NATIXIS, SINGAPORE BRANCH v LIM OON KUIN & 3 Ors

Facts

Natixis, Singapore Branch, the Singapore branch of a French bank, sued Lim Oon Kuin, his son Lim Chee Meng (the 2nd defendant), his daughter Lim Huey Ching and UT Singapore Services Pte Ltd in Suit No 188 of 2021. The 1st defendant had been managing director of Hin Leong Trading (Pte) Ltd (HLT). The bank alleged that the Lim family and their companies dealt without authority with cargo pledged to lenders, bought and sold non-existent cargo to obtain financing, and fabricated bills of lading, contracts and invoices. The 2nd defendant's defence was that he did not run the day-to-day operations of the companies or supervise the staff who did.

In general discovery the 2nd defendant listed only six documents. Limited discovery later given by HLT's liquidators revealed his personal "Lonestar" Hotmail account, to which emails from his HLT account were auto-forwarded and which was regularly blind copied on operational emails. He said he could no longer get into that account or his "Lonestar" Yahoo account because he had forgotten the passwords, and the recovery codes went to his HLT email account (controlled by the liquidators) or to two mobile phones seized by the Commercial Affairs Department (CAD).

The bank applied for specific discovery. An Assistant Registrar ordered the 2nd defendant to take steps to locate, obtain and disclose the two email accounts and the two phones (the "Compound Documents"), including by writing to the CAD and the liquidators. The 2nd defendant appealed in Registrar's Appeal No 100 of 2023, which S Mohan J heard in the General Division of the High Court.

Issues

1. Whether there was a reasonable suspicion that further discoverable documents existed.
2. Whether the Compound Documents were in the possession, custody or power of the 2nd defendant.
3. Whether the Compound Documents were relevant and necessary for the fair disposal of the suit.
4. Whether the Assistant Registrar could make the ancillary order requiring an affidavit on the steps taken.

Holding

The court dismissed the appeal on 24 July 2023 and upheld the Assistant Registrar's orders, including the ancillary order. It fixed the costs of the appeal at S$10,000, including disbursements, payable by the 2nd defendant to the bank.

Reasoning

Reasonable suspicion. A verifying affidavit is usually conclusive, but further discovery may be ordered on a reasonable suspicion that more documents exist. The 2nd defendant had disclosed only six documents and no communications with staff or fellow directors, and his personal phones and email accounts were likely to hold such communications. The court stressed that it made no finding that he had suppressed documents, and that such a finding is not a prerequisite.

Possession, custody or power. The court rejected the argument that a party need not take reasonable steps to search unless the documents are already within his power. The duty to search extends to reasonable requests to third parties; its very purpose is to find out whether documents are within a party's control. The bank had in any case shown a prima facie case of power, because the 2nd defendant had the practical ability to obtain the material: he could ask his telcos for new SIM cards, ask the liquidators for help with the recovery codes, or ask the CAD for the phones or a clone of them. He had tried none of these. The court distinguished Lonrho Ltd and another v Shell Petroleum Co Ltd and another [1980] 1 WLR 627, which concerned documents belonging to separate subsidiary companies. Even on the Lonrho test the 2nd defendant had enforceable rights over his own email accounts, and, following Goldring Timothy Nicholas and others v Public Prosecutor [2013] 3 SLR 487, a legal right of access to the seized phones or their contents.

Relevance and necessity. The Hotmail account received forwarded HLT emails and blind copies of operational emails, and so could show what he knew and whether he gave instructions. The Yahoo account shared the same name, and there was evidence that he used WhatsApp on his phones to discuss work with a UTSS employee.

Ancillary order. The objection that the affidavit order had not been prayed for was technical. The court has inherent power to police its discovery orders, and the order ensured compliance in substance.

From the judgment