Soh Lup Chee and Others v Seow Boon Cheng and Another

• Jurisdiction: Singapore
• Judge: Choo Han Teck JC
• Judgment Date: 01 April 2002
• Neutral Citation: [2002] SGHC 64
• Docket Number: Suit No 106 of 2001 (Registrar's
• Date: 01 April 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: Randolph Khoo Boo Teck and Eunice Ng (Drew & Napier LLC)
• Citation: [2002] SGHC 64
• Defendant Counsel: Chong Boon Leong (Rajah & Tann)
• Court: High Court (Singapore)
• Subject Matter: Whether 'unless order' ought to be made,Affidavits,Striking out,Long record of non-compliance by defendants with discovery orders,Civil Procedure,Material non-disclosure of source documents -Whether at interlocutory stage deponent's affidavits verifying his list of documents should be regarded as conclusive,Whether defence ought to be struck out,Plaintiffs applying to strike out defence,Discovery of documents,First defendant asserting in affidavits that all required documents provided

Judgment

GROUNDS OF DECISION

1. The plaintiffs and the first defendant were friends and shareholders in the second defendant ("Genisys") a company incorporated to provide coordinated mechanical and electrical contracts for main contractors of building contracts. The company became a success, and like many success stories its rise also marked the falling out of its members. The plaintiffs commenced an action against the first defendant who was the majority shareholder, in Originating Summons No. 1902 of 1999, for relief against oppression of the minority shareholders. The parties, however, reached a settlement after two days’ trial before Rajendran J, and consent judgment was entered on 7 July 2000. By that judgement, the first defendant agreed to purchase the plaintiffs’ shares in Genisys. The price was based on an agreed formula, and fixed at 47% of the value of Genisys as at 11 August 1999. The value of the company's shares had therefore to be ascertained. The formula and way in which the shares were to be valued were also agreed under the terms of the consent judgment. By a further order of court dated 24 May 2001, Don Ho Mun Tuke was appointed as the valuer. The resulting conclusion of the valuer was that the first defendant was to pay the plaintiffs the sum of $1,694,199.60 being 47% of the value ($3,604,883.00) of Genisys as at 11 August 1999. The plaintiffs believed that the valuation was not properly carried out because the first defendant had deliberately withheld material information from the valuer and misled him with inaccurate ones.

2. Consequently, the plaintiffs commenced a fresh claim by way of a writ action against the same defendants. This time, the action was based on fraud in that they allege, broadly speaking, that the first defendant who controlled Genisys caused fraudulent information to be created and given to the valuer, or otherwise withheld material information from him, with the purpose and intention of misleading him and thereby caused him to undervalue the assets of Genisys. The plaintiffs made various interlocutory applications for discovery but were thwarted by the first defendants refusal to cooperate or obey the discovery orders in letter and spirit. At the end of their tether, the plaintiffs applied to the assistant registrar to strike out the defence on the ground that they had contumaciously and continuously failed to comply with the discovery orders of the assistant registrar made on 9 July 2001, which also aggregated previous discovery orders. The assistant registrar declined to strike out the defence and the plaintiffs appealed before me against that refusal.

3. At the heart of the dispute over discovery are documents described as Balance Budget Summaries ("BBS"). These are hard copies of documents containing budget summaries in respect of any given project of Genisys. Each BBS is a mine of information about the nature, costs, and profitability of the company in respect of the project stated in the summary. The BBS, however, are not a stack of documents kept in the cabinets or drawers of the company. The information that each BBS carries is stored in the database of the company’s computers. They are fed in, stored, edited, and retrieved as the case may be at any moment by means of a sophisticated programme known as "IMIX", the acronym for Integrated Management Information System. It is therefore vital to any party who wishes to ascertain the true worth of the company that the IMIX disgorges all the information from the data pool into the printed BBS. By the same token, it is naturally important to anyone who wishes to prevent that kind of information from surfacing, to manipulate IMIX so that it regurgitates only choice bits for print.

4. It will first be helpful to consider what the orders of 9 July 2001 were. For convenience I shall set out the material terms here:

"1. The 1^st Defendant shall file and serve a comprehensive list of documents identifying the most comprehensive available BBS for the following 17 UEM Genisys Sdn Bhd ("UEG") projects as at the time of the valuation and also the latest available BBS for the following 17 UEG projects as at 13 February 2001:

No.	UEG Project Name	UEG Project Code
i.	Sheraton Labuan	(4002)
ii.	Sheraton Subang	(4003)
iii.	Sheraton Langkawi	(4004)
iv.	Sheraton Tower	(4005)
v.	RSA Package C hydraulic	(4011)
vi.	JB Duty Free AV	(4014)
vii.	JB Duty Free Electrical	(4015)
viii.	JB Duty Free BAS	(4016)
ix.	Wakaf College	(4013)
x.	NSC Outdoor	(5022)
xi.	Telekom HQ Project	(6031) including the plumbing packages (if available)
xii.	NCS Hawker Centre	(8071)
xiii.	LRT System II	(LRT)
xiv.	Seremban RSA Package A	(4009)
xv.	Seremban RSA Package B	(4010)
xvi.	Seremban RSA Package C	(4012)
xvii.	Seremban RSA Plumbing	(4008)

2. The 1^st Defendant shall also file and serve an affidavit verifying such list and confirming that the Defendants have no other more comprehensive available BBS for the said 17 UEG projects.

3. The 1^st Defendant shall file and serve a comprehensive list of documents and an affidavit verifying such list specifically identifying, for each entry of the BBS for the abovementioned 17 UEG projects, each available GIE form and supporting or source document in respect of the said entry.

4. The 1^st Defendant shall file and serve a comprehensive list of the following documents and an affidavit verifying such list:

(a) a complete copy of the January to July work in progress general ledger for 1999 for UEG;

(b) an affidavit stating whether there are any supporting documents to justify the formula for a fixed percentage for the provision of costs for the projects of UEG; and

(c) payment certificates for the abovementioned 17 projects

1. issued between 1 January 1999 and 20 September 2000, (both dates included); and
2. the most recent payment certificate issued before 31 December 1998.

This order is made without prejudice to the 1^st Defendant’s contention that the valuation was completed on 11 August 2000.

5. Without prejudice to any dispute as to the sufficiency of compliance with the Order of Court made on 9 April 2001, the 1^st Defendant shall file and serve a comprehensive list of documents and affidavit verifying such list, which specifically identifies for each entry of each BBS provided under the cover of M/s Rajah & Tann’s letter dated 12 April 2001 pursuant to the Order of Court made on 9 April 2001, and each available GIE form and supporting or source document in respect of the said entry.

6. The list of documents and affidavit verifying such list of documents referred to in paragraphs 1 and 2 of this Order shall be filed and served by 4pm on 23 July 2001.

7. The list of documents and affidavit verifying such list of documents referred to in paragraphs 3, 4 and 5 of this Order shall be filed and served by 4pm on 20 August 2001.

8. Nothing in this Order shall preclude the Plaintiffs from applying for a preemptory order and/or striking out of the 1^st Defendant’s Defence in the event that the 1^st Defendant fails to comply with paragraphs 1 to 7 of this Order of Court."

5. It can be inferred from the tone and form (from the repeated use of the word "comprehensive" in the same phrase in order 1) as well as the specificity of the rest of the above orders that the assistant registrar must have agreed with plaintiffs' vehement complaint that a previous order for discovery made on 9 April 2001 was not fully complied with. The first order of 9 April required that –

"the first defendant provides the complete Balance Budget Summaries for...