Scott Tan AR:
Introduction
This is the Plaintiff’s application for specific discovery of 11 categories of documents (the “requested documents”) under O 24 r 5 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“the Rules”). This application arises from Suit No 17 of 2017 (“the present suit”), wherein the Plaintiff claims that the affairs of the 4th Defendant company have been conducted in a manner which is oppressive of and/or prejudicial to its interests as a minority shareholder. Among other things, the Plaintiff has sought discovery of the 4th Defendant’s internal documents, including correspondence passing between the 4th Defendant’s directors. The 2nd and 3rd Defendants, who are both directors of the 4th Defendant, are husband and wife and they have argued that the correspondence passing between them are protected from disclosure by virtue of the doctrine of marital communications privilege.
If accepted, this claim to privilege would be a complete answer to a large part of the Plaintiff’s requests. It is for this reason that the Plaintiff sought to argue that marital communications privilege does not apply here. Its argument is two-fold. First, it submits that the privilege extends only to communications which “would not have been the subject of discussion but for the existence of the marital relation between the husband and wife” [emphasis added] and therefore does not cover communications relating to business matters. Secondly, and in the alternative, it argues that because most of the correspondence (which took the form of emails) passed through the servers of the 4th Defendant, it is entitled to have discovery of the correspondence from the 4th Defendant, even if it cannot not obtain it directly from the 2nd and 3rd Defendants. The crux of this alternative argument is the Plaintiff’s claim that marital communications privilege only protects persons from being forced to testify against their spouses but does not prevent an applicant from seeking discovery of communications that have fallen into the hands of a third party.
As against this, the Defendants have submitted that the doctrine of marital communications privilege is not so limited and extends to “all communications made throughout the duration of the marriage”, including those relating only to matters of business [emphasis in original omitted]. For this reason, they urged me to reject both of the Plaintiff’s arguments. They take issue, in particular, with the Plaintiff’s alternative argument, which they argue would have the effect of driving a coach and horses through the doctrine of marital communications privilege since the majority of communications today pass through servers in respect of which third parties could have access.
As the present application raised questions concerning the ambit of marital communications privilege which, as far as I am aware, are matters of first impression in Singapore, I reserved judgment. I now give my decision.
Background
The Plaintiff, EQ Capital Investments Limited (“EQ Capital”), is a company incorporated in the British Virgin Islands (“BVI”) and it is an investment company of which Mr Ron Sim Chye Hock (“Mr Ron Sim”) is the ultimate sole beneficial owner. EQ Capital was at all material times a minority shareholder in the 4th Defendant, The Wellness Group Pte Ltd (“Wellness”), which is a Singapore incorporated company that is in the health and wellness business. Wellness has three directors: the 2nd Defendant, Mr Manoj Mohan Murjani (“Mr Murjani”); the 3rd Defendant, Mrs Kanchan Manoj Murjani (“Mrs Murjani”); and Dr Finian Tan. Mr and Mrs Murjani are married and they are, in addition to being directors of Wellness, also directors of the 1st Defendant, Sunbreeze Group Investments Limited (“Sunbreeze”), a BVI incorporated company which is the majority shareholder of Wellness.
The present suit is intimately related to matters that formed the subject matter of Suits No 187 and 545 of 2014 (which I shall refer to as “Suit 187” and “Suit 545” respectively). Broadly summarised, Suits 187 and 545 arose from disagreements between Mr Murjani and Mr Ron Sim (and the companies of which they were the principals, Wellness and OSIM International Limited (“OSIM”)) over the operations of The TWG Tea Company Pte Ltd (“TWG Tea”). TWG Tea is a Singapore incorporated company that sells luxury teas which both Wellness and OSIM have a stake in. The plaintiffs in both suits were Wellness and Mr Murjani and they brought claims for minority oppression, conspiracy, breach of contract, and defamation. OSIM and Mr Ron Sim were named as defendants in both suits and they, together with the rest of the defendants in Suit 187 (save for TWG Tea), brought a counterclaim against Wellness and Mr Murjani for defamation. On 22 April 2016, Chua Lee Ming JC (as he then was) dismissed both the plaintiffs’ claims as well as the defendants’ counterclaim (see The Wellness Group Pte Ltd and another v OSIM International Ltd and others and another suit [2016] 3 SLR 729) (“Wellness v OSIM”). Wellness’s appeal against the dismissal of its claims in Suit 187 was dismissed by the Court of Appeal on 25 October 2016.
It is not necessary to delve into the details of Suits 187 and 545 in any greater level of detail than this save to say that many of the findings made by Chua JC in Wellness v OSIM form the factual substratum of the present suit. Shortly after Wellness’s appeal was dismissed, EQ Capital, which was not party to either of the two actions, commenced the present suit. In its statement of claim (“SOC”), EQ Capital states clearly that it does not seek any substantive reliefs against Wellness itself, which is present only as a nominal defendant. Instead, its grievances are against Sunbreeze, Mr Murjani, and Mrs Murjani (whom I shall refer to collectively as “the Defendants”).
Summary of pleadings and the procedural history
EQ Capital filed its SOC on 10 January 2017. Its claim in minority oppression is founded on four principal complaints: First, it pleads that Mr and Mrs Murjani had wrongfully caused Wellness to breach its contractual and statutory duties to (i) convene annual general meetings (“AGMs”); (ii) prepare and file annual audited accounts; (iii) lay these audited accounts before Wellness’s shareholders; (iv) send notices of its general meetings and copies of the reports prepared by its auditors to EQ Capital; and (v) file Wellness’s annual returns with the Registrar of Companies. Secondly, it pleads that the Defendants had caused Wellness’s shareholding in TWG Tea to be diluted twice, to the prejudice of its interest as minority shareholder of Wellness: The first dilution took place because Mr Murjani had mismanaged the affairs of TWG Tea while he was its director (and Wellness’s representative on its board) by presenting profit projections which he knew to be unreliable and unsupported to OSIM at the time OSIM was negotiating the terms of its investment in TWG Tea. This effect of this was that OSIM was able – when the profits of TWG Tea came well below Mr Murjani’s projections – to invoke the “profit swing clause” in its share and purchase agreement, allowing it acquire 8.4% of Wellness’s shares in TWG Tea for nominal consideration. The second dilution took place when Mr and Mrs Murjani (in their capacities as directors of Wellness) failed to take steps to have Wellness subscribe to a rights issue announced by TWG Tea in November 2013 (“Rights Issue”) despite being prompted to do so. As a result, Wellness’s shareholding in TWG Tea further decreased from 46.3% to 30.1%. Thirdly, it pleads that Mr and Mrs Murjani had given up Wellness’s “fundamental right” to be represented on the board of TWG Tea when they elected not to appoint another person to replace Mr Murjani after he resigned as a director of TWG Tea in September 2012. Lastly, it pleads that Mr and Mrs Murjani had wrongfully exposed Wellness to liability by causing it to commence Suit 187 when they knew or ought to have known that the proceedings were unmeritorious. As a result, Wellness was subjected to a range of liabilities, including adverse costs orders.
The Defence was first filed on 7 February 2017 and amended on 29 June 2017. In it, the Defendants deny that the EQ Capital is entitled to the reliefs which it seeks for two broad reasons. First, they aver that EQ Capital, which they claim is but the alter ego of Mr Ron Sim, has not suffered any loss or damage. Secondly, they say that even if there were any wrongdoing on the part of the Defendants, EQ Capital is not the proper party and has no standing to commence this action on behalf of Wellness. In response to the various complaints raised by EQ Capital, they plead that: Mr and Mrs Murjani had not caused Wellness to breach its contractual and statutory duties to its shareholders. In this regard, they specifically plead that Mr Ron Sim and OSIM (which they also say is the alter ego of Mr Ron Sim) had deliberately delayed the finalisation of the audited accounts of TWG Tea for the financial year (“FY”) ending 31 March 2011, thereby also delaying the finalisation of the accounts of Wellness for FY 2011 and 2012. Mr Murjani honestly and reasonably believed that the profit projections he presented were realistic. In any event, when viewed through a wider lens, Mr Ron Sim (and, therefore, EQ Capital) had benefitted from the exercise of the Profit Swing Clause since OSIM had increased its shareholding in Wellness significantly and is therefore not entitled to complain about the exercise of the Profit Swing Clause. Mr Ron Sim had deliberately engineered the Rights Issue as a form of minority oppression to dilute Wellness’s shareholding in TWG Tea. From Wellness’s perspective, the Rights Issue was problematic because (i) inadequate notice was given of the extraordinary general meeting at which it was approved; (ii) its legitimate concerns were not addressed; and (iii)...
