Re X Diamond Capital Pte Ltd

• Jurisdiction: Singapore
• Judge: Goh Yihan JC
• Judgment Date: 26 July 2023
• Docket Number: Originating Application No 148 of 2023 (Summons No 1990 of 2023)
• Court: High Court (Singapore)

Re X Diamond Capital Pte Ltd (Metech International Ltd, non-party)

[2023] SGHC 201

Goh Yihan JC

Originating Application No 148 of 2023 (Summons No 1990 of 2023)

General Division of the High Court

Evidence — Admissibility of evidence — Hearsay — E-mails exhibited in affidavit containing hearsay evidence sought to be admitted — Whether hearsay rule applied to evidence in affidavits — Section 2(1) Evidence Act 1893 (2020 Rev Ed)

Insolvency Law — Judicial management — Striking out — Striking out evidence adduced by company placed under judicial management — Interpretation of r 21 Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020 with O 14 r 6 Rules of Court (2014 Rev Ed) — Rule 21 Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020 — Order 14 r 6 Rules of Court (2014 Rev Ed)

Held, allowing the application:

(1) Where there was an application for judicial management, the Insolvency Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020 (the “CIR Rules”) applied: at [10].

(2) Rule 21 of the CIR Rules was phrased similarly to O 41 r 6 of the Rules of Court (2014 Rev Ed) (the “ROC 2014”). The principles governing the application of O 41 r 6 of the ROC 2014 should apply to govern the application of r 21 of the CIR Rules: at [11].

(3) The requirement that “scandalous, irrelevant or otherwise oppressive” matters could be struck out was framed disjunctively in O 41 r 6 of the ROC 2014. Therefore, the rule in Cunningham v Takapuna Tramway & Ferry Co Ltd[1920] NZLR 137 that the requirements were conjunctive was not applicable, as that referred to the court's inherent power to expunge such matters in the absence of a written rule providing for the same: at [12].

(4) There was no equivalent to O 41 r 6 of the ROC 2014 in the Rules of Court 2021 (the “ROC 2021”). Order 15 r 25 of the ROC 2021 assessed the contents of an affidavit using criteria different from those in O 41 r 6 of the ROC 2014: at [13].

(5) It would be helpful for the phrasing of r 21 of the CIR Rules to be updated to reflect the phrasing of O 15 r 25 of the ROC 2021, to avoid having to interpret r 21 using the principles in the ROC 2014: at [13].

(6) It was not appropriate to analogise the expunging of evidence in an affidavit to the striking out of pleadings. The striking out of pleadings had more serious consequences than the striking out of evidence to substantiate those pleadings: at [14].

(7) A court should be slow to expunge parts of an affidavit on the ground that it was scandalous, irrelevant, or otherwise oppressive. It should do so only if it could be shown that the impugned materials were clearly irrelevant or relate to unsustainable allegations: at [14].

(8) The court was not confined to considering the relevancy of documents in relation to the purposes of judicial management set out in the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) (the “IRDA”): at [15].

(9) Whether oral evidence was provided on assertions made outside of court and tendered in court as evidence as to the truth of the contents therein, but the maker of the assertion was not called as a witness, it was inadmissible hearsay evidence: at [20].

(10) The Evidence Act 1893 (2020 Rev Ed) (the “EA”) did not apply to applications determined by affidavit evidence alone. In place of the EA, the applicable evidentiary framework would be the rules of evidence at common law that were not inconsistent with the EA: at [21].

(11) Because the CIR Rules were silent as to the applicable evidentiary rules, s 10(1) of the IRDA compelled reference to O 15 r 25(1) of the ROC 2021, which provided that an affidavit had to contain only relevant facts: at [21].

(12) Unlike O 41 r 5(2) of the ROC 2014, O 15 r 25(1) of the ROC 2021 did not make a distinction between affidavits filed for interlocutory applications that might contain statements of information or belief with the sources and grounds thereof (ie, hearsay evidence), and those that were not. Evidence on information or on belief was prima facie inadmissible in proceedings commenced by original application where the rights and liabilities of the parties were determined with finality: at [22].

(13) An order that a company was to be placed under judicial management was a substantial application that would result in the final determination of the company's rights in relation to third parties such as its creditors. After the company was placed under judicial management, there would be nothing left for a court to decide except for administrative matters that arose from time to time: at [23].

Case(s) referred to

Cunningham v Takapuna Tramway & Ferry Co Ltd [1920] NZLR 137 refd)

HSBC Trustee (Singapore) Ltd v Lucky Realty Co Pte Ltd [2015] 3 SLR 885 (folld)

Invenpro (M) Sdn Bhd v JCS Automation Pte Ltd [2014] 2 SLR 1045 (folld)

Wee Teong Boo v Singapore Medical Council [2023] 3 SLR 705 (folld)

Facts

X Diamond Capital Pte Ltd (the “Company”), applied to be placed under judicial management. Its creditor, Metech International Ltd (the “Creditor”), objected to the application. In response, the Company filed an affidavit, where it alleged that the Creditor had been attempting to prevent the Company from pursuing claims in other actions.

This was the Creditor's application to expunge some documents (the “Documents”) exhibited in the Company's affidavit.

The Creditor submitted that the Documents should be expunged because they were scandalous, irrelevant, or otherwise oppressive, and were adduced for a collateral purpose. Additionally, two specific documents should be expunged on alternative grounds: some e-mails should be expunged for being inadmissible hearsay evidence, and meeting minutes should be expunged for disclosing the Creditor's confidential information.

The Company objected to the application because the Documents were relevant to the court's determination of whether the Creditor's nominated judicial manager should be appointed.

Legislation referred to

Evidence Act 1893 (2020 Rev Ed) s 2(1)

Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) ss 10(1), 89, 89(4), 90

Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020 rr 3, 21

Rules of Court (2014 Rev Ed) O 41 r 5(2), O 41 r 6

Rules of Court 2021 O 15 r 25, O 9 r 16(4)(b), O 9 r 16(4)(c)

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