Deutsche Bank AG v Chang Tse Wen and others

• Jurisdiction: Singapore
• Judge: Yeong Zee Kin SAR
• Judgment Date: 26 April 2010
• Neutral Citation: [2010] SGHC 125
• Court: High Court (Singapore)
• Docket Number: Suit No 731 of 2009 (Summons No 1188 of 2010)
• Year: 2010
• Published date: 16 July 2010
• Hearing Date: 19 April 2010,08 April 2010
• Plaintiff Counsel: Ms Tan Xeauwei and Ramesh Kumar (Allen & Gledhill LLP)
• Defendant Counsel: K Muralidharan Pillai and Julian Soong (Rajah & Tann LLP)
• Subject Matter: Civil Procedure,Discovery of documents,Electronic discovery,Practice Direction No 3 of 2009,Electronic discovery protocol,good faith collaboration,Opt-in framework,Who to apply,whether necessary to order,Consideration of factors in paragraph 43D,Disclosure of documents,Reasonable search,Key words,Discovery in stages,Providing electronic copies of electronically stored documents in lieu of inspection
• Citation: [2010] SGHC 125

Yeong Zee Kin SAR:

This is an application by the Defendant under Practice Direction No 3 of 2009 (“PD 3/2009”) for an order that parties comply with an electronic discovery protocol when general discovery of documents is given in this case. The Plaintiff’s objections to this application may be summarised in the following manner: First, PD 3/2009 applies during general discovery only where parties have agreed to adopt an electronic discovery protocol and allows parties to refer any disputes over terms in the protocol to the court for resolution. Since parties in this case have not agreed to adopt an electronic discovery protocol for the purposes of general discovery, there is no basis for this application. Further, the Plaintiff objects to adoption of such a protocol as it would unfairly prejudice them since they are ready to proceed with general discovery by providing a list of documents and photocopies of documents disclosed in the list in the traditional manner.

Procedural history

The underlying claims in this matter may be summarised as follows. The Defendant was a customer of the Plaintiff bank. The Defendant owes about USD 1.8 million under a loan facility granted by the Plaintiff. The Plaintiff commenced action by writ filed on 27 August 2009 and sued for recovery of the outstanding sums under the loan facility. In its defence and counterclaim filed on 2 September 2009, the Defendant counterclaimed against the Plaintiff and (in an amendment filed on 3 November 2009) its employee, the Plaintiff’s former relationship manager, for misrepresentation and breaches of fiduciary duties and duties of skill and care. The Plaintiff’s reply and defence to counterclaim was filed on 19 October 2010.

The issue of electronic discovery was first raised by the Defendant during pre-trial conference (“PTC”) on 23 October 2009. The court’s record shows that Defendant’s solicitors had suggested that parties proceed with electronic discovery in this case and sought directions for parties to discuss and agree to an electronic discovery protocol. Plaintiff’s solicitors are recorded to have said that they did not think that electronic discovery was necessary and they would need to take instructions on this matter. The court directed that parties update the court during the next PTC as to whether parties are amenable to proceeding with electronic discovery. Further, directions were given for lists of documents to be exchanged by 29 January 2010 and for inspection to be completed by 26 February 2010.

Subsequent to this, there were telephone discussions between counsel on 5 and 6 January 2010, ahead of the PTC on 8 January 2010. There is some dispute over the content of the telephone discussions. The Defendant’s solicitors’ account is that they raised again the issue of electronic discovery during these telephone discussions and sought opposing solicitors’ agreement to defer electronic discovery issues to a subsequent PTC to be fixed before me. The Plaintiff’s solicitors’ recollection is that the discussions focused mainly on agreeing to an adjournment of the 8 January 2010 PTC as there were pending interlocutory applications at that time. A PTC briefing note tendered by the Defendant’s solicitors during PTC on 8 January 2010, which is as near to a contemporaneous record of these telephone discussions as is available to me, records that the Defendant’s solicitors had broached the issue of electronic discovery during these telephone conversations and sought to have a PTC fixed before me to explore how parties may collaborate on electronic discovery issues in accordance with PD 3/2009. It is also recorded that the Plaintiff’s solicitors communicated their view that there is no scope for discussion and they would object to moving the PTC; further, they had requested that a formal application for electronic discovery be made.

The PTC on 8 January 2010 dealt mainly with pending interlocutory matters and an interlocutory appeal. During this PTC, pending discovery directions were ordered to be held in abeyance as parties were directed to make a decision as to whether they would proceed with electronic discovery under PD 3/2009. In particular, the Defendant was directed to write to the Plaintiff with a proposed electronic discovery protocol by 22 January 2010 and the Plaintiff was directed to reply by 5 February 2010. The Defendant was further directed to write in by 12 February 2010 to request for a PTC to be fixed before me if they wish to discuss electronic discovery issues.

Eventually, several PTCs were held on 18 February, 3 and 8 March 2010 before me to explore the possibility of adopting an electronic discovery protocol for the conduct of general discovery. Parties were not able to agree, hence this application before me.

Outline of issues

During submissions, the following issues were raised. First, whether PD 3/2009 applies in a situation where parties had not reached an agreement to adopt an electronic discovery protocol during general discovery; in other words, whether PD 3 2/2009 applies during general discovery only if parties have already agreed to adopt an electronic discovery protocol but were not able to agree on some of its terms subsequently.

Second, whether an order should be made in this case for an electronic discovery protocol to be adopted when the Plaintiff is ready to provide general discovery by giving photocopies of documents disclosed in its list of documents (which, though not filed, is ready to be filed). Was there any delay on the part of the Defendants that makes the adoption of an electronic discovery protocol during general discovery unnecessary in this case for the fair disposal of this matter or for saving costs?

Third, if parties are to comply with an electronic discovery protocol for general discovery, should the Plaintiff be required to provide the categories of documents described as well as conduct a reasonable search based on the key words set out in Part I of the draft electronic discovery protocol. I shall now deal with these issues in turn.

Applicability of PD 3/2009

The Plaintiff’s preliminary objection to this application is that PD 3/2009 does not apply to a situation where parties have not reached a prior agreement to adopt an electronic discovery protocol during general discovery. The Plaintiff argues that the opt-in nature of PD 3/2009 means that, insofar as its applicability during general discovery is concerned, both parties must first agree to adopt an electronic discovery protocol before PD 3/2009 applies during general discovery. This argument turns on a construction of PD 3/2009 that, stated briefly, amounted to the following: (a) During general discovery, paragraph 43B of PD 3/2009 applies initially when parties discuss whether to adopt an electronic discovery protocol. If parties are able to agree to adopt one, but they are unable to agree on some of the terms in the protocol under discussion, then an application may be made under paragraph 43B(3). (b) If, however, parties are unable to reach an agreement whether to adopt an electronic discovery protocol for the purposes of general discovery, paragraph 43B of PD 3/2009 ceases to be applicable such that the party seeking electronic discovery may not make an application under paragraph 43B(3). In such circumstances, general discovery should be conducted in the classical style where documents are disclosed in a list of documents, inspection given of hard copies and photocopies of discoverable documents provided. Under this construction, the Plaintiff argues that PD 3/2009 is only applicable after general discovery: in other words, paragraph 43B is not applicable but paragraph 43C, et seq are applicable to requests for further discovery or specific discovery.

The Defendant’s argument is that the court has extensive powers to order compliance with protocol during discovery. This is either part of the court’s inherent powers (preserved under Order 92, rule 4) or derived from the specific provisions in Order 34A, which is the source of the court’s powers to make appropriate directions for the just, expeditious and economical disposal of a matter. Counsel cites the cases of Alliance Management SA v Pendleton Lane P and another and another suit [2007] 4 SLR(R) 343 and Fermin Aldabe v Standard Chartered Bank [2009] SGHC 194 as authorities for his proposition that the courts have the power to order discovery of electronic documents and in so doing, order that parties comply with a protocol. Both of these cases were decided before PD 3/2009 came into effect.

The Plaintiff’s preliminary objection arises from the construction of the phrase “If parties are unable to agree on an electronic discovery protocol” in paragraph 43B of PD 3/2009. The Plaintiff seeks a construction of this phrase to mean “If parties having agreed to adopt an electronic discovery protocol are unable to agree on some of the terms in the electronic discovery protocol”. The Plaintiff argues that this gives effect to the opt-in nature of PD 3/2009: in other words, both parties must agree to opt-in before PD 3/2009 applies. The Defendant seeks a broader construction for this phrase to include both situations where parties are unable to agree to adopt an electronic discovery protocol or, having agreed to adopt one, there are disputes over some of its terms. Under this construction, the opt-in framework operates either by agreement of parties or when one party (in this case the Defendant) opts into PD 3/2009 by making an application thereunder.

In determining the proper construction to be adopted, it is necessary to commence with an appreciation of the nature of practice directions. I can do no better than to quote Professor Jeffrey Pinsler’s Singapore Court Practice (2003 Edition), at § 1/1/6, on the role and function of practice directions:

… practice directions issued by the courts have a fundamental role in...