Haywood Management Ltd v Eagle Aero Technology Pte Ltd

JurisdictionSingapore
Judgment Date19 August 2014
Date19 August 2014
Docket NumberOriginating Summons No 1055 of 2013 (Registrar's Appeal No 34 of 2014)
CourtHigh Court (Singapore)
Haywood Management Ltd
Plaintiff
and
Eagle Aero Technology Pte Ltd
Defendant

Tay Yong Kwang J

Originating Summons No 1055 of 2013 (Registrar's Appeal No 34 of 2014)

High Court

Civil Procedure—Discovery of documents—Pre-action discovery—Appellant asserting that respondent having sufficient information to plead its case and commence proceedings—Whether pre-action discovery necessary

Civil Procedure—Discovery of documents—Pre-action discovery—Appellant resisting application for pre-action discovery on basis of confidentiality obligations owed to other parties—Whether confidentiality obligations determinative—Principles governing objections to pre-action discovery on ground of confidentiality obligations

Civil Procedure—Interrogatories—Pre-action interrogatories—Information in documents ordered to be disclosed overlapping with information sought in request for pre-action interrogatories—Whether pre-action interrogatories necessary at this stage of dispute

The respondent, Haywood Management Limited (‘Haywood’), had an arrangement with Global Naval Systems Pte Ltd (‘GNS’), a wholly-owned subsidiary of the Lurssen Group, to broker the sale of three multi-role light frigates (‘the MRLFs’) belonging to Royal Brunei Technical Services Sendirian Berhad. Pursuant to this arrangement, Haywood extended a loan to GNS and both parties executed an ‘Amended and Restated Loan Agreement’ (‘ARLA’), where the amount GNS had to repay Haywood was determined by, inter alia, the price at which the MRLFs were sold.

Subsequently, Fr Lurssen Werft Gmb H & Co G (‘FLW’), another company belonging to the Lurssen Group, obtained title in the MRLFs. Both GNS and FLW entered into negotiations with the Ministry of Defence of the Republic of Indonesia (‘MOD’) over the potential sale of the MRLFs. It was eventually agreed that the transaction would be structured as a sale of the MRLFs from FLW to the appellant, Eagle Aero Technology Pte Ltd (‘EAT’), another entity belonging to the Lurssen Group, followed by a back-to-back sale of the MRLFs from EAT to MOD. Later, Haywood came across an Indonesian media report which stated that the MRLFs would be sold to MOD for a price of US$385 m.

Haywood was subsequently informed by GNS that the sale price of the MRLFs from FLW to EAT was only US$170 m, a decrease of US$215 m from the US$385 m mentioned in the media report. Haywood suspected that EAT and the other entities in the Lurssen Group, such as FLW and GNS, had conspired with one another to artificially depress the sale price of the MRLFs in order to reduce GNS' repayment obligations under the ARLA.

Haywood proceeded to apply for pre-action interrogatories and discovery against EAT in contemplation of an action in conspiracy and/or fraud to be commenced by Haywood against EAT and other parties. EAT resisted the application on three main grounds. First, it was argued that pre-action discovery was unnecessary as Haywood already had sufficient information to plead its case and commence proceedings. Second, EAT submitted that any disclosure of the information sought by Haywood would result in a breach of confidentiality obligations owed by EAT to other parties such as MOD. Third, it was argued that the application for pre-action disclosure by Haywood was an attempt to circumvent the arbitration clause in the ARLA.

The learned assistant registrar (‘the AR’) rejected most of EAT's arguments and granted Haywood's application in part. Dissatisfied with the outcome, EAT filed an appeal against the AR's decision.

Held, dismissing the appeal:

(1) On one end of the spectrum, there were cases where the applicant for pre-action discovery already had sufficient information to plead its case and commence proceedings. On the other end, there were applications which were so frivolous or speculative in nature that the applicant should not be allowed to invade the documentary domain of the defendant. To successfully obtain an order for pre-action discovery, the applicant had to fall somewhere in the middle ground, where it did not know whether it had a viable claim and thus required pre-action discovery to fill the gaps in its knowledge: at [40] .

(2) Haywood was not privy to the negotiations and the details relating to how the deal was eventually concluded. It only had access to the draft documents, as opposed to the final executed contracts. The documents sought by Haywood were therefore necessary to fill the gaps in its knowledge: at [44] and [46] to [48] .

(3) When confidentiality obligations were relied upon to resist an application for pre-action discovery, the court had to balance the interests of the applicant against those of the defendant. A multi-factorial approach had to be adopted to determine if the interests of justice necessitate the disclosure by the defendant in spite of its confidentiality obligations: at [56] and [57] .

(4) Contractual obligations of confidentiality could not be determinative of whether pre-action discovery should be granted as that might give rise to potential abuse. Contracting parties might deliberately incorporate confidentiality clauses or enter into confidentiality agreements for the sole purpose of avoiding downstream discovery obligations. Contractual obligations of confidentiality were but one factor to be considered in ascertaining where the interests of justice lie: at [55] .

(5) In the context of pre-action discovery, the court was entitled to take into account the principle laid down in Riddick v Thames Board Mills Ltd[1977] QB 881 that the applicant was legally obliged not to use the disclosed documents for any extraneous purpose. Contempt proceedings or injunctive relief could be taken out in the event of such extraneous usage: at [57] and [59] .

(6) In opposing an application for discovery on the ground of confidentiality, the defendant had to establish: first, the existence of the confidentiality obligations; and second, that the information sought to be disclosed fell within the scope of those obligations. If the defendant claimed confidentiality over the very document giving rise to the confidentiality obligations, a redacted copy of the document should, at the very least, be placed before the court: at [61] .

(7) When documents sought to be disclosed incorporate both confidential and non-confidential information, the disclosure of redacted copies was a possible way to strike a balance between the defendant's interest in maintaining its confidentiality obligations and the applicant's interest in ascertaining whether it had a viable cause of action: at [63] and [64] .

(8) There was no attempt by EAT to provide redacted copies of the relevant documents. Allowing potential defendants such as EAT to avoid having to disclose any documents on the basis of such wide-ranging and unqualified claims of confidentiality would amount to a complete denial of the public interest in discovering the truth in order that justice might be done between the parties. Coupled with the fact that Haywood would be bound by the Riddick principle, it was in the interests of justice that EAT should be compelled to disclose the requested documents: at [64] and [65] .

(9) Haywood did not have any prior contractual relationship with EAT. The arbitration clause in the ARLA entered into between Haywood and GNS was therefore inapplicable to EAT: at [66] and [68] .

(10) There was a significant overlap between the documents ordered to be disclosed pursuant to the AR's order and the information sought in Haywood's request for interrogatories. The administration of interrogatories was therefore not necessary at this stage of the dispute: at [71] .

Bayerische Hypo- und Vereinsbank AG v Asia Pacific Breweries (Singapore) Pte Ltd [2004] 4 SLR (R) 39; [2004] 4 SLR 39 (refd)

Beckkett Pte Ltd v Deutsche Bank AG Singapore Branch [2003] 1 SLR (R) 321; [2003] 1 SLR 321 (refd)

Ching Mun Fong v Standard Chartered Bank [2012] 4 SLR 185 (folld)

Dorsey James Michael v World Sport Group Pte Ltd [2014] 2 SLR 208 (folld)

KLW Holdings Ltd v Singapore Press Holdings Ltd [2002] 2 SLR (R) 477; [2002] 4 SLR 417 (refd)

Kuah Kok Kim v Ernst & Young [1996] 1 SLR (R) 478; [1996] 2 SLR 364, HC (refd)

Kuah Kok Kim v Ernst & Young [1996] 3 SLR (R) 485; [1997] 1 SLR 169, CA (folld)

Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd [2010] 1 SLR 25 (folld)

Odex Pte Ltd v Pacific Internet Ltd [2008] 3 SLR (R) 18; [2008] 3 SLR 18 (refd)

Riddick v Thames Board Mills Ltd [1977] QB 881 (refd)

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 24 r 6 (3) (a) , O 26 A r 2

Andy Lem, Toh Wei Yi and Zack Quek (Harry Elias Partnership LLP) for theappellant

Kristy Tan and Toh Jia Yi (Allen & Gledhill LLP) for the respondent.

Tay Yong Kwang J

Introduction

1 This appeal arises from an application by the respondent, Haywood Management Limited (‘Haywood’), for pre-action interrogatories and discovery against the appellant, Eagle Aero Technology Pte Ltd (‘EAT’), in contemplation of an action in conspiracy and/or fraud to be commenced by Haywood against EAT and other parties. The application by Haywood was granted in part by the learned assistant registrar (‘the AR’) on 23 January 2014 and EAT subsequently filed an appeal against the AR's decision. I dismissed EAT's appeal with respect to the AR's order as to pre-action discovery. With regard to the pre-action interrogatories, I declined to make any order for the time being and instead gave Haywood liberty to restore the application should EAT fail to comply adequately with its discovery obligations. EAT has since filed an appeal against my decision and I now set out the grounds for my decision.

The facts

Background facts

2 The present dispute arises from the sale of three multi-role light frigates (‘the MRLFs’) which were initially owned by the Royal Brunei Technical Services Sendirian Berhad (‘RBTS’). At the outset, it is...

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3 cases
  • Intas Pharmaceuticals Ltd v DealStreetAsia Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 10 April 2017
    ...in favour of maintaining or compromising such confidentiality obligations (see Haywood Management Ltd v Eagle Aero Technology Pte Ltd [2014] 4 SLR 478 (“Haywood”) at [56]–[57]). Is pre-action disclosure of the Communications and/or identity of the Sources necessary for the First The Communi......
  • ED&F Man Capital Markets Ltd v Straits (Singapore) Pte Ltd
    • Singapore
    • Court of Appeal (Singapore)
    • 6 July 2020
    ...before us, Mr Toh cited the decision of Tay Yong Kwang J (as he then was) in Haywood Management Ltd v Eagle Aero Technology Pte Ltd [2014] 4 SLR 478 (“Haywood”) as authority for the proposition that the Riddick principle can apply to pre-action disclosure. Haywood involved an application fo......
  • Absolute Kinetics Consultancy Pte Ltd v Seah Yong Wah (Singapore Telecommunications Ltd, non-party)
    • Singapore
    • High Court (Singapore)
    • 14 January 2019
    ...(see [14] above). Both parties referred to the High Court’s decision in Haywood Management Ltd v Eagle Aero Technology Pte Ltd [2014] 4 SLR 478 (“Haywood”). Haywood was a case relating to, among other things, pre-action disclosure, but there is no reason why the principles enunciated therei......
1 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2014, December 2014
    • 1 December 2014
    ...the fifth defendant the costs of the application. Pre-action discovery 8.37 In Haywood Management Ltd v Eagle Aero Technology Pte Ltd[2014] 4 SLR 478, the High Court did not think that objections on the basis of confidentiality ought to be accorded more weight in pre-action applications for......

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