PSA Corporation Ltd v Korea Exchange Bank

• Jurisdiction: Singapore
• Judgment Date: 26 April 2002
• Date: 26 April 2002
• Docket Number: Suit No 937 of 2001 (Registrar's
• Court: High Court (Singapore)

PSA Corp Ltd

Plaintiff

and

Korea Exchange Bank

Defendant

[2002] SGHC 88

Woo Bih Li JC

Suit No 937 of 2001 (Registrar's Appeal No 30 of 2002)

High Court

Civil Procedure–Disclosure of documents–Prohibition against disclosure–Banking confidentiality–Scope of s 47 Banking Act (Cap 19, 1999 Rev Ed) prohibition against discovery–Whether prohibition general or limited–Whether court could order disclosure if statutory exceptions applicable–Whether right for court to order disclosure of certain documents and not others–Whether s 47 (3) should be amended–Section 47 and Sixth Schedule Pt I items 3 and 4 Banking Act (Cap 19, 1999 Rev Ed)–Words and Phrases–“Customer information”–Sections 40A and 47 Banking Act (Cap 19, 1999 Rev Ed)

The plaintiff (“PSA”) claimed against the defendant (“KEB”) for payment under guarantees issued by KEB. PSA applied for discovery of two categories of documents pertaining to the guarantees. KEB did not dispute that the documents sought were relevant to the suit but contended that it was precluded by s 47 of the Banking Act (Cap 19, 1999 Rev Ed) (“the Act”) from giving discovery. The assistant registrar disallowed the discovery of the second-category documents.

On appeal, PSA submitted that (a) KEB was not prohibited from disclosing the second category of documents as it did not pertain to money in the account of KEB's customers, and (b) it was anomalous to allow the disclosure of one category of documents and not another.

Held, dismissing the appeal:

(1) KEB was prohibited from disclosing the second-category documents. First, “information” in the statutory definition of “customer information” included documentary information, and disclosure was prima facie prohibited so long as the information sought related to a customer's account; the second-category documents related to the account of KEB's customer. Second, Parliament intended that there should first be a general prohibition against disclosure to ensure banking confidentiality, which was then subject to the exceptions in the Sixth Schedule of the Act. Third, s 47 (3) of the Act did not enable the court to order disclosure if none of the exceptions applied in the first place, and the court could not make such further orders as were necessary to preserve confidentiality unless item 3 or 4 of Pt I of the Sixth Schedule applied: at [25] to [28].

(2) There was some force in submission (b). The court opined that either both categories should have been disclosed or not at all. However, this was the assistant registrar's decision to which KEB did not appeal: at [32].

[Observation: It might well be that the present case called for further amendments to be made to the Act to include an exception which allowed disclosure in litigation between a bank and the beneficiary of an instrument issued by the bank. In addition, s 47 (3) could be expanded to allow the court to make such directions and orders it thought fit to ensure confidentiality where that exception, if available, applied. Section 47 (3) was too narrow in that it should not be confined to items 3 and 4 because there were other exceptions which might require the court's assistance to ensure confidentiality. However, it was for Parliament to decide whether any further exception to banking confidentiality was required and whether s 47 (3) should be expanded: at [29] to [31].]

Banking Act (Cap 19, 1994 Rev Ed) ss 47 (3), 47 (4)

Banking Act (Cap 19, 1999 Rev Ed) ss 47, 47 (3), Sixth Schedule Pt I items 3, 4 (consd);ss 40A, 47 (1), 47 (2), Sixth Schedule Pt I items 6, 7

Evidence Act (Cap 97, 1997 Rev Ed) Pt IV

Siraj Omar (Drew & Napier LLC) for the plaintiff

Toh Kian Sing and Chia Song Yeow (Rajah & Tann) for the defendant.

Woo Bih Li JC

1 In this action, PSA Corp Ltd (“PSA”) claims against Korea Exchange Bank (“KEB”) for payment under two guarantees issued by KEB in favour of PSA.

2 For the purpose of my grounds, the main defences of KEB are that:

(a) PSA did not open an account for Cho Yang (Singapore) Pte Ltd (“CY Singapore”) as required under each guarantee and that the account was opened for Cho Yang Shipping Co Ltd (“CY Korea”) instead.

(b) KEB also alleged that the second guarantee was issued in replacement or substitution of the first guarantee and not in addition to it.

3 PSA then applied for discovery of two categories of documents in relation to each of the two guarantees:

(a) copies of all correspondence, including e-mail, between KEB and CY Singapore and/or CY Korea relating to each particular guarantee; and

(b) copies of all documents, including but not limited to KEB's internal memoranda, file notes and e-mail, relating to KEB's processing and issue of the particular guarantee.

4 KEB did not dispute that the documents for which discovery was sought were relevant to the disputes in the action. However, it took the position that it was precluded by s 47 of the current...