Hyflux Ltd (In Compulsory Liquidation) and others v Lum Ooi Lin

Hyflux Ltd (in compulsory liquidation), Hydrochem (S) Pte Ltd and Tuaspring Pte Ltd (under receivership), together with Mr Cosimo Borrelli, sole liquidator of Hyflux and Hydrochem, sued Ms Lum Ooi Lin in HC/S 267/2022. In HC/S 268/2022 the three companies sued KPMG LLP over its audit of Hyflux's financial statements. Both suits arose from the Tuaspring project, a desalination plant with a power plant. The plaintiffs alleged that Hyflux's financial statements for the financial years ended 31 December 2011 to 2017 were materially misstated by failing to recognise provisions and impairment losses for the project; in the KPMG suit they also alleged that INT FRS 112 was wrongly applied to the power plant.

In Suit 267 the plaintiffs alleged that Ms Lum breached her duties, caused wrongful trading and permitted dividends in breach of the Companies Act; in Suit 268 they alleged that KPMG was negligent in its audits. By Summons No 56 of 2024 and Summons No 144 of 2024, Ms Lum applied for the two suits to be heard together before the same Judge, with ancillary orders for common documents, service, hearings and evidence. KPMG supported her and asked that its suit be the lead action. The plaintiffs said the application was premature.

1. Whether the suits fell within one of the grounds in O 4 r 1(1) of the Rules of Court 2014
2. Whether a joint trial would save costs, time and effort and was not premature
3. Whether the ancillary orders on documents, service, hearings and evidence should be granted
4. Whether Suit 268 should be the lead action

The court first distinguished consolidation, which merges actions into one, from a joint trial, in which the actions keep their separate identity, and stressed precise use of those terms. Applying the two-stage framework in Yeo Su Lan (alias Yang Shulan) v Hong Thomas and others [2023] SGHC 44, it found common questions of fact and law: the plaintiffs pleaded the same facts about the misstatements, and almost identical losses, in both suits, and the claims arose out of the same alleged misstatements.

On the second stage, the overlapping issues were key and substantial, and most of the issues the plaintiffs called unique to one suit were relevant to the other, for example because Ms Lum pleaded reliance on KPMG and KPMG pleaded the board's representations and contributory negligence. Witnesses and documents would likely be the same. The court rejected the concerns about complexity and delay, since neither suit was close to trial, and held the application was not premature: waiting until all evidence was filed would waste the savings a joint trial offered. A joint trial would avoid repeated attendance, inconsistent findings and duplicated hearings.

The ancillary orders would manage documents, avoid separate discovery applications and improve case management, for the same reasons. As to the lead action, KPMG clarified it wanted its evidence led first; that could be decided nearer trial.

The court allowed the application, ordering that the two suits be tried jointly before the same Judge, and granted the ancillary orders sought. It declined at that stage to direct that Suit 268 be the lead action, leaving the order of evidence to be considered closer to trial. Costs were to be agreed or addressed by written submissions.