Absolute Kinetics Consultancy Pte Ltd v Seah Yong Wah (Singapore Telecommunications Ltd, non-party)

[2] SUM 3742 came before me over three hearings. The first hearing on 25 September 2018 (the “First Hearing”) was adjourned as the summons had not been served on the defendant (as required by O 24 r 6(2) of the ROC). Thereafter, I heard parties on their substantive arguments on 30 October 2018 (the “Second Hearing”) and 14 December 2018 (the “Third Hearing”) and granted the application. These are the grounds of my decision.

[3] The plaintiff, Absolute Kinetics Consultancy Pte Ltd, is a company which deals in the sale of Singtel Easy Mobile Top Up Credits (“Credits”). The defendant, Seah Yong Wah, was the plaintiff’s former employee.

[4] S 1149 was commenced by the plaintiff on 7 December 2017. The plaintiff’s claim against the defendant involves three business entities: (a) a company known as Afronco Pte Ltd (“Afronco”); (b) a company known as Nirja Mini Mart Pte Ltd (“Nirja”); and (c) a sole proprietorship known as M/s Rene Rene Trading (collectively, the “Three Entities”). The plaintiff alleges that the defendant’s modus operandi in respect of each of the Three Entities was similar. This can be summarised as follows:

(a) The defendant purported to submit various forms on behalf of the Three Entities. These forms were purportedly signed by individuals from each of the Three Entities, and were applications for the Three Entities to act as the plaintiff’s retailer of Credits and for the purchase of Credits to be delivered to mobile telephone numbers which were ostensibly registered to the Three Entities.

(b) In the case of Nirja, the defendant also submitted a form to request that the name of Nirja as retailer be changed to that of “NJ Minimart” (“NJM”). This form was signed by an unknown person purportedly on behalf of both Nirja and NJM. In the rest of these grounds of decision, no distinction will be drawn between Nirja and NJM.

(c) In the case of Afronco and Nirja, the defendant also submitted forms to request that Credits be delivered to other mobile telephone numbers which were ostensibly registered to Afronco and Nirja, instead of to some of the mobile telephone numbers referred to in [4(a)] above. These forms were signed by unknown persons purportedly on behalf of Afronco and Nirja respectively.

[5] The plaintiff claims that the various signatures were forged by the defendant or on the instructions of the defendant to fraudulently get the plaintiff to appoint the Three Entities as its retailer of Credits and to sell and deliver Credits to the Three Entities. Pursuant to the various forms and subsequent orders placed by the defendant (purportedly on behalf of the Three Entities), the plaintiff sold and delivered Credits to various mobile telephone numbers. As it turned out, however, these mobile telephone numbers were not registered to the Three Entities, and the Three Entities therefore did not obtain the benefit of the Credits.

[6] The plaintiff’s case is that the various mobile telephone numbers were registered to the defendant or to a person or entity controlled by the defendant, and subsequently sold for a profit. The plaintiff’s claim in S 1149 arises out of this alleged fraud, and is for Credits, totalling $870,594.94, that it had delivered to the various mobile telephone numbers, and which remain unpaid.

[7] SUM 3742 was taken out on 15 August 2018 against the non-party, Singapore Telecommunications Limited, a leading telecommunications service provider in Singapore. As already noted at [1] above, SUM 3742 was, as originally framed, an application pursuant to O 24 r 6(2) of the ROC. Indeed, this much was expressly stated on the face of SUM 3742 itself. The main prayer, prayer 1, read as follows:

[8] In turn, Schedule 1 of SUM 3742 read as follows:

[11] In its written submissions, the plaintiff submitted that the requested documents existed in the non-party’s possession. Further, the plaintiff claimed that the requested documents were clearly relevant and necessary as the plaintiff was looking to identify or confirm that the defendant and/or his related entities were the registered owner(s) of the eight mobile telephone numbers and the recipient of the plaintiff’s supply of Credits. In the alternative, if the defendant and/or his related entities were not found to be the registered owner(s) of the eight mobile telephone numbers, the plaintiff would then have the requisite information and pursue the action in S 1149 against the correctly-identified party.

[12] In its further written submissions, the plaintiff added that it was relevant and necessary to determine the registered owner of the eight mobile telephone numbers so that the involvement of other parties (if any) could be revealed or linked to the defendant’s conduct. Where necessary, the plaintiff would also be able to consider if any other party (if any) ought to be included as a defendant or called as a witness at trial.

[13] On its part, the non-party submitted, in its written submissions, that the plaintiff had not shown the relevance or necessity of the information it was seeking in SUM 3742 for the following reasons:

(a) First, the plaintiff did not appear to have undertaken a full consideration of the relevance of the information sought by reference to the pleaded issues in S 1149.

(b) Second, the plaintiff’s supporting affidavit in SUM 3742 attested to the defendant’s admission of personal liability for all the unpaid Credits purportedly sold to the Three Entities. This being the plaintiff’s position, it was not apparent why the information which was sought would be relevant or necessary. In addition, the defendant, in his first affidavit filed in SUM 3742, had admitted that he had used some of the eight mobile telephone numbers to purchase Credits.

(c) Third, the plaintiff had not explained what it intended to do with the information which was sought. In particular, the plaintiff had not indicated whether it was seeking the information to: (i) prosecute its claim against the defendant in S 1149; or (ii) identify other potential wrongdoers it intended to bring claims against. If the plaintiff intended to bring proceedings against other potential wrongdoers, the non-party would seek to highlight certain safeguards for the Court’s consideration.

[15] In light of the above, the issues that I had to consider were:

(a) whether SUM 3742 could be founded on O 24 r 6(2) of the ROC (the “O 24 r 6(2) Issue”);

(b) whether SUM 3742 could be founded on the Court’s inherent powers (the “Inherent Powers Issue”);

(c) if SUM 3742 could be founded on either O 24 r 6(2) of the ROC or the Court’s inherent powers, whether the non-party’s duties of confidentiality militated against it being granted (the “Confidentiality Issue”); and

(d) if SUM 3742 could be founded on either O 24 r 6(2) of the ROC or the Court’s inherent powers, and the non-party’s duties of confidentiality did not militate against it being granted, whether there should be any safeguards imposed in the granting of SUM 3742 (the “Safeguards Issue”).

[16] The O 24 r 6(2) Issue was whether SUM 3742 could be founded on O 24 r 6(2) of the ROC. This provides as follows:

(a) First, the summons and a copy of the supporting affidavit must be served on: (i) the non-party personally; and (ii) every party to the proceedings (O 24 r 6(2) and (4) of the ROC).

(c) Third, the necessity requirement in O 24 r 7 of the ROC must be satisfied.

[19] The requirement of relevance is imposed by O 24 r 6(3)(b) of the ROC. This provides that an application for non-party discovery under O 24 r 6(2) of the ROC shall be supported by an affidavit which must, among other things:

[21] As noted at [6] above, the plaintiff’s case is that the various mobile telephone numbers were registered to the defendant or to a person or entity controlled by the defendant, and subsequently sold for a profit. It seemed to me that this claim implicated in one way or another each of the eight mobile telephone numbers set out in Schedule 1 at [10] above. Further, it was clear from the Defence that this claim is disputed by the defendant. Accordingly, it followed that the identities of the registered subscribers of these eight mobile telephone numbers were, to use the wording of O 24 r 6(3)(b) of the ROC, “relevant to an issue arising … out of the claim made”.

[22] The requirement of necessity is imported by O 24 r 7 of the ROC, which provides as follows:

[23] I was of the view that discovery was plainly necessary in this case. The identities of the registered subscribers of the eight mobile telephone numbers were central to the plaintiff’s case. Discovery would allow the plaintiff to make an informed decision as to whether it should proceed with its claim against the defendant, or if its recourse lay elsewhere.

[24] Further, the plaintiff was only seeking the identities of the registered subscribers of the eight mobile telephone numbers within limited time periods (see [10] above). At the Second Hearing, I asked counsel for the plaintiff, Ms Natasha Cheng, to take me through each of the dates referred to in Schedule 1 at [10] above, and Ms Cheng was able to point to either an invoice or form which reflected each date alongside the corresponding mobile telephone number. This suggested to me that the scope of discovery which was sought was not any wider than what was necessary. It should also be noted that counsel for the non-party, Mr Brinden Anandakumar, confirmed that he was content with the time periods provided by the plaintiff.

[25] What the non-party took issue with, however, was the fact that the plaintiff’s supporting affidavit in SUM 3742 attested to the defendant’s admission of personal liability for all the unpaid Credits purportedly sold to the Three Entities (see [13(b)] above). In this regard, the non-party pointed to a note which was exhibited in the plaintiff’s supporting affidavit in SUM 3742. This note was dated 1 March 2017 and appeared to be signed by the defendant and two witnesses. The note read:

[26] It appeared that this note had earlier featured in the defendant’s application in Summons No 925 of 2018, which was an application to set aside a default judgment that had been entered against him. The application was granted by an Assistant Registrar, who observed, in her oral grounds (which, in fairness to the non-party, the non-party was not privy to), that the defendant had asserted that the note was written under duress. In the final analysis, the defendant’s supposed admission was simply part of the plaintiff’s case. It was not an undisputed position, and therefore had no bearing on the necessity or otherwise of discovery in the present case.

[27] But the non-party had a second string to its bow, ie, the defendant’s admission, in his first affidavit filed in SUM 3742, that he had used some of the eight mobile telephone numbers to purchase Credits (see [13(b)] above). This was based on para 11 of the affidavit, which read as follows:

[28] To my mind, however, this submission was irrelevant to the issue of necessity. As Ms Cheng pointed out, the defendant was the plaintiff’s former employee, and would have placed orders on those numbers anyway. Accordingly, this second supposed admission by the defendant spoke nothing to the plaintiff’s case that the various mobile telephone numbers were registered to the defendant or to a person or entity controlled by the defendant, and subsequently sold for a profit (see [6] above).

[29] The requirement relating to the documents being in the non-party’s possession, custody or power is imposed by O 24 r 6(3)(b) of the ROC. This provides that an application for non-party discovery under O 24 r 6(2) of the ROC shall be supported by an affidavit which must, among other things:

[30] Implicit in this requirement is the logically-anterior assumption that the documents in question exist. In my view, this was where SUM 3742 ran into an insuperable difficulty. Before me, Mr Anandakumar explained that if SUM 3742 were granted, what the non-party would do would be to file an affidavit exhibiting a spreadsheet containing the relevant information. Crucially, Mr Anandakumar also confirmed that, at the time SUM 3742 was taken out, this spreadsheet did not exist. Indeed, it did not exist even at the time of the Third Hearing. Instead, it was something that the non-party would put together in the event SUM 3742 were granted. Accordingly, it could not be said to be in the non-party’s possession, custody or power.

[31] For this reason, I was of the view that, in respect of the O 24 r 6(2) Issue, SUM 3742 could not be founded on O 24 r 6(2) of the ROC.

[36] However, given my findings at [29]–[31] above, it was not necessary for me to come to a firm view on these difficulties.

[37] The Inherent Powers Issue was whether SUM 3742 could be founded on the Court’s inherent powers. It is apposite to begin the analysis by highlighting two points.

[40] Taken together, these two points necessitated the search for an alternative basis for SUM 3742. In the course of the Second Hearing, Mr Anandakumar suggested that the Court’s inherent jurisdiction could be the basis upon which SUM 3742 could be granted (although he appeared to recoil from this position at the Third Hearing). Further, although no written grounds were issued in either OS 347 or OS 858, the preambles of the orders extracted in both cases begin as follows:

[41] Before proceeding further, it is perhaps appropriate to clarify that there is a difference between the Court’s inherent jurisdiction, on the one hand, and the Court’s inherent powers, on the other. While the two terms are often used interchangeably, there remains a distinction between them which I think is helpful to bear in mind. This distinction was explained by the High Court in BBW v BBX and others [2016] 5 SLR 755 (at [19]) (“BBW”) as follows:

[42] Like in BBW, the relevant concept in the present case was that of the Court’s inherent powers, and it is to this that I now turn.

[43] As observed by the High Court in Wellmix Organics (International) Pte Ltd v Lau Yu Man [2006] 2 SLR(R) 117 (“Wellmix”) (at [80], and albeit in the context of an earlier edition of the ROC), the Court’s inherent powers find their recognition in, inter alia, O 92 r 4 of the ROC, which provides as follows:

[45] Having regard to these general principles, it followed from what I have said at [38] above that this was a proper case for the Court’s inherent powers to be exercised.

[49] For these reasons, I was satisfied that the Court’s inherent powers could and should be exercised in the present case. In respect of the Inherent Powers Issue, therefore, I was of the view that SUM 3742 could be founded on the Court’s inherent powers.

[50] As I was of the view that SUM 3742 could be founded on the Court’s inherent powers, it was necessary to consider the Confidentiality Issue, ie, whether the non-party’s duties of confidentiality militated against SUM 3742 being granted. The Confidentiality Issue arose because the non-party claimed that it owed statutory duties of confidentiality to its subscribers (see [14] above).

[51] Both parties referred to the High Court’s decision in Haywood Management Ltd v Eagle Aero Technology Pte Ltd [2014] 4 SLR 478 (“Haywood”). Haywood was a case relating to, among other things, pre-action disclosure, but there is no reason why the principles enunciated therein would not be applicable in the context of non-party discovery. Two points are key. First, when a defendant seeks to rely on a confidentiality clause to oppose an application for pre-action disclosure, the Court has to determine whether the information sought falls within the scope of the confidentiality clause (Haywood at [52]). Second, where a defendant manages to establish that the information sought to be disclosed falls within the scope of its confidentiality obligations, there remains the issue of whether the Court ought to favour confidentiality, at least in the context of pre-action discovery (or, in the present case, in the context of non-party discovery) (Haywood at [53]). In this regard, confidentiality obligations do not operate as a trump to foreclose disclosure. Rather, they are a factor to be taken into account in what is essentially a balancing exercise. As explained by the Court (at [55], [56] and [57]):

[52] In the present case, there was no need for me to consider whether the information sought fell within the scope of the non-party’s statutory duties of confidentiality (or even the anterior question of whether such statutory duties of confidentiality existed (Haywood at [61])). Even if I had taken the non-party’s case at its highest, and assumed all this in its favour, the non-party had not proffered any convincing reason as to why I ought to favour confidentiality.

[53] First, in suggesting that the Court should lean in favour of non-disclosure, the non-party repeated its submissions on the issue of relevance and necessity. These issues have already been addressed at [19]–[28] above. I noted that these submissions also included a point about how the plaintiff had not explained what it intended to do with the information it was seeking, but this, in my view, was more germane to the Safeguards Issue.

[54] Second, the non-party submitted that the Court should also take into account whether there existed an alternative and more appropriate method of obtaining the information the plaintiff was seeking from the non-party. In this regard, the non-party highlighted that the plaintiff could have, for example, served interrogatories on the defendant. However, it was not clear to me that interrogatories served on the defendant (as opposed to the non-party) would yield the same information. As I have already noted at [48] above, it was not immediately evident that, apart from the non-party, there were other means of obtaining the same evidence.

[55] In Haywood, the Court found (at [64]) that the appellant had failed to substantiate how the disclosure of the requested documents would be against the interest of justice. For the two reasons set out at [53]–[54] above, the same could be said in the present case. In the circumstances, there was no reason why confidentiality ought to be favoured. In respect of the Confidentiality Issue, therefore, I was of the view that even if: (a) the non-party’s statutory duties of confidentiality existed; and (b) the information sought fell within the scope of such duties, such duties did not militate against SUM 3742 being granted.

[56] As I had decided that SUM 3742 could be founded on the Court’s inherent powers, and that the non-party’s duties of confidentiality did not militate against it being granted, the final issue was the Safeguards Issue, ie, whether there should be any safeguards imposed in the granting of SUM 3742.

[57] The Safeguards Issue arose from the non-party’s position that, if the plaintiff intended to bring proceedings against other potential wrongdoers, the non-party would seek to highlight certain safeguards for the Court’s consideration (see [13(c)] above). The Safeguards Issue was raised for the first time at the Second Hearing via written and oral submissions. At that hearing, Ms Cheng was unable to provide any firm response as to what the plaintiff intended to do with the information obtained from the spreadsheet which was sought. But she really could not be faulted for this. First, as the Safeguards Issue was raised for the first time at the Second Hearing, there was really no reason to expect Ms Cheng to have taken instructions on this. Second, as I pointed out to parties at the Second Hearing, it seemed slightly premature for the plaintiff to have taken a position on this when the spreadsheet which was sought in SUM 3742 had not even been made available yet. Accordingly, I adjourned SUM 3742 and gave directions in relation to the Safeguards Issue.

[58] Pursuant to these directions, the plaintiff wrote in to Court on 13 November 2018 to set out its intended course of action should SUM 3742 be granted. The material paragraphs of its letter were as follows:

[59] Appendix A of this letter (which was referred to in para 3 of the same) was a draft letter to the registered subscribers (the “Draft Letter”). The Draft Letter set out some background before proceeding to pose the following five questions:

[61] I subsequently fixed the matter for hearing and also gave directions for the filing of further written submissions.

[62] As I understood it, the main crux of the plaintiff’s submissions on this issue was that the non-party’s concern had been catered for in the Draft Letter. Further, reference was also made to the plaintiff’s obligations (or, more accurately, the plaintiff’s solicitors’ obligations) under r 8(4) and (5) of the Legal Profession (Professional Conduct) Rules 2015 (S 706/2015). Accordingly, it was contended that no further safeguards were required.

[64] Having regard to the principles set out at [43]–[44] above, I was of the view that there existed, pursuant to the Court’s inherent powers, the power to impose the safeguards which were sought. However, whether this power should be exercised was a different matter and remained governed by the key criterion of “need”.

[65] At the Third Hearing, it became evident that the parties were broadly agreed on the Safeguards Issue. Mr Anandakumar clarified that the non-party was not objecting to the Draft Letter; it was simply asking that the Additional Statements be included. On her part, Ms Cheng indicated that the plaintiff was agreeable to including the Additional Statements in the Draft Letter (subject to the precise wording of the first Additional Statement being fine-tuned) and to providing the accompanying undertaking by way of affidavit.

[66] I was content to impose safeguards in the granting of SUM 3742. Aside from the fact of parties’ broad agreement, I was satisfied that such safeguards would also be necessary to guard against the potential for abuse highlighted by the non-party (see [63] above). In respect of the Safeguards Issue, therefore, I was of the view that there should be safeguards imposed in the granting of SUM 3742.

[73] Before ending off these grounds of decision, I add a final observation on O 24 r 6(5) of the ROC. For ease of reference, I reproduce this provision again:

[74] Up to the Second Hearing, the only significant reference to O 24 r 6(5) of the ROC by parties was as I have set out at [34]–[35] above. In its further written submissions, and at the Third Hearing, however, the non-party contended that the SUM 3742 was based on both O 24 r 6(2) and (5) of the ROC.

[76] Second, added to the above was Ms Cheng’s clarification, in no uncertain terms, that the plaintiff’s main focus was to corroborate its case against the defendant. This was consistent with the plaintiff’s further written submissions, which stated that the plaintiff’s intention was to discover the link or relationship between the defendant and the newly-identified parties, and not to bring a new action against the same. It must be recalled that SUM 3742 was the plaintiff’s application. And as the plaintiff was not relying on O 24 r 6(5) of the ROC in any meaningful way, I saw little reason to substantively engage the point.

[77] There was, however, one possible way in which O 24 r 6(5) of the ROC could have been relevant to SUM 3742, and this related to the Riddick principle. The Riddick principle derives from the decision of the English Court of Appeal in Riddick v Thames Board Mills Ltd [1977] 1 QB 881. As Lord Denning MR held (at 896), there is an implied undertaking that “[a] party who seeks discovery of documents gets it on condition that he will make use of them only for the purposes of that action, and no other purpose”. The scope of this undertaking would be clear if SUM 3742 were granted pursuant to either O 24 r 6(2) or (5) of the ROC. However, it would be less so if SUM 3742 were granted pursuant to the Court’s inherent powers.

[78] It was tempting, in these circumstances, to express some sort of a view on this issue. However, I eventually declined to do so. The issue of the scope of the undertaking pursuant to the Riddick principle which applied in this case was not properly before me in SUM 3742. Indeed, this issue would only become live should the plaintiff choose to proceed against any of the non-party’s registered subscribers identified as a result of SUM 3742 being granted. Even then, it would presumably be for these registered subscribers, and not the non-party, to take up any objection on the basis of the Riddick principle. Further, I did not think that the scope of the undertaking pursuant to the Riddick principle which applied in this case was entirely opaque just because I had granted SUM 3742 pursuant to the Court’s inherent powers. This was something that could be determined by reference to my orders (and, I should add, these grounds of decision). Finally, Ms Cheng had also accepted that if SUM 3742 were granted pursuant to the Court’s inherent powers, the Riddick principle would apply to prevent the plaintiff from commencing a fresh action, unless the plaintiff first applied for a release from this undertaking. This, in my view, would go some way in addressing the issue.