Anan Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2019] SGCA 41

Introduction

It would be stating the obvious that the quality of evidence adduced in any given case will have a material if not a critical bearing on its outcome. Cases are fought and more importantly decided on the basis of the evidence before the court. For this reason, the common law has developed rules and exceptions for the admission of fresh evidence following a trial or a hearing on the merits in order to balance the importance of finality in litigation and the proper and fair administration of justice.

Not infrequently, applications to introduce new evidence take place following a change of counsel. New arguments are raised for the appeal and quite often, such new arguments require fresh evidence to be adduced. Even though such fresh evidence might have been reasonably available to the parties for the hearing below, it was overlooked simply because it was not relevant for the purposes of the arguments which were pursued below. The case before us was precisely one such case and the rule in Ladd v Marshall [1954] 1 WLR 1489 (“Ladd v Marshall”) was raised by the respondent to resist the admission of fresh evidence to mount a new argument for the purposes of the substantive appeal. The key question before us was whether the Ladd v Marshall requirements should be strictly applied in the context of a winding-up order that was made pursuant to a statutory demand.

We heard and allowed the application on 24 May 2019 with brief oral grounds. In our view, the rule in Ladd v Marshall is to be applied contextually especially in circumstances such as the present case where there has been no trial and where there is potentially a dramatic difference in the balance of prejudice depending on the admission or exclusion of the fresh evidence. In such a situation, the fact that the evidence could have been adduced before the judge should not foreclose the grant of leave to adduce it for the purposes of the appeal. We also stated that we would issue detailed grounds in due course to fully explain our decision and to reconcile the different approaches to the application of the rule in Ladd v Marshall under different contextual settings. This, we do now.

Background facts

It is necessary to set out the background facts that gave rise to the present application as the relevance of the new evidence sought to be adduced can only be properly appreciated in that context.

The relationship between the parties

Pursuant to the GMRA, Anan sold VTB 35,714,295 EN+ GDRs for approximately US$250m, at which time EN+ shares were worth approximately US$13 per share. A few months later, on 6 April 2018, EN+ shares plummeted to about US$5.60 per share as a result of sanctions imposed on major shareholders of EN+ by the United States Treasury’s Office of Foreign Assets Control (“the OFAC sanctions”). On the same day as the OFAC sanctions (ie, 6 April 2018), VTB issued a margin trigger event notice, informing Anan that the Repo Ratio was at approximately 74.57%, thus exceeding the Margin Trigger Repo Ratio of 60%. In this notice, VTB asked Anan to top up a cash margin of approximately US$85m by 10 April 2018 purportedly in accordance with cl 2(a) of the GMRA. Anan failed to restore its collateral by transferring the cash margin within the stipulated timeframe.

On 12 April 2018, VTB sent a default notice to Anan, designating 16 April 2018 as the early termination date of the GMRA. According to this notice, two events of default had occurred – first, the Repo Ratio had exceeded the Liquidation Repo Ratio of 75%, thus constituting a liquidation event and an event of default under the GMRA; second, the Repo Ratio had exceeded the Margin Trigger Repo Ratio of 60% and Anan had failed to top up a cash margin of US$85m by 10 April 2018 as stipulated, and this constituted a further event of default under the GMRA.

The legal effect of an early termination under the GMRA was that the repurchase date was brought forward to the early termination date, such that Anan was required to repurchase the GDRs at the original purchase price plus accrued interests to this date. In other words, Anan was compelled to repay the “loan” to VTB on the early termination date. What then occurs in such a case is a setting-off of the payments owed by each party, which the non-defaulting party is entitled to calculate.

On 24 April 2018, VTB as the non-defaulting party sent a calculation notice to Anan stating that an outstanding debt of some US$170m was owing. This sum was arrived at by calculating the outstanding amount owed (ie, the purchase price plus interests), minus the total value of the GDRs held by VTB, which VTB ascertained to be worth US$2.50 each. VTB had arrived at the figure of US$2.50 by calling for quotations from 14 institutions, of which only two responded with indicative quotes of US$1 and US$5. VTB then purported to take an arithmetic mean of the two quotations to arrive at the valuation of US$2.50 per GDR. It would be self-evident that this arithmetic average was erroneous. The average of US$1 and US$5 is US$3 and not US$2.50, though it would appear that this error might not be crucial for present purposes.

On 23 July 2018, VTB served a statutory demand for the sum of approximately US$170m, which sum Anan failed to repay within the three- weeks period. This statutory demand then formed the basis of the winding-up petition, HC/CWU 183/2018 (“CWU 183”), presented by VTB against Anan.

The proceedings below and the substantive appeal in CA 174

The High Court judge (“the Judge”) granted the application in CWU 183 and ordered Anan to be wound up (see, VTB Bank (Public Joint Stock Co) v Anan Group (Singapore) Pte Ltd [2018] SGHC 250). The main point of contention in that hearing centred on the applicable standard of proof of a disputed debt when that debt is subject to an arbitration agreement between the parties. As this issue is anticipated to take centre stage in the substantive appeal in CA/CA 174/2018 (“CA 174”), we shall say no more of the matter here. The Judge found Anan’s arguments on frustration and force majeure to be unconvincing. The Judge also found that Anan had deliberately failed to particularise its case on the issue of the quantification of the debt, because it knew that in any case a substantial debt far in excess of the statutory insolvency threshold of $10,000 would be owing and that this debt would provide a sufficient basis for the granting of a winding-up order. We should add that Anan is no longer pursuing the frustration and force majeure arguments for the purposes of the appeal.

The substantive appeal in CA 174 thus focuses on two issues: first, the applicable standard of proof where a debt governed by an arbitration agreement is disputed; second, whether this standard of proof is met in the instant case given the dispute over the quantum of debt owed by Anan to VTB.

The present application was filed by Anan to adduce new evidence for CA 174 in the form of the affidavit of Andrew Ooi Lih De dated 22 March 2019 which exhibited a report prepared by Deloitte (the “Deloitte Report”). The Deloitte Report opines that the GDRs ought to have been valued at between US$8.01 and US$8.68 each as at the early termination date of 16 April 2018. The Deloitte Report further comments on the methodology adopted by VTB in arriving at its valuation of US$2.50. The implications of this are clear – if the valuation in the Deloitte Report were to be adopted, it would mean that the GDRs were collectively worth between US$286m and US$310m as at 16 April 2018, and thus that no debt was due and owing from Anan to VTB at the material time.

VTB opposed the application on the basis that the requirements in Ladd v Marshall had not been satisfied. Notably, it took the position that the first requirement of non-availability had not been fulfilled – it argued that the Deloitte Report could clearly have been adduced in CWU 183 or before, and Anan has not provided any reasons to explain why it was not adduced before the Judge. On the other hand, Anan argued that the requirement of non-availability should not be applied strictly in the present case given that the hearing below did not have the characteristics of a full trial.

It became evident at this juncture that the parties’ respective positions were poles apart as regards the applicability of Ladd v Marshall to the present summons, and it is to this issue that we shall now examine.

Analysis: the rule in Ladd v Marshall

The statutory background

It is necessary to first set out the statutory background to the present application, particularly given the recent amendments to the relevant legislation.

Section 37 of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“SCJA”) makes clear that further evidence may be given on appeal without leave in relation to matters which have occurred after the decision of the judgment below, but that for further evidence in relation to matters which occurred before the date of such decision, leave must be sought from the Court of Appeal, and such further evidence may only be adduced on “special grounds”. Whereas the previous iteration of s 37(4) of the SCJA provided that the threshold of “special grounds” applied only to “appeals from a judgment, after trial or hearing of any cause or matter upon the merits”, this phrase has since been removed by the Supreme Court of Judicature (Amendment No 2) Act 2018 (Act No 46 of 2018), and the provision which took effect as of 1 January 2019 reads as follows:

The above is consistent with O 57 r 13(2) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”). The previous iteration of O 57 r 13(2) stated that in an appeal from a “judgment after a trial or hearing of any cause or matter upon the merits”, no new evidence may be admitted on appeal except “on special grounds”. However, this reference to “judgment after a trial or hearing of any cause or matter upon the merits” was similarly removed from O 57 r 13(2) via the Rules of Court (Amendment No 4) Rules 2018 (S 850/2018) which similarly took effect from 1 January 2019. The version of O 57 r 13(2) in force at the time of the present application as well as at the time of writing thus reads as follows:

The criteria of “special grounds” are not defined in the statutes, but the courts have consistently interpreted it to refer to the threefold requirements in Ladd v Marshall: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial or hearing; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible (see eg, Toh Eng Lan v Foong Fook Yue and another appeal [1998] 3 SLR(R) 833 at [34], ARW v Comptroller of Income Tax and another and another appeal [2019] 1 SLR 499 (“ARW”) at [99]). These three requirements have been referred to respectively as the criteria of non-availability, relevance and credibility.

The genesis and rationale of the rule in Ladd v Marshall

It is perhaps apposite to begin our analysis by examining the very case which developed the principles for the admission of new evidence. Ladd v Marshall was an appeal against the decision of the trial judge on the issue of whether the appellant had indeed paid a sum of GBP1,000 to the respondent over and above the contracted sum of GBP2,500 for the sale of a house. During the trial, the respondent’s wife testified that she had no recollection of the matter. On appeal, the appellant sought to adduce fresh evidence in the form of a further affidavit from the respondent’s wife, who had since divorced the respondent, in which she said that she did witness the appellant giving GBP1,000 to the respondent, and that she had given false evidence during the trial out of fear of her then-husband. Denning LJ (as he then was) held that where fresh evidence is sought to be adduced, the three conditions quoted above must be fulfilled. The Court of Appeal rejected the application for a fresh trial on the basis of the new evidence, as the third limb was not satisfied – a witness who has confessed to have lied cannot usually be accepted as being credible unless some good reason was shown why a lie was told in the first instance and why the witness will tell the truth on the second occasion, and in the present case there was nothing to show that the respondent’s wife was in fear of the respondent or had been coerced to lie at the trial.

In Ladd v Marshall, Hodson LJ also made reference to the earlier decision of the House of Lords in Brown v Dean [1910] AC 373, which was said to have provided guidance on the issue in the speech (at 374, per Lord Loreburn LC):

Whereas Hodson LJ noted that the requirement of such fresh evidence being “conclusive” had been relaxed by more recent cases, it is clear that the quoted passage reveals the underlying rationale behind the rule in Ladd v Marshall – the interests of finality in litigation, as encapsulated by the Latin maxim interest reipublicae ut sit finis litium. A final judgment that has been rendered in a litigant’s favour should not be disturbed unless there are good reasons to do so.

A further and related rationale behind the Ladd v Marshall rule can be stated as such. In order to ensure the integrity of the litigation process and the soundness of the resulting judgment, the trial must be conducted on a basis of fairness as between the parties and in accordance with the principles of natural justice. By imposing strict requirements that prohibit the introduction of fresh evidence on appeal unless special grounds are shown, the Ladd v Marshall rule advances the policy of requiring parties to “advance their entire case at trial, and not deliberately leav[e] over points for the purpose of appeals (and thereby obtaining a ‘second bite at the cherry’)” (Blackstone’s Civil Practice 2018: The Commentary (Maurice Kay, Stuart Sime & Derek French, eds) (Oxford University Press, 7th Ed, 2018) at para 72.17, see also Hertfordshire Investments Ltd v Bubb and another [2000] 1 WLR 2318 at 2324). In other words, the Ladd v Marshall rule incentivises parties to abide by fundamental principles of fairness in their conduct of the trial, and not to resort to the excessive use of strategic ploys to gain unfair advantages. This is in many ways the flipside of the principle of finis litium enunciated above – as Laddie J noted in the case of Saluja v Gill (t/a P Gill Estate Agents Property Services) and another [2002] EWHC 1435 (Ch) at [24]:

The two aforementioned rationale behind the Ladd v Marshall rule – that of finality of litigation and the interests of fairness for parties to advance their entire case at trial, were more recently espoused in the following dicta of Lord Woolf CJ in Taylor and another v Lawrence and another [2003] 1 QB 528 (at [6]):

In our view, it is clear that the interests of finality and the fair administration of justice are desirable and fundamental principles of law which undergird the rule in Ladd v Marshall, but that these are not unassailable objectives that would always be consistent with the ends of justice in every case. With this in mind, we now proceed to examine the various contexts in which the application of Ladd v Marshall has been relaxed as this analysis provided the underlying basis for our decision in allowing the application.

Applicability of Ladd v Marshall depending on the nature of the proceedings below

It is apparent from the statutory framework set out in s 37 of the SCJA and O 57 r 13(2) of the ROC that there are situations in which the requirements in Ladd v Marshall need not be strictly satisfied. Thus, where the evidence relates to matters which occurred after the date of the decision below, s 37(3) SCJA stipulates that such evidence may be produced without seeking leave of the Court of Appeal, and there would thus be no need for the applicant to cross the statutory threshold of demonstrating “special grounds”. This is not to say however that the appellate court will necessarily admit all such evidence, because even in such circumstances the “underlying interest in upholding the finality in litigation should nonetheless be protected” (BNX v BOE and another appeal [2018] 2 SLR 215 at [97], citing Yeo Chong Lin v Tay Ang Choo Nancy and another appeal [2011] 2 SLR 1157 at [13]).

Prior to the recent amendments of the SCJA and the ROC, an applicant seeking to adduce fresh evidence on appeal need not demonstrate “special grounds” unless the appeal was against a “judgment after a trial or hearing of any cause or matter upon the merits”. It might thus be said that in such cases, Ladd v Marshall was prima facie inapplicable. As stated above, the recent amendments to O 57 r 13(2) and s 37 SCJA have deleted the reference to the phrase “judgment after a trial or hearing of any cause or matter upon the merits” (see above at [19]–[20]). As the phrase has been the subject of some judicial scrutiny, we first examine the cases interpreting this phrase before commenting on the implications of the recent legislative amendments. We note at the outset that the parties have not specifically addressed us on these implications.

The distinction between a hearing “of any cause or matter upon the merits” and one that is not so can be most clearly illustrated by considering the case of summary judgments and default judgments. It was held in Langdale v Danby [1982] 1 WLR 1123 that Ladd v Marshall applies to appeals against summary judgment, because such a judgment is concerned with the existence of triable issues and is therefore based on the merits of the case, and disposes of the action in the same way as a final judgment at trial (at 1132):

The above position was subsequently endorsed by this court in Lian Soon Construction Pte Ltd v Guan Qian Realty Pte Ltd [1999] 1 SLR(R) 1053 at [37].

By contrast, Weller v Dunbar [1984] Lexis Citation 377 held that an order setting aside a default judgment is not a decision after a hearing on the merits, even though the merits are taken into account in deciding whether to set aside the default judgment, because the hearing on the merits in the shape of the trial of the action is yet to come. Relatedly, it has also been suggested that where an application for summary judgment is refused, or where conditional leave to defend is granted, such a decision is not arrived at after a hearing on the merits because the merits remain to be decided at the trial that follows (Singapore Civil Procedure 2019 vol 1 (Chua Lee Ming J gen ed) (Sweet & Maxwell, 2019) at para 57/13/10). This proposition appears to originate from the learned authors of The Supreme Court Practice 1991 (Jack Jacob eds) (Sweet & Maxwell, 1990) and finds support in English Court of Appeal cases such as Woodhouse v Consolidated Property Corporation Ltd [1993] 1 EGLR 174 and Whitehead Engineering Co v Barking Breweries Ltd [1988] Lexis Citation 1171. However, the English Court of Appeal has in other cases doubted the soundness of this proposition, observing that whether or not a hearing on the merits has taken place should depend on the nature of that hearing and not its outcome (see eg, Pearce v Ove Arup Partnership Ltd and others [2000] Ch 403 at 418–419; Electra Private Equity Partners v KPMG Peat Marwick [2001] 1 BCLC 589 (“Electra”) at 618–619). This thus appears to be an open point of law that remains to be settled. Since it is not of direct relevance to the present application and the parties have not addressed us on this point, we leave it to be resolved in an appropriate case in the future.

In an appeal that does not arise from a judgment or hearing on the merits, whether fresh evidence should be admitted lies in the unfettered discretion of the court. Thus, in interlocutory appeals, the strict principles of Ladd v Marshall are inapplicable (JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2018] 2 SLR 159 (“JTrust Asia”) at [54]). Even where the Ladd v Marshall principles have been applied, the first criterion of non-availability is often relaxed in recognition of the fact that interlocutory matters are “contested at an early stage of the litigation” where it may be “unjust to expect a party to have all his tackle in order” (JTrust Asia at [55], endorsing Electra at 621a–b -per Auld LJ).

The position that has emerged from the recent cases is more nuanced. The distinction is not so much that Ladd v Marshall is inapplicable where the appeal is not against a judgment after a trial or a hearing on the merits, but rather that in such cases it is in the court’s discretion as to whether the application of Ladd v Marshall is justified, and if so to what extent. It remains appropriate in such cases to use the Ladd v Marshall conditions as a guideline, or to apply the conditions with suitable modifications. This can be illustrated with a few notable decisions of this court.

In Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) [2004] 2 SLR(R) 392 (“Lassiter”), this court considered the applicability of Ladd v Marshall to a registrar’s appeal. It was held that a registrar’s appeal ought not to be treated in the same way as an appeal from the judge to a Court of Appeal, as the registrar is discharging a delegated function and there is no applicable provision like s 37(4) of the SCJA or O 57 r 13(2) of the ROC which stipulated that a judge in chambers should not receive further evidence on appeal in the absence of “special grounds”. However, the court in Lassiter nonetheless held that reasonable conditions must be set and a party should not be permitted to bring in fresh evidence as he pleases. Thus, whilst it would not be appropriate to impose the first condition of Ladd v Marshall strictly, the second and third conditions remain relevant (at [20]–[25]). Lassiter was subsequently clarified in WBG Network (S) Pte Ltd v Sunny Daisy Ltd [2007] 1 SLR(R) 1133 (“WBG Network”) at [11], which similarly concerned a registrar’s appeal to a judge in chambers. This court in WBG Network emphasised that the decision in Lassiter must be seen in the context of the specific circumstances before it, being an appeal against an assessment of damages from a lengthy action in tort and in which oral evidence was adduced. Thus, Lassiter does not stand for the broad proposition that the second and third conditions in Ladd v Marshall must apply in all circumstances, whether they be appeals from an assessment of damages before the registrar or in respect of interlocutory applications. Crucially, this court in WBG Network also opined as follows (at [13]–[14]):

The current position was succinctly summarised by the High Court in Park Regis Hospitality Management Sdn Bhd v British Malayan Trustees Limited and others [2014] 1 SLR 1175 (“Park Regis”) at [28]:

It is apparent from the foregoing that whether or not an appeal is against a “judgment after a trial or hearing of any cause or matter upon the merits” does not necessarily determine the applicability or otherwise of Ladd v Marshall. Rather, consistent with the summary in Park Regis which this court endorsed in ARW at [100], the cases should be analysed as lying on a spectrum. On one end of the spectrum, where it is clear that the appeal is against a judgment after a trial or a hearing having the full characteristics of a trial (ie, which involves extensive taking of evidence and particularly oral evidence), then it is clear that Ladd v Marshall should be generally applied in its full rigour. On the other end of the spectrum, where the hearing was not upon the merits at all, such as in the case of interlocutory appeals, then Ladd v Marshall serves as a guideline which the court is entitled but not obliged to refer to in the exercise of its unfettered discretion. For all other cases falling in the middle of the spectrum, which would include appeals against a judgment after a hearing of the merits but which did not bear the characteristics of a trial, then it is for the court to determine the extent to which the first condition of Ladd v Marshall ie, criterion of non-availability should be applied strictly, having regard to the nature of the proceedings below. In this regard, relevant (non-exhaustive) factors would include: (a) the extent to which evidence, both documentary and oral, was adduced for the purposes of the hearing; (b) the extent to which parties had the opportunities to revisit and refine their cases before the hearing; and (c) the finality of the proceedings in disposing of the dispute between the parties.

Once the type of proceedings appealed against are envisaged as lying on a spectrum in the above manner, it becomes clear that the recent amendments to the SCJA and the ROC and the deletion of the reference to “judgment after a trial or hearing of any cause or matter upon the merits” need not change the judicial philosophy adopted in the cases canvassed above. Section 37 of the SCJA and O 57 r 13(2) of the ROC as amended would require all parties seeking to adduce fresh evidence on appeal to seek leave of the Court of Appeal before producing such evidence, regardless of the nature of the decision appealed against. The amended provisions do not however preclude the courts from taking a nuanced approach towards the application of the Ladd v Marshall principles in determining whether special grounds exist for the introduction of fresh evidence, and in particular by taking into account the nature of the proceedings appealed against. We believe that the approach summarised at [34]–[35] above is a principled one that aptly balances the interests of finality in litigation with the need for a court to consider all relevant evidence in the exercise of its appellate jurisdiction.

Cases where Ladd v Marshall applied in a nuanced manner in the interests of justice

The above analysis, which focuses on the nature of the proceedings giving rise to the judgment appealed against, is only one facet of the inquiry which the court must undertake in determining the rigour with which the Ladd v Marshall principles should be applied. The cases reveal that even after the nature of the proceedings below have been considered, the fulfilment of the Ladd v Marshall conditions does not bind the court’s hands in admitting fresh evidence, and conversely the court is not prevented from admitting fresh evidence even in the absence of strict compliance with these conditions. Rather, the court retains its overarching discretion to act as the interests of justice require, which includes the discretion to admit new evidence despite the applicant’s failure to satisfy the conditions of Ladd v Marshall. Thus, this court has rightly cautioned that the Ladd v Marshall test should not be applied rigidly as if it were a statutory provision (Cheng-Wong Mei Ling Theresa v Oei Hong Leong [2006] 2 SLR(R) 637 (“Cheng-Wong Theresa”) at [39]; GAK v GAL [2013] SGCA 19 (“GAK v GAL”) at [32]).

The broad overarching principle may be simply stated that fresh evidence can be admitted, notwithstanding the non-compliance of the Ladd v Marshall conditions, in exceptional cases where it would affront common sense or a sense of justice to refuse leave to adduce fresh evidence (Chan Fook Kee v Chan Siew Fong [2001] 2 SLR(R) 143 at [9], echoing Lord Wilberforce in Mulholland v Mitchell [1971] AC 666 at 680A). This broad principle can be illustrated more concretely with reference to three categories of cases where Ladd v Marshall has been applied in a more nuanced and contextual manner, even though the judgment appealed against arose after trial or a hearing bearing the characteristics of a trial.

Where new evidence reveals fraud perpetrated on the court below

First and most notably, this court has held that it will exercise its discretion to admit new evidence even where the first Ladd v Marshall condition of non-availability has not been satisfied, where the new evidence revealed that “some deception, fraud or deliberate suppression of material evidence was perpetuated on the trial court by one party” (GAK v GAL at [33]). The case of Su Sh-Hsyu v Wee Yue Chew [2007] 3 SLR(R) 673 (“Su Sh-Hsyu”) is illustrative. Su Sh-Hsyu concerned an appeal against a decision not to set aside judgment entered against the appellant. The respondent had initiated the suit against the appellant for sums allegedly unpaid, and had testified that he had never signed a banking slip which the appellant claimed was evidence that the sum had already been paid. On appeal, the appellant sought leave to adduce an expert report by the Health Sciences Authority (“HSA”) showing that the respondent’s signature on the banking slip was genuine. This court found that the criterion of non-availability had not been satisfied – since the crux of the appellant’s case was premised on the respondent’s signature on the banking slip, the appellant should have and could have procured an expert report as to the authenticity of the signature for the hearing below. However, notwithstanding the non-compliance with the first Ladd v Marshall condition, this court allowed the HSA report to be adduced on the basis that it uncovered a possible fraud perpetrated by the respondent, and the court cannot sanction a judgment whose foundation has been tainted with fraud (at [36]):

As the quoted paragraph in Su Sh-Hsyu reveals, the reason for this relaxed approach towards the first limb of the Ladd v Marshall test is easily explicable – whereas finis litium is a desirable object in the administration of justice generally, the revelation of fraud perpetrated on the lower court would tip the scales of justice in the other direction. It would clearly be in the interests of justice to admit fresh evidence where such evidence would reveal that one of the parties has perpetrated a fraud on the lower court, and to rectify the miscarriage of justice that would otherwise result in allowing a judgment tainted with fraud to stand.

Where a party was prevented from adducing the fresh evidence during the hearing below

A second category of cases where non-compliance with the first Ladd v Marshall condition would not preclude the admission of fresh evidence relates to situations where the fresh evidence, whilst available at the trial or hearing below, was not allowed to be adduced through no fault of the applicant. Thus, where a party was denied a fair opportunity by the trial judge to put forth relevant facts before the court, or where the trial judge made a decision on a substantive point that parties had not had the opportunity to address, the fact that the first condition of non-availability has not technically been fulfilled should not be held against the applicant (see GAK v GAL at [33]; Wong Phila Mae v Shaw Harold [1991] 1 SLR(R) 680 (“Wong Phila Mae”) at [16]; Cheng-Wong Theresa at [40]–[45]).

In Cheng-Wong Theresa for example, the appellant was allowed to adduce new evidence on appeal to show that development approval of a property had been granted by the relevant authorities. Even though evidence of such approval could have been obtained for the trial below, the issue of the approval for the development had not been raised during the hearing, and surfaced for the first time in the judge’s grounds of decision. This court noted that if the point had been raised during the hearing, the plaintiff could have easily brought in the new evidence without having to fulfil the conditions in Ladd v Marshall. This amounted to “exceptional circumstances” which justified the relaxation of the rule in Ladd v Marshall (at [45]).

In our analysis, the same outcome in Cheng-Wong Theresa could have been arrived at without any “relaxation” of the Ladd v Marshall rule, but rather by way of a purposive interpretation of the first criterion of non-availability. The first condition requires that the fresh evidence sought to be adduced could not have been obtained with reasonable diligence for use at the hearing or trial below – the party seeking to adduce the new evidence must satisfy the court that he has made all “reasonable cogent and positive efforts in the pursuit of obtaining the best evidence to prove his case” (Re Lim Hong Kee David [1995] 4 MLJ 564 at 572, endorsed in Sim Cheng Soon v BT Engineering Pte Ltd and another [2006] 3 SLR(R) 551 at [10]). In cases where a party was denied a fair opportunity to advance certain evidence at the hearing, such as where the point was simply not in issue at the hearing, then it is arguable that the evidence could not have been adduced at the hearing with reasonable diligence, even if it could have been obtained. This is consistent with the interpretation of the criterion of non-availability by this court in Public Prosecutor v Mohd Ariffan bin Mohd Hassan [2018] 1 SLR 544 (“Mohd Ariffan”), albeit in a criminal context (at [68]–[69]):

In other words, where a party was prevented from adducing the evidence at trial through no fault on its part, the first condition of non-availability is actually satisfied, and there is no need for any relaxation of the Ladd v Marshall requirements. In any case, whether the analysis be one based on the fulfilment of the criterion of non-availability or a relaxation of the Ladd v Marshall rules, allowing applications to adduce fresh evidence in such circumstances is clearly justified. Where a judgment under appeal was rendered in denial of natural justice, then the interests of finality must give way to the greater concern that the parties had reasonable opportunity to advance their entire case at the hearing.

We pause to briefly address a related point. Just as a party who was unfairly denied an opportunity to advance his entire case at a hearing should not be prevented from adducing fresh evidence on appeal, conversely, a disappointed party will not be allowed to retrieve lost ground by relying on evidence he should have put before the court below, especially when he has expressly elected to withhold that evidence (JTrust Asia at [55], Jurong Town Corp v Wishing Star Ltd [2004] 2 SLR(R) 427 at [27]). It is also helpful in this regard to consider the English case of Khetani v Kanbi [2006] EWCA Civ 1621 (“Khetani”). In that case, the appellant had deliberately chosen to proceed with trial notwithstanding that certain relevant documents did not become available before the trial. Lindsay J (with whom Chadwick and Thomas LJJ agreed) noted (at [28]) that even though the Ladd v Marshall conditions had technically been satisfied, in that both parties had sought to obtain the documents before trial with reasonable diligence but were unable to do so, the appellant had resisted adjournment and elected to proceed without the documents in full cognisance of the risks of doing so. Thus, despite the compliance with the Ladd v Marshall conditions, Lindsay J opined (at [29]) that it was an abuse of process for a party to deliberately proceed without certain evidence, resisting adjournment for this purpose, and then after losing the case to seek to adduce that evidence on appeal.

Where the subject matter of the dispute was of such a nature that it was in the interests of justice to allow the admission of new evidence

In this last and most substantive category of cases, the focus of the inquiry is on the subject matter of the dispute. In certain types of cases, and particularly where the stakes of any adverse finding in the absence of the new evidence are especially high, it would be appropriate for the court to relax the Ladd v Marshall conditions in the interests of justice. Just as, in the words of Lord Wilberforce in The Ampthill Peerage [1977] AC 547 (see above at [25]), there are “cases where the certainty of justice prevails over the possibility of truth”, there are also cases where the converse is true, and the interests of finis litium must be subordinated to the overriding importance of ascertaining the truth of the matter. We discuss here four subcategories of such cases which have been established by the precedents, although we caution that these are not closed categories, and neither does the mere fact of a case falling within one of these categories automatically justify a relaxation of the Ladd v Marshall rule.

Cases involving the welfare of children

Cases involving the welfare and custody of children would be one such example where it might be important to investigate the possibility of truth at the expense of finality. Thus, the rule in Ladd v Marshall has at times been relaxed in the appropriate cases, although not without due regard for the desirability of finis litium, as the English Court of Appeal explained in Re S (Discharge of Care Order) [1995] 2 FLR 639 (“Re S (Discharge of Care Order)”) at 646:

Thus, in Wong Phila Mae which concerned the custody and care arrangements of children to a divorce, this court found that the appellant should have been granted an adjournment so that further affidavits may be obtained to refute adverse allegations made against her second husband. Given that it was not clear whether the High Court judge had disregarded those allegations in arriving at his determination of the dispute, further affidavits were thus allowed to be adduced on appeal so as to ensure that both sides had a fair opportunity of addressing all material facts (at [16]). Similarly, in Re S (A Child) (Abduction: Custody Rights) [2002] 1 WLR 3355, the English Court of Appeal considered a case in which a mother opposed her child’s return to Israel pursuant to the Hague Convention on the Civil Aspects of International Child Abduction on the grounds of the mounting security threats in Israel, and opined that in a case where interests of the child are engaged alongside the country’s international treaty obligations, the court is not likely to refuse to admit fresh evidence (at [26]). Although the application to admit fresh evidence in that case pertained to facts and matters which arose after the decision under appeal, it is conceivable that the same principles should apply in the appropriate cases in relation to evidence that existed before the decision under appeal.

However, not every case involving the interests of children should see a relaxation of the rule in Ladd v Marshall in favour of admitting all evidence that might have a bearing on the outcome of the appeal. As the court in Re S (Discharge of Care Order) (at [47] above) took pains to emphasise, the interests of children and the statutory regime governing the proceedings in this area often mean that the finality of proceedings remains a valid if not a heightened consideration. Thus, in Webster and another v Norfolk County Council and others; Re Webster (Children) [2009] 2 All ER 1156, after quoting the same paragraph from Re S (Discharge of Care Order) on the relaxation of the Ladd v Marshall rules, the court nonetheless rejected the biological parents’ application to adduce further evidence regarding the cause of their children’s injuries which led the court to free them for adoption some five years ago. In doing so, the court found that the criterion of non-availability was not satisfied (at [180]), and was also cognisant that as a matter of public policy the finality of adoption orders should only be disturbed in the most exceptional of circumstances (at [148]).

Criminal and quasi-criminal proceedings

Criminal proceedings where the livelihood, liberty or even life of the accused person is at stake is also another clear category of cases where Ladd v Marshall conditions ought to be relaxed in the appropriate case in the interests of justice, so that the court can consider all material evidence before arriving at a final decision on the accused person’s guilt or the appropriate sanction to impose. Thus, in Mohammad Zam bin Abdul Rashid v Public Prosecutor [2007] 2 SLR(R) 410, this court departed from previous authorities which applied Ladd v Marshall strictly to applications to adduce fresh evidence in criminal appeals, and took the view that whilst Ladd v Marshall conditions were “valid and reasonable considerations”, the appellate court had to remain “mindful of the higher burden of proving guilt in a criminal case” (at [7]). This less restricted approach was preferred by the High Court in Soh Meiyun v Public Prosecutor [2014] 3 SLR 299, which further stated that the first criterion of non-availability ought not to be held against the accused person, and that an appellate court exercising criminal jurisdiction should generally allow additional evidence which fulfils the second and third Ladd v Marshall conditions to be admitted (at [16]):

The above approach was endorsed in Iskandar bin Rahmat v Public Prosecutor and other matters [2017] 1 SLR 505 (at [72]), and further clarified in Mohd Ariffan, in which this court held that the conditions in Ladd v Marshall should continue to apply in an unattenuated manner to applications by the Prosecution to admit further evidence in a criminal appeal. In other words, the relaxation of the first criterion of non-availability would only operate in favour of applications by accused persons. This court explained the difference in treatment of applications by accused persons and the Prosecution on the basis of three main reasons (Mohd Ariffan at [57]–[60]):

For similar reasons, the Ladd v Marshall requirements have also been held not to apply with full rigour in the context of contempt proceedings, given the quasi-criminal nature of such proceedings (Tay Kar Oon v Tahir [2017] 2 SLR 342 at [29]).

Judicial review cases

The English Court of Appeal in R v Secretary of State for the Home Department ex parte Momin Ali [1984] 1 WLR 663 at 670 opined that the rule in Ladd v Marshall had no place in the context of public law and judicial review, but that the principles therein, namely that there be finality in litigation, remain applicable subject to the discretion of the court to act as the wider interests of justice so require. This was subsequently endorsed in Regional Centre for Arbitration v Ooi Beng Choo and another [1998] 2 MLJ 383. There have been as yet no local cases on this issue, but we agree in principle that where wider public interests are engendered, as is often the case in judicial review proceedings, then the court should certainly retain the discretion to admit fresh evidence despite the non-compliance with the Ladd v Marshall conditions.

Patent disputes

One last notable area of law in which the courts have adopted a nuanced approach to the applicability of Ladd v Marshall is that of patent disputes. In Martek Biosciences Corp v Cargill International Trading Pte Ltd [2011] 1 SLR 1287 this court noted the differences between O 57 r 13(2) and O 87A r 13(2) of the ROC, which concerned appeals under the Patents Act (Cap 221, 2005 Rev Ed), and acknowledged that proceedings before the Patents Registrar were in some ways akin to a full trial and thus that it would be “highly undesirable to freely permit parties, after the Patents Registrar has decided a matter, to adduce further evidence in an appeal from the Patent Registrar’s decision to the High Court”. However, this court went on to note the special character of patent proceedings (at [14]):

This court then noted the importance of exercising discretion under O 87A r 13(2) in a principled manner for the sake of certainty, whilst meeting the ends of justice in specific cases, and endorsed the non-exhaustive factors enumerated by Laddie J in Hunt-Wesson Inc’s Trade Mark Application [1996] RPC 233, a case concerning an appeal against the dismissal of an opposition to a trade mark application registration.

Summary

Having briefly canvassed the four areas of law above, we should make some concluding observations before summarising the guiding principles in this area as a whole. There is a common thread running through the four seemingly disparate areas of law – these are cases where, due to the subject matter in question, the stakes of the dispute are either particularly heightened for the individuals concerned (as in the cases involving the welfare of children or in criminal and quasi-criminal cases), or where the dispute engenders not just the personal interests of the particular litigants but also the wider public interest (as in the case of judicial review proceedings or patent disputes). In such circumstances, in exercising its overarching discretion to act as the interests of justice require, the court may at times find it appropriate to relax the strict application of the Ladd v Marshall requirements, and to allow fresh evidence to be adduced notwithstanding the non-compliance of the first criterion of non-availability.

Summary of principles

Before turning to the present application, it is appropriate at this juncture to tie up the different threads of analysis above to develop a framework that would provide guidance in future cases. The foregoing discussion reveals a two-step analysis that ought to be considered by a court dealing with an application to adduce fresh evidence on appeal.

First, the court should consider the nature of the proceeding below and evaluate the extent to which it bears the characteristics of a full trial, or whether it more closely resembles an interlocutory appeal. In this regard, the remarks in Park Regis remain pertinent, and we are of the view that the recent amendments to the SCJA and the ROC do not undermine its soundness (see above at [34]–[36]). In appeals against a judgment after trial or a hearing bearing the characteristics of a trial, the interests of finality assume heightened importance, and the court should apply the requirements in Ladd v Marshall with its full rigour, subject to the second stage of the analysis. On the other hand, in interlocutory appeals or appeals arising out of hearings which lack the characteristics of a trial, the court remains guided by the rule in Ladd v Marshall but is not obliged to apply it in an unattenuated manner.

If having determined at the first stage of the analysis that Ladd v Marshall should be applied strictly due to the nature of the proceedings below, the court should then proceed to the second stage of the analysis to determine if there are any other reasons for which the Ladd v Marshall requirements should be relaxed in the interests of justice. As canvassed above, we broadly think that such cases would fall into three categories – where (a) the new evidence reveals a fraud that has been perpetrated on the trial court (at [39]–[40] above); (b) the applicant was prevented from adducing the fresh evidence during the hearing below in circumstances which amount to a denial of natural justice (at [41]–[44] above); and (c) where the subject matter of the dispute engenders interests of particular importance whether to the litigant or to the society at large (at [46]–[55] above). In each of these categories, the court is entitled to determine whether Ladd v Marshall should be relaxed in the particular circumstances of the case so as to achieve justice on the facts.

In the final analysis, the court is in every instance conducting a balancing exercise between the interests of finality of proceedings and the entitlement of a successful respondent to rely on a judgment in his favour on the one hand, and the right of the applicant to put forth relevant and credible evidence to persuade the appellate court that the justice of the case lies with him. In this regard, this court’s comments in Mohd Ariffan on the considerations of proportionality and prejudice are of broader relevance even beyond the scope of criminal cases (at [72]):

In assessing the proportionality of the application, it would be pertinent to consider factors such as whether the evidence sought to be adduced could be addressed by the respondent by way of a reply affidavit, for which any prejudice caused to the respondent can be compensated by costs in contrast to the inquiry whether the interests of the applicant or third party would be irreparably harmed should the application be refused. With this in mind, we now proceed to apply the above principles to the case at hand.

Analysis of the present case

We consider first the nature of the proceedings below. VTB is certainly right to argue that winding-up hearings are hearings on the substantive merits of the case and go beyond dealing with interlocutory matters of procedure. CWU 183 can thus be distinguished from the proceedings in Re a Debtor [1996] 1 WLR 379, in which the court held that a hearing on the application to set aside a statutory demand was not a hearing on the merits, since the existence or otherwise of the underlying debt or counterclaim is not determined by the application but will only arise, if at all, in subsequent proceedings on the bankruptcy petition. However, it is also indisputable that CWU 183 did not bear the characteristics of a full trial. In particular, there was limited taking of evidence and any evidence that was led was purely by way of affidavits, with no oral evidence or cross-examination of witnesses. Further, the timelines leading to the hearing of CWU 183 were very compressed – barely two months passed from the date of the statutory demand to the date of the hearing, which meant that the parties had limited time to refine their cases. Lastly, there is some force in the argument that the winding-up order itself lacks finality to the extent that the liquidator can subsequently revisit the same issue of the quantification of debt at the proof of debt stage. Whether a liquidator can do so in respect of a debt premised on a statutory demand does not appear to have been adjudicated upon by our courts, but in our view this would be consistent with a liquidator’s statutory and common law duties to examine the basis of every proof of debt filed, which include extensive powers to go behind documents and to re-evaluate even judgments and compromise agreements (see Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd [2009] 4 SLR(R) 458 at [20]; Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed) r 92).

VTB relied on the case of Foo Peow Yong Douglas v ERC Prime II Pte Ltd and another appeal and other matters [2018] 2 SLR 1337 (“Douglas Foo”) in support of its position that Ladd v Marshall would apply strictly to an appeal against a winding-up order. In Douglas Foo, this court applied the Ladd v Marshall test without any discussion on whether it ought to be relaxed given the nature of the proceedings. However, Douglas Foo occurred under vastly different circumstances than the present case. The company that was sought to be wound up in that case was a special purpose vehicle set up to hold the investment in property development projects, which projects then spawned several other legal proceedings premised on minority oppression and misapplication of investment funds. The appellant sought to wind up the company on the basis that the substratum of the company had been lost given the end of the development project, and the fact that he had no confidence that the company’s directors would ensure proper distribution of substantial sums held in escrow. The company had no objections to being wound up after the dispute over the escrow sum had been resolved. The High Court judge agreed with the company that its substratum was not lost until that dispute had been resolved, and disagreed with the appellant that the past conduct of the company’s directors meant that they would siphon away its share of the escrow sum. Ultimately, the judge also found that even if the statutory grounds for winding up were technically established, the court retained residual discretion to consider all relevant factors, which in this case included the company’s lack of objection to being wound up following the resolution of the dispute over the escrow sum; that winding up the company would unnecessarily complicate a related party’s defence in the claim for the escrow funds; and that it would entail unnecessary expense in requiring a liquidator to distribute the company’s share of the escrow sum.

On appeal, the appellant sought to adduce new evidence in relation to the company directors’ disqualification, convictions and criminal charges, and the respondent company sought to adduce new affidavits that purportedly revealed the appellant’s true motivation in seeking the winding-up order. These applications were rejected by the Court of Appeal on the basis of non-compliance with the Ladd v Marshall requirements. Even though the appeal technically related to a hearing of a winding-up application which did not involve the taking of evidence by oral hearing, it is clear that it arose in the context of several other ongoing and concluded legal disputes, for which considerable evidence had been adduced, both orally as well as affidavit evidence.

Thus, in view of the nature of the proceedings in question, the criterion of non-availability in Ladd v Marshall ought not to be applied strictly to Anan’s application in the instant case. It is true that Anan could have and ought to have procured the Deloitte Report for the purposes of the hearing below, but the fact that it did not do so should not be fatal to the present application, particularly if the Deloitte Report is potentially relevant to the appeal. We note further that this was not a case where Anan had decided to withhold the argument on quantification of debt so as to spring it on appeal, but rather that it had decided to run its case based on arguments of frustration or force majeure but such arguments had failed before the High Court. There was no question of abuse of process (see above at [45]), and Anan’s decision to mount the arguments in CWU 183 below (for which the Deloitte Report would not be relevant) was perhaps not unreasonable given the compressed timelines of the proceedings below. Our analysis might well have been different had the proceedings below been a protracted one in which parties had every chance to refine and revisit their cases and pleadings before the hearing, and having elected to proceed with one argument instead of another, Anan then sought to retrieve lost ground on appeal.

During the hearing before us, VTB argued that there was no conceivable universe in which the Deloitte Report would be relevant. On its case, the GMRA contemplated a contractual regime in which the non-defaulting party (here, VTB) had wide-ranging discretion to determine the valuation of the GDRs without having to undertake any ground-up valuation methodology such as those employed in the Deloitte Report. We did not find this argument persuasive. It was clear that Anan’s argument was not that the GMRA obliged VTB to undertake any particular type of valuation, but rather that the valuation should be reasonable. After all, the material provision in the GMRA ie, cl 10(e)(iii), states that the “net value” means:

Whilst this clause undoubtedly conferred VTB considerable discretion in its choice of the valuation method, it nonetheless required VTB’s opinion of the net value of the GDRs to be “reasonable”. We express no view as to whether the Deloitte Report and the opinions therein are ultimately relevant to the merits of the appeal in CA 174, but it is clear that it has potential relevance at least to the issue of the reasonableness of VTB’s valuation of the GDRs which goes to the very root of the debt claimed by VTB.

Ultimately, we were persuaded by the considerations of proportionality in this case. If we were to reject Anan’s application to adduce the Deloitte Report for CA 174, we cannot, at this stage, discount the possibility that Anan’s substantive appeal might fail, given that Anan has abandoned its case on frustration and force majeure. This must be balanced against Anan’s case on appeal which relies solely on the quantification of the debt as the factual basis to oppose the winding-up order. It seems to us that if the valuation of the GDRs in the Deloitte Report were to be adopted, it would follow that no debt would be owing to VTB. Further, if the quantum of the debt was considerably lower than the US$170m claimed by VTB in the statutory demand, it cannot be assumed that Anan would not be able to either top up the collateral or to pay off the reduced debt. In either situation, the winding-up petition would be denied.

Conclusion