the respondents` gross revenue resulting from the operation of their store and also to pay to the appellants the products supplied by them at their cost plus a mark-up. The agreement required the respondents to keep accounts, to send periodic reports to the appellants and to allow the appellants access to the respondents` business and financial records and to allow an independent audit. Pursuant to the agreement, the resopened a store at Clifford Centre, Singapore in August 1979.

On 27 March 1984, and on several occasions thereafter, the appellants requested an audit to be carried out but the respondents refused. On 7 December 1984, the appellants sent to the respondents a notice of termination of the agreement. Following that, a telephone conversation between the appellants` chairman, William H Millard, and the respondents` managing director, Tan Kok Meng, took place, as a result of which the notice of termination was rescinded. Further discussions took place between other representatives of the appellants and Tan. Then on 14 March 1985, the appellants sent to the respondents a second termination notice setting out the breaches and notifying them that the default might be cured by the respondents paying the royalty due to the appellants arising from the reported sales and allowing a chartered accountant to enter and carry out an audit and investigation. Enclosed in the letter was an invoice for US$258,540 being an estimate by the appellants of the amount of royalty the respondents had underpaid arising from the respondents under-reporting sales. About ten days later, on 26 March 1985, the notice of termination was withdrawn after the appellants` representative, Michael A McConnell, spoke to Tan. The parties sought to come to an amicable settlement. However, at a meeting on 4 April 1985, Tan refused to agree to an independent audit or allow access to the accounts. It was said that Tan admitted that the respondents had under-reported sales but claimed that the respondents were justified in doing so because they had been overcharged by the appellants. Following the meeting, Tan despatched telexes to the appellants notifying them that the resintended to make certain claims against them and that the respondents would stop remitting further payto them. The appellants thereupon, by a letter dated 2 May 1985, gave notice to the respondents that the agreement had been terminated by the res` repudiation and that the appellants were therefore discharged from furth er performance of the agreement.

On 20 May 1985, the appellants took out a writ of summons against the respondents claiming that the respondents were in breach of the agreement in that they had under-reported sales, underpaid royalties due to the appellants, refused to give to the appellants financial information and access to accounts and refused to allow an audit of the accounts. On the same day, the appellants applied ex parte and obtained an Anton Piller order against the respondents permitting the appellants` representatives to enter the respondents` premises at three different locations, including the showroom at Clifford Centre, #02-20, and also an interim injunction restraining the respondents from using the `Computerland` name, mark, logo, slogan or any related or similar name and mark owned by the appellants. Subsequently, the appellants found that the respondents had another office at #17-02, Clifford Centre and, accordingly, on 23 May 1985, the appellants again applied ex parte and obtained an additional court order for leave to enter the respondents` premises at #17-02, Clifford Centre. The two Anton Piller orders were executed.

On 25 May 1985, the respondents took out an application to discharge the injunction and to obtain the return of all the documents and materials removed by the appellants from the respondents` places of business pursuant to the Anton Piller orders and for an order for assessment of damages. On 4 June 1985, the application was heard before Coomaraswamy J, and at the conclusion, he made an order suspending the injunction until 28 June 1985, when the appellants` motion for its continuation would he heard, and in respect of the documents obtained by the appellants pursuant to the Anton Piller orders he made a very comprehensive order which, so far as relevant, is as follows:

(2) (a) The plaintiffs do forthwith at their own expense return to the defendants at the location nominated by the defendants all documents or materials (the documents) taken from the various premises of the defendants pursuant to or in purported pursuant to para 2 of the order of court dated 20 may 1985 (the Yousif v Salama orders), such return to be completed by 12 noon on Thursday, 6 June 1985.

(b) All copies of any of the documents made by the plaintiffs` solicitors and now in the plaintiffs` solicitors` possession be delivered to the defendants` solicitors for destruction.

(c) Notwithstanding para 2(b) above, pending appeal by the plaintiffs against the whole of this order or any part thereof, all copies of any of the documents made by the plaintiffs` solicitors be sealed and delivered by 12 noon Thursday, 6 June 1985 to the defendants` solicitors on the defendants` solicitors undertaking to keep the document in safe custody and not to unseal the said documents or to destroy or part with the possession thereof until the disposal of the plaintiffs` appeal.

(d) The plaintiffs by their solicitors do destroy all copies of any of the documents which were not sealed up under sub-para 2(b) above due to inadvertence or any other reason whatsoever.

(k) There be an inquiry as to damages (if any) suffered by the defendants in the execution of the Yousif v Salama orders and that the plaintiffs do pay to the defensuch amount as shall be found to be due to the dein respect thereof as assessed by the Registrar of the Supreme Court, Singapore and the costs of such assessment.

(l) That the plaintiffs by its directors, officers, servants or agents or otherwise do make no further use whatsoever of any information contained in the documents or materials as the plaintiffs may have obtained.

Against the decision of the learned judge, the appellants appealed. Before the appeal was heard, certain supervening events had occurred. First, on 30 December 1985, the parties reached an agreement with regard to the use of the name `Computerland`, and in consequence there was no necessity for the appellants to pursue the application for a continuation of the injunction. Secondly, on 24 September 1986, the appellants, on an application before the assistant registrar, obtained a summary judgment against the respondents. The respondents appealed against the assistant registrar`s decision but the appeal was dismissed by Chan Sek Keong J on 23 April 1987. The respondents further appealed against the learned judge`s decision, but on the date of hearing on 23 January 1983 the appeal was withdrawn. Since then, the appellants have proceeded with the accounting proceedings pursuant to the summary judgment.

The appeal against Coomaraswamy J`s decision eventually came on for hearing before us, and at the conclusion we varied the order made by the learned judge to the extent as follows: (i) that the documents delivered by the appellants` solicitors to the respondents` solicitors and retained by the latter ought not to be destroyed but be retained for the purpose of discovery in the accounting proceedings pursuant to the summary judgment, and (ii) that there be no inquiry as to damages and accordingly para 2(k) of the order was set aside. As for costs, we allowed half of the costs of the appeal to the respondents. We now give our reasons.

The learned judge referred to the two Anton Piller orders as ` Yousif v Salama ` orders - the name was derived from the case of Yousif v Salama [1980] 1 WLR 1540; [1980] 3 All ER 405. Counsel for the appellants relied on that case and submitted that the appellants had satisfied the requirements for granting an Anton Piller order. We rejected this argument. In Yousif v Salama , an agreement was made between the plaintiff and the two defendants whereby the plaintiff was to procure certain business to be placed with the second defendant, a company owned and controlled by the first defendant, and the commission due to the second defendant on such business was to be shared between him and the defendants. Several transactions took place over a period of two years and a statement of account was rendered by the defendants showing the sum due to the plaintiff. Business then continued. In March 1980, the plaintiff went with the first defendant to the second defendant`s office and went through the accounts. Two files were produced containing various documents; so also was a...