Hai Jiao 1306 Ltd v Yaw Chee Siew

• Jurisdiction: Singapore
• Judge: Kannan Ramesh J
• Judgment Date: 21 February 2020
• Date: 21 February 2020
• Docket Number: Suits Nos 7 to 9 of 2018 (Summons No 49 of 2019)
• Court: High Court (Singapore)

Hai Jiao 1306 Ltd and others

and

Yaw Chee Siew

[2020] SGHC(I) 3

Kannan Ramesh J

Suits Nos 7 to 9 of 2018 (Summons No 49 of 2019)

Singapore International Commercial Court

Civil Procedure — Discovery of documents — Adverse inference — Defendant breaching discovery obligations — Whether unless order should be made

Held, making the relevant orders:

(1) The court found on 30 September 2019 that the defendant's breaches of ORC 38/2019 were wide-ranging and egregious. One such breach pertained to two e-mail accounts he had at Perdana. The defendant argued for the first time that the information in these two e-mail accounts were not within his power such that he could not give discovery without Perdana's permission. The court held that the argument that the e-mail accounts were not in his possession, custody or power was not open to the defendant, as one of the e-mail accounts had been specifically referred to in ORC 38/2019. Any argument as to possession, custody or power ought to have been made then at the very least, if not even earlier when the eDiscovery Order had been made. ORC 38/2019, and indeed the eDiscovery Order, had been made on the basis that that e-mail account was in the defendant's possession, custody or power. This being the case, the defendant's other e-mail account at Perdana would be similarly regarded: at [43] to [45] and [48].

(2) In any event, the court found that the evidence showed the defendant did have power over the e-mail accounts at Perdana. The defendant had an unfettered right and the practical ability to access the e-mail accounts. The affidavits that had been filed did not present any basis to conclude that Perdana's permission was necessary or would be refused. The defendant's position that his solicitors had not received any response from Perdana on the request to give discovery of the e-mail accounts at Perdana was difficult to believe. Also, the various discovery orders had been made against the defendant personally, and it was for him to procure any approvals that might be necessary as a matter of corporate policy. The suggestion that he did not have the authority in Perdana to procure such access was not believable given that he was executive chairman and Perdana was effectively a family owned business. The failure to disclose the documents contained in the e-mail accounts at Perdana was therefore one way in which the defendant had breached his discovery obligations: at [46] and [47].

(3) ORC 38/2019 also required the defendant to provide discovery of the Apple Mac Desktop computer in his office. He claimed that he had no recollection of this computer, which was not in his possession. This was not satisfactory as it had been incumbent on the defendant to take reasonable steps to locate the device: at [28] and [42(d)].

(4) On 30 September 2019, the court ordered (“ORC 51/2019”) that the defendant state on affidavit the steps taken to locate or obtain the repositories no longer in his possession, custody and/or control. These included the Apple Mac Desktop computer as well as an “Apple-Mac computer using the operating system OS X 10.10”. Further, in respect of eight specified repositories or categories of documents, including the e-mail accounts at Perdana, the defendant was ordered to provide discovery by 7 October 2019. No order was made on the consequences of non-compliance at this point: at [49] and [50].

(5) The defendant subsequently filed an affidavit detailing the steps that had been taken to comply with ORC 51/2019. He stated that the Apple Mac Desktop in his office and the “Apple-Mac computer using the operating system OS X 10.10” were the same device (“the Apple Mac Desktop computer”), which was located in his office at Perdana. The letter sent by his solicitors to the CEO of Perdana only sought approval to provide discovery of the e-mail accounts at Perdana and not of the Apple Mac Desktop computer. The defendant was therefore clearly in breach of ORC 51/2019: at [51] and [52].

(6) By the 10 October 2019 hearing, with the exception of the e-mail accounts at Perdana, the Apple Mac Desktop computer and two other repositories, the remaining repositories had been provided to PricewaterhouseCoopers Malaysia, who had been retained by the defendant for the purpose of retrieving the documents using the search protocol. The defendant maintained that the e-mail accounts at Perdana could not be disclosed because Perdana had not allowed him to. The defendant relied on a letter from Perdana's counsel stating that the board had decided that it could not agree to the defendant's “request” for access to Perdana's e-mail servers and repositories. Counsel for the defendant accepted at the hearing that the defendant could in fact access the e-mail accounts and provide disclosure, and was simply concerned about potential liability if he did so. The main difficulty was that, by this point, multiple orders had been made requiring that discovery be provided of the electronically stored documents in the e-mail accounts at Perdana. The defendant was therefore estopped from making the argument that the e-mail accounts at Perdana were not in his possession, custody or control. The same analysis would also apply to the Apple Mac Desktop computer as it was located in the defendant's office at Perdana: at [20] and [53] to [55].

(7) The court ordered that the defendant comply with ORC 51/2019 by 15 October 2019, save for the e-mail accounts at Perdana and the Apple Mac Desktop computer (“the repositories with Perdana”), in relation to which the defendant was given until 18 October 2019 to comply. The court accepted that the information contained in the repositories with Perdana would be relevant to the efforts made by the defendant to obtain the mortgage over the Hotel. The defendant's efforts to procure the mortgage over the Hotel was a significant facet of the case and a proportionate consequence should the defendant fail to provide discovery of the information in the repositories with Perdana would be for an adverse inference to be drawn against him. The adverse inference to be drawn would be that the defendant failed to exercise his best endeavours to procure the mortgage over the Hotel in favour of the plaintiffs, and that, but for such failure, the mortgage would have been procured. The consequential inference was that such failure had occasioned loss and damage to the plaintiffs: at [56], [58] and [59].

Case(s) referred to

Alliance Management SA v Pendleton Lane P [2008] 4 SLR(R) 1; [2008] 4 SLR 1 (refd)

Dirak Asia Pte Ltd v Chew Hua Kok [2013] SGHCR 1 (refd)

Mitora Pte Ltd v Agritrade International (Pte) Ltd [2013] 3 SLR 1179 (folld)

Zhong Da Chemical Development Co Ltd v Lanco Industries Ltd [2009] 3 SLR(R) 1017; [2009] 3 SLR 1017 (refd)

Facts

The first to third plaintiffs are the registered owners of three vessels, each of which was chartered under a bareboat charter agreement. Corporate guarantees were issued by Otto Marine Limited (“OML”) in favour of the second and third plaintiffs, guaranteeing as primary obligor the due and punctual performance by the charterer of the relevant vessels of its obligations under the bareboat charterparties. A guarantee was also issued in favour of the first plaintiff by OML and Go Marine Group Pty Ltd. The charterers are related entities of OML and Go Marine Group Pty Ltd. Subsequently, the defendant executed two sets of letters of support, under which he agreed to use best endeavours to procure the performance of the obligations under the bareboat charter agreements and the guarantees. The charterers were obliged to deliver evidence satisfactory to the plaintiffs that a valid mortgage or charge over a hotel in Bintulu, East Malaysia (“the Hotel”) had been granted and registered in favour of the plaintiffs. The plaintiffs claimed that the defendant failed to take any steps, or alternatively, to exercise best endeavours to ensure that the charterers provided satisfactory evidence that such a mortgage had been registered in the plaintiffs' favour. On the other hand, the defendant asserted that he had exercised his best endeavours to persuade the owner of the Hotel to effect a mortgage over it in favour of the plaintiffs, but was unsuccessful in doing so. The plaintiffs' case was that the Hotel was indirectly owned by a company related to Perdana ParkCity Sdn Bhd (“Perdana”). The defendant was the executive chairman of Perdana, which was a subsidiary of Yaw Holding Sdn Bhd, a company substantially owned by the defendant's family members. The defendant's cousin was the chief executive officer (“CEO”) of Perdana.

The plaintiffs applied for a peremptory order arising from the defendant's failure to comply with Order of Court dated 18 July 2019 (“ORC 38/2019”). ORC 38/2019 was made in an earlier application by the plaintiffs for a peremptory order against the defendant for the latter's non-compliance with his obligation to give e-discovery pursuant to an order made on 17 April 2019 (“the eDiscovery Order”). The eDiscovery Order required the defendant to give specific discovery of electronically stored documents contained in a defined list of electronic repositories, including the defendant's personal and work e-mail accounts. The search of the repositories was to be done using a search protocol which contained a list of specified search terms. The search terms included, inter alia, terms that were identified with a view to retrieving from the defendant's repositories, including his e-mail accounts at Perdana, information related to the mortgage over the Hotel.

The defendant was ordered to provide discovery in compliance with the eDiscovery Order by 2 May 2019, but failed to do so. Subsequently, despite the defendant's multiple requests for extensions of time, and the confirmations he provided both on affidavit and through his counsel that he had in fact complied with his eDiscovery obligations, it became apparent that he had not done so...