Xing Rong Pte Ltd (Formerly known as Huadi Projects Pte Ltd) v Visionhealthone Corporation Pte Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 26 August 2010
• Neutral Citation: [2010] SGCA 30
• Plaintiff Counsel: Eric Tin Keng Seng, Gooi Chi Duan, Kang Yixian and Jessica Soo (Donaldson & Burkinshaw)
• Docket Number: Civil Appeal No 14 of 2010
• Date: 26 August 2010
• Hearing Date: 05 July 2010
• Subject Matter: Civil Procedure
• Year: 2010
• Citation: [2010] SGCA 30
• Defendant Counsel: Dinesh Dhillon and Lim Dao Kai (Allen & Gledhill LLP)
• Court: Court of Appeal (Singapore)
• Published date: 08 October 2010

Chao Hick Tin JA (delivering the grounds of decision of the court): Introduction

The appellant, Xing Rong Pte Ltd (“Xing Rong”), appealed against the decision of the judge below (“the Judge”), who had struck out its appeal against the decision of the Assistant Registrar (“the AR”) in Summons No 5937 of 2009 where the AR granted the discovery application that the respondent, Visionhealthone Corporation Pte Ltd (“VHO”), had applied for against the Bank of China Ltd (“BOC”), a non–party to the present proceedings (“the Discovery Application”). We allowed the appeal against the Judge’s decision on the striking out order but as we also found that the AR was justified in granting the Discovery Application, we dismissed the appeal against the AR’s decision. We now give the grounds for our decision.

Background

The Discovery Application was made in relation to Suit No 678 of 2009 (“the Suit”). In the Suit, VHO claimed S$2.125 million (“the Sum”) from Xing Rong on the basis of an agreement dated 18 October 2003 (“the Agreement”) with Xing Rong to establish a network of medical facilities in and outside China (“the Joint Venture”). The funds for the Joint Venture were to be provided solely by VHO.

VHO claimed that, between December 2003 and January 2004, it remitted the Sum to Xing Rong’s bank account with BOC (“the Account”). It asserted that it was induced to remit the sum to Xing Rong through the latter’s and/or the latter’s representative’s fraudulent misrepresentations that the Sum was required for the purposes of the Joint Venture

Prior to March 2007, Xing Rong represented that, in or around 2004, it had in turn remitted the Sum to a third-party Chinese company, Fuzhou Huadi Hebang Construction Renovation Engineering Company Ltd (“FHH”) for the purposes of the Joint Venture. However, the FHH financial records obtained by VHO did not reflect the receipt of the sum by FHH.

Xing Rong, while admitting that it had received the Sum, alleged that the Sum was received pursuant to a currency exchange transaction with VHO and not pursuant to any joint venture.

In the Suit, VHO sought, inter alia, to recover the Sum from Xing Rong, as well as the production of all necessary accounts and enquiries relating to the movements of the Sum. Thus, Xing Rong was asked to furnish the relevant bank statements that evidenced the movements of the Sum. However, it claimed that the documents sought by VHO were not in its possession.

In view of Xing Rong’s claim that it did not have the bank statements in question, VHO sought the production of documents from BOC relating to and/or evidencing the movements of the Sum, or any part thereof, into and out of the Account.

At the hearing of the Discovery Application against BOC, BOC left it to the court to decide whether it should produce the required documents. However, Xing Rong, which had been served with the papers relating to the Discovery Application, opposed the said application. After hearing the parties, the AR granted VHO’s application and ordered that it be allowed to inspect and take copies of certain documents in BOC’s possession (“the Discovery Order”). The discovery ordered related to the following documents (“the Ordered Documents”):

All bank statements, cheques, remittance slips, receipts, transfer instructions and correspondence relating to and/or evidencing the movements of the sum of S$2,125,000.00, which was deposited into account no. 012XXXXXXXX (the “Account”) of Xing Rong Pte Ltd (formerly known as Huadi Projects Pte Ltd) with Bank of China Limited by way of:

1. OCBC cheque no. 749325 dated 23 December 2003 for the sum of S$400,000.00; 2. UOB cheque no. 642852 dated 23 December 2003 for the sum of S$1,100,000.00; and 3. UOB cheque no. 642853 dated 10 January 2004 for the sum of S$625,000.00,

into and out of the Account.

BOC, which was the party subject to the Discovery Order, did not appeal against the Discovery Order within the relevant time frame (ie, by 14 December 2009). However, Xing Rong, which was dissatisfied with the AR’s ruling, filed a notice of appeal on 1 December 2009 against the Discovery Order by way of Registrar’s Appeal No 449 of 2009 (“the Registrar’s Appeal”).

On 4 December 2009, VHO applied, by way of Summons No 6230 of 2009, to strike out the Registrar’s Appeal (“the Striking Out Application”) on the ground that Xing Rong had no locus standi to bring the Registrar’s Appeal since there was no issue between VHO and Xing Rong with respect to the discovery in question.

On 11 January 2010, the Judge, on hearing the Striking Out Application, accepted VHO’s contention and struck out Xing Rong’s appeal.

On 9 February 2010, Xing Rong filed an appeal against the Judge’s decision.

The Judge’s Decision

The Judge allowed the Striking Out Application on three grounds: Xing Rong lacked the locus standi to appeal against the Discovery Order as its personal interests were neither affected nor aggrieved by it. Moreover, it was neither a party to the Discovery Application nor the subject of the Discovery Order. As BOC had not filed any appeal against the Discovery Order within the prescribed time limit, the Discovery Order was perfected between VHO and BOC. Thus, the doctrine of res judicata precluded Xing Rong from filing an appeal against the Discovery Order. In any event, Xing Rong’s appeal had no substantive merits as the Ordered Documents were relevant and necessary to the fair disposal of the Suit.

The Appeal

The issues in the appeal before this court were: (a) Whether Xing Rong had locus standi to appeal against the Discovery Order; (b) Whether, given the fact that BOC did not file any appeal against the Discovery Order, the Order had been perfected such that Xing Rong was precluded, on the basis of the doctrine of res judicata, from filing any appeal against the Order; and (c) Whether the appeal against the AR’s decision should, even if Xing Rong had locus standi to file the appeal, have been struck out on the basis that it lacked substantive merit.

Whether Xing Rong had locus standi to appeal against the Discovery Order

The relevant part of O 24 r 6 of the Rules of Court (Cap 322, R5, 2006 Rev Ed) (“the Rules”) concerning discovery of documents provides that: (1) An application for an order for the discovery of documents before the commencement of proceedings shall be made by originating summons and the person against whom the order is sought shall be made defendant to the originating summons. (2) An application after the commencement of proceedings for an order for the discovery of documents by a person who is not a party to the proceedings shall be made by summons, which must be served on that person personally and on every party to the proceedings.

…

(8) For the purpose of Rules 10 and 11, an application for an order under this Rule shall be treated as a cause or matter between the applicant and the person against whom the order is sought.

After considering the relevant sections of O 24 r 6 of the Rules, the Judge set out, at [19] of his Grounds of Decision (“the GD”), the requirements that needed to be...