Manilal & Sons (Pte) Ltd v Bhupendra KJ Shan (trading as JB International)

• Jurisdiction: Singapore
• Judgment Date: 01 December 1989
• Date: 01 December 1989
• Docket Number: Suit No 2297 of 1981
• Court: High Court (Singapore)

Manilal and Sons (Pte) Ltd

Plaintiff

and

Bhupendra K J Shan (trading as JB International)

Defendant

[1989] SGHC 101

Chao Hick Tin JC

Suit No 2297 of 1981

High Court

Civil Procedure–Discovery of documents–Striking out plaintiff's action for failure to comply with order for discovery–“Unless” order–Whether plaintiff complied with order to file further and better list of particulars–O 24 r 16 (1) The Rules of the Supreme Court 1970

The plaintiff (“Manilal”) sued the defendant (“BKJS”) for balance of moneys due on goods sold and delivered and for commission and for certain partnership trading business in rubber and latex. Following a summons for directions, the court ordered each party to serve on the other a list of documents and to file affidavits verifying them. Manilal filed its list of documents and affidavit. Subsequently, BKJS applied for an order by way of a summons in chambers, for Manilal to supply a further and better list of documents. On 31 August 1987, the court made an “unless” order for Manilal to file a further and better list of documents and in default of compliance, for its action to be struck out. Later, BKJS applied by summons in chambers for an order that Manilal's action be struck out for its failure or refusal to give proper discovery of documents in its possession, custody or power relating to the action.

Held, allowing the application:

(1) Under a general order of court for discovery, a party was obliged to make discovery of all documents relevant to the matters in question in the action. What such matters were would depend on the pleadings. A document relates to the matter in question in the action if it contains information which may - not which must - either directly or indirectly enable the party requiring the discovery either to advance his own case or to damage the case of his adversary or which may fairly lead to a train of inquiry which may have either of those two consequences: at [51].

(2) Order 24 r 16 (1) of The Rules of the Supreme Court 1970 gives the court a general power to enforce compliance with the requirements of the rules or orders for discovery, inspection and production of documents. In the event of default of an order of court under this provision, the court may make such order as it thinks just, including an order that the action be dismissed or the defence be struck out. While this power to dismiss is optional, disobedience to an “unless” order is likely to be held to be contumelious behaviour resulting in the dismissal of the action or striking out of the defence: at [52] to [55].

(3) On the facts, Manilal did not comply with the order, and if the non-compliance had not been deliberate, it arose out of gross negligence such as to amount to wilfulness. Manilal's action was thus dismissed: at [64] and [66].

Compagnie Financiere et Commerciale du Pacifique, The v The Peruvian Guano Company (1882) 11 QBD 55 (folld)

Danvillier v Myers (1833) 1 WN 58 (refd)

Kent Coal Concessions Limited v Duguid [1910] 1 KB 904 (refd)

Merchants' & Manufacturers' Insurance Company Limited v Davies [1938] 1 KB 196 (folld)

Rules of the Supreme Court1970, TheO 24r 16 (1) (consd)

M Karthigesu (Tan Rajah & Cheah) for the plaintiff

KShanmugam and Yap Wai Ming (Drew & Napier) for the defendant.

Chao Hick Tin JC

1 In this action the plaintiffs claim the sum of $892,611.77 being the balance due from the defendant to the plaintiffs for goods sold and delivered and for commission and for certain partnership trading business in rubber and latex.

2 Soon after the institution of this action an application was made by the plaintiffs for summary judgment. This was refused by the deputy registrar who granted unconditional leave to defend. The plaintiffs appealed to the judge in chambers, who affirmed the decision of the deputy registrar.

3 In the amended defence filed herein the defendant avers that, subject to certain specified items, the goods allegedly sold and delivered to the defendant were, in fact, never sold and delivered. The defendant also alleges fraud. In regard to the claim relating to the partnership business in rubber and latex, the defendant counterclaims against the plaintiffs for moneys due to him in accordance with an oral agreement entered into between the parties in May 1976. In short, there is considerable dispute between the parties as regards partnership accounts as well as the accounts relating to the goods allegedly sold to the defendant.

4 Following a summons for directions made under O 25 of The Rules of the Supreme Court 1970 (“the RSC”), the court on 20 January 1984 ordered that each party served on the other within 21 days a list of documents and filed an affidavit verifying the same. The court also ordered inspection of documents within 14 days of the service of the list.

5 On 26 August 1987, the defendant filed his list of documents and also made an application by way of summons in chambers (SIC No 5845 of 1987) asking for, inter alia, an order that the plaintiffs comply with the order of court of 20 January 1984 and that the defendant and such public accountants as might be nominated by the defendant be allowed access to all of the documents in the plaintiffs' list of documents. In his affidavit filed in support of this application, the defendant stated that:

1. (i) the balance sheets, upon which the plaintiffs based their claims, were not true and were deliberately drawn up to reflect artificial balances in favour of the plaintiffs;

2. (ii) there was an agreement between the plaintiffs and the defendant that neither party would rely on the balance sheets and that the true accounts would be worked out later;

3. (iii) that if the true accounts were examined it would be seen that goods which were claimed to have been sold to the defendant were never sold; and

4. (iv) that the partnership business in rubber and latex should have shown a profit instead of a loss.

6 In the affidavit, the defendant expressly asked the plaintiffs to disclose certain primary documents for the period 1976-1980, and he gave his reasons why he needed those documents. The documents were: cash books, ledger books, bank credit/debit notes, sale contract files, purchase contract files, local sale bills and invoice books. The defendant said that he needed these documents to countercheck the plaintiffs' claims and to show that the claims could not be true – in the words of the defendant's accountant, they require “access to Manilal's books and original contracts and invoices in order to determine the source of goods and their ultimate disposal”.

7 On 27 August 1987, the plaintiffs filed their list of documents (in compliance with the order of court of 20 January 1984) and an affidavit verifying the same. On 31 August 1987, when the application of the defendant in SIC No 5845 of 1987 came up, that became an application whether to order a further and better list of documents. After hearing the parties, the court ordered, inter alia, that:

(a) The plaintiffs do comply with the order of court dated 20 January 1984 by filing a further list of documents and verifying the same by affidavit by 28 September 1987.

(b) In default of compliance with paragraph one by the plaintiffs, the plaintiffs' action herein be struck off.

8 A year later on 21 September 1988, the defendant applied by summons in chambers for, inter alia, an order that the plaintiffs' action herein “be struck out for failure or refusal by the plaintiffs to give proper discovery of documents in or which have been in the possession, custody or power of the plaintiffs … relating to the matter in question in this action”. The defendant also applied for an order to enter judgment on the counterclaim against the plaintiffs but this is not seriously pursued. The application to strike out the plaintiffs' action in the matter is now before me.

9 The basis of this application to strike out is that despite repeated requests, the plaintiffs have refused to give discovery of a large number of crucial documents which the defendant says the plaintiffs must furnish under the order of court of 31 August 1987.

Background to the present application

10 To better appreciate the issues before me, it may be necessary that I briefly set out the background facts that give rise to the present action between the parties. For a period of four years from May 1976 to May 1980 the parties were in partnership, and the business of the partnership was to trade in rubber and latex. In this regard the defendant says only in physical rubber and latex. They were also, it would appear, trading with each other in various other commodities and, according to the defendant, also in partnership. Between May 1976 until the end of 1978, an associate company of the plaintiffs, Manilal and Sons (M) Sdn Bhd of Penang, also participated in the partnership to trade in rubber and latex.

11 The plaintiffs say that the partnership's trading in rubber and latex for the period 1 January to 31 May 1980 made a loss, resulting in there being as on 31 May 1980 a net sum of $113,271.42 due from the defendant to the plaintiffs. The other main heads of claim is for a sum of $779,340.35, being the balance amount due to the plaintiffs for goods sold and delivered to the defendant and for commissions and other charges. The plaintiffs rely on the accounts as set out in certain balance sheets which were signed by the parties.

12 The defendant denies that the partnership business in rubber and latex suffered any loss. The defendant says that if the accounts and primary documents/books are looked into, it will be discovered that the partnership ventures actually made a profit. The defendant also says that the balance sheets are not correct and were deliberately drawn to show artificial balances in favour of the plaintiffs. As stated above, the defendant alleges that there was an agreement between the parties not to rely on the...