Lee Chang-Rung and others v Standard Chartered Bank

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 17 September 2010
• Neutral Citation: [2010] SGHC 276
• Plaintiff Counsel: Leonard Loo (Leonard Loo LLP)
• Docket Number: Suit No 212 of 2009; (Registrar’s Appeal No 125 of 2010)
• Date: 17 September 2010
• Hearing Date: 23 June 2010
• Subject Matter: Civil Procedure
• Published date: 20 September 2010
• Citation: [2010] SGHC 276
• Defendant Counsel: Hri Kumar, SC and James Loh (Drew & Napier LLC)
• Court: High Court (Singapore)
• Year: 2010

Tay Yong Kwang J: Introduction

On 16 March 2010, an AR of the Supreme Court heard an application by the defendant to strike out the plaintiffs’ action on the ground of the plaintiffs’ failure to comply with an “unless Order” in respect of discovery of documents. The AR ordered the amended writ of summons and statement of claim struck out and the action dismissed. He also ordered the plaintiffs to pay the defendant the costs of the application and of the action, such costs to be taxed or agreed between the parties. The case was then at the stage where exchange of affidavits of evidence-in-chief had been ordered and trial dates set for end March to early April 2010.

The plaintiffs appealed against the above orders and asked that they be given an extension of time to comply with the order of court dated 30 November 2009 by filing and serving on the defendant within 14 days a second supplementary list of documents and an affidavit verifying the same.

I dismissed the plaintiffs’ appeal and ordered them to pay the defendant’s costs of the appeal, such costs to be taxed or agreed. The plaintiffs now appeal to the Court of Appeal against my decision.

The facts

The plaintiffs are the joint holders of three accounts opened in October 2005 with American Express Bank Limited (“AEB”) which was subsequently acquired by the defendant. The first account was held by the first and the second plaintiffs who are brother and sister. The second account was held by the first and the third plaintiffs who are brothers. The third account was held by the second and the fourth plaintiffs who are wife and husband.

Before opening the above accounts, the plaintiffs also had accounts with DBS and in October 2002, they began to purchase various investment products from DBS, including structured notes and dual currency investments.

The plaintiffs’ relationship manager in the defendant was Daphne Lau (“Ms Lau”). In March 2008, Ms Lau spoke to the first and the fourth plaintiffs about a structured product known as 10Y NC3m Callable LIBOR Range Accrual Note (“the product”), the subject of the action here. In the conversation, Ms Lau referred to a previous investment and told the first plaintiff in Mandarin that the product was “just like the one we did at that time”. This was a reference to a LIBOR-linked structured note which the first and the third plaintiffs had previously purchased from DBS.

The plaintiffs purchased the product, with the first and the second plaintiffs investing US$500,000 through their account. The first and the third plaintiffs invested US$100,000 and the second and the fourth plaintiffs also invested US$100,000.

On 4 March 2009, the plaintiffs commenced the present suit in relation to the product, alleging that Ms Lau made the following misrepresentations: (a) the product is a safe investment; (b) the product is 100% principal protected; (c) there is no risk; and (d) there is a guaranteed return of the plaintiffs’ principal amount with a higher interest. The plaintiffs pleaded that they were conservative customers who placed most of their money with the defendant in the form of fixed deposits. The defendant denied these averments and alleged that the plaintiffs were experienced investors who knew what they were buying. In an affidavit of 7 December 2009, the plaintiffs asserted that they were of the impression that their investments in the product were fixed deposits with slightly higher interest returns. One of the important issues for trial would therefore be the plaintiffs’ experience in financial products of the nature in issue here.

On 15 July 2009, the plaintiffs filed their list of documents which did not contain documents relating to their investment experience in such structured products between October 2002 and March 2008 with any bank or financial institution. On 18 August 2009, the defendant’s solicitors wrote to the plaintiffs’ solicitors to ask for discovery of such documents. However, the plaintiffs did not accede to this request. The defendant therefore applied for specific discovery

On 23 October 2009, the AR who heard the application ordered the plaintiffs to give discovery as he was of the view that the documents requested were relevant and necessary. The plaintiffs were given three weeks (up to 13 November 2009) to comply with this order.

The plaintiffs did not comply with the AR’s order. On the last day for compliance, they applied for a reasonable extension of time to comply with the said order. This application was supported by an affidavit of their solicitor who merely stated that the plaintiffs would file and serve an affidavit to explain their position and would send him their affidavit for filing shortly as they were in Taiwan. However, the said affidavit of the plaintiffs was not filed nor served and there was therefore no explanation about why they required the extension of time to comply with the AR’s order on discovery.

That same day, the defendant’s solicitors wrote to the plaintiffs’ solicitors to ask them to comply with the AR’s order by 16 November 2009 and to inform them to request an urgent hearing date for their application for extension of time. There was no response to this letter.

On 20 November 2009, the defendant’s solicitors inspected the court files and discovered that the hearing date for the plaintiffs’ application for extension of time had already been given as 30 November 2009. However, the plaintiffs had still not served their application on the defendant’s solicitors. Accordingly, on 24 November 2009, the defendant applied for an “unless order” which was fixed for hearing on the same day as the plaintiffs’ application for extension of time.

The next day, the plaintiffs informed the court that their solicitor, Mr Leonard Loo, would be overseas from 25 November 2009 to 3 December 2009 and asked for an adjournment of the defendant’s application. The defendant was not amenable to this request. On 26 November 2009, the plaintiffs wrote to the court to state that both their solicitors, Mr Leonard Loo and Mr Edwin Loo, were overseas and that there would be no solicitor to attend the hearing on 30 November 2009.

On 30 November 2009, an AR dismissed the plaintiffs’ application for extension of time and granted an “unless order” to the defendant. Under this order, the plaintiffs had to comply with the order for discovery by 7 December 2009, failing which the writ of summons and the statement of claim would be struck out and their action against the defendant dismissed. The trial dates for this action had already been given as 29 March to 1 April 2010 and the parties had to file and exchange their witnesses’ affidavits of evidence-in-chief by 15 January 2010.

On 4 December 2009, the plaintiffs appealed against the “unless order” and the dismissal of their application for extension of time. They served these notices of appeal on the defendant on 7 December 2009, the last day for compliance with the “unless order”.

On 7 December 2009, the plaintiffs also filed an affidavit in purported compliance with the “unless order”. In this affidavit, they disclosed four documents relating to two investments.

As a result of this affidavit, the defendant’s solicitors asked the plaintiffs’ solicitors whether they intended to proceed with their appeals. On 17 December 2009, the plaintiffs’ solicitors replied and asked the defendant to confirm that the plaintiffs had complied with their obligations under the AR’s order for discovery and offered to pay costs. The defendant’s solicitors responded the same day to state that only the plaintiffs would know whether they had complied with the AR’s order for discovery.

On 28 January 2010, Andrew Ang J heard the plaintiffs’ appeals. In the course of the hearing, the plaintiffs’ solicitors again asked that the defendant confirm that the plaintiffs had complied with their discovery obligations and the “unless order”. Andrew Ang J refused to direct the defendant to give such confirmation whereupon the plaintiffs’ solicitors applied to withdraw the appeals. Leave was granted and costs were ordered against the plaintiffs.

In the said affidavit of 7 December 2009, the plaintiffs stated as follows: 1. I am the 1st Plaintiff in this Suit...