Invenpro (M) Sdn Bhd v JCS Automation Pte Ltd and another

Kevin Tan Eu Shan AR:

[1] This is an application by the Plaintiff, Invenpro (M) Sdn Bhd, for electronic discovery (“e-discovery”) under Part IVA of the Supreme Court Practice Directions (“the e-discovery PD”). The application was opposed by the Defendants, JCS Automation Pte Ltd and JCS-Echigo Pte Ltd.

[2] The Plaintiff, a Malaysian company, manufactures batch scrubber machines that clean hard disk platters (“Invenpro Batch Scrubbers”). The Defendants are Singapore companies that are in direct competition with the Plaintiff.

[3] On 1 January 2003, the Plaintiff entered into a Non-Disclosure Agreement (“the NDA”) with Komag USA (M) Sdn Bhd, which was subsequently acquired by Western Digital Corporation (“WDC”). Under the NDA, the Plaintiff agreed to supply the Invenpro Batch Scrubbers to WDC. The NDA provided for mutual obligations of confidentiality in exchange for the passing of technology and designs between the parties.

[4] The Plaintiff’s case is that on or about October 2008, the 1st and/or the 2nd Defendants obtained confidential information from WDC relating to the design and manufacture of the Invenpro Batch Scrubbers (“the confidential information”). It alleges that the Defendants used some or all of the confidential information in designing and manufacturing their own batch scrubbers, which were sold to WDC. The Plaintiff also alleges that the Defendants used the confidential information to make presentations to Seagate Technology International and/or its associated companies (collectively “Seagate”). Allegedly infringing batch scrubbers were sold by the Defendants to Seagate as well.

[5] The Defendants’ position is that they have neither received the confidential information from WDC nor utilised the said information for the purpose of manufacturing their own batch scrubbers.

[6] On 21 February 2012 and 22 March 2012, the Plaintiff obtained certain discovery orders from an Assistant Registrar and a Judge respectively. These orders were related to Development and Operating documents of the Defendants’ batch scrubber machines that were sold to and/or delivered to WDC and Seagate (“the Discovery Orders”). In the Discovery Orders, the definitions of the documents were as follows:

In compliance with the Discovery Orders, the Defendant filed their supplementary list of documents on 12 April 2012.

[7] The Plaintiff asserted that the documents disclosed by the Defendants in their supplementary list of documents appeared to be sales documents, which do not fall within the ambit of the Discovery Orders. In view of the Defendants’ purported non-compliance with the Discovery Orders, the Plaintiff took out the present application for e-discovery on 18 October 2012. This involves, inter alia, running a search of 75 keywords through the electronic databases of at least 14 of the Defendants’ employees.

[8] At the hearing before me, the Plaintiff’s counsel, Ms Low Wei Ling, confirmed that she had taken out this application in order to obtain what had already been ordered in the Discovery Orders. Thus, the issue is whether I should allow the Plaintiff’s application for e-discovery for the sole purpose of enforcing the Discovery Orders.

[9] The Plaintiff asserts that e-discovery can be used to enforce non-compliance with the Discovery Orders. It relies on O 24 r 16(1) of the Rules of Court (Cap 224, R 5, 2006 Rev Ed) (“Rules”), which provides as follows:

It submits that as the Defendants have not fully disclosed their Development and Operating documents, an e-discovery order to enable it to obtain the said documents would be “just” in the circumstances.

[10] The Defendants argue that while a literal reading of O 24 r 16 suggests that the court has broad powers to make orders regarding non-compliance of one’s discovery obligations, e-discovery should be used only when it is proportionate and economical to do so and not as a method of enforcing compliance with discovery orders.

[11] Admittedly, O 24 r 16 confers a wide discretion on the court to make any order that is “just” if a party defaults in its discovery obligations. However, there is no justification for the court to use e-discovery purely as an enforcement mechanism when there is an allegation that a discovery order has not been complied with.

[13] In addition, it must be borne in mind that proportionality is a key concern in e-discovery. Paragraph 43A (1) of the e-discovery PD states that e-discovery “provides a framework for proportionate and economical discovery, inspection and supply of electronic copies of electronically stored documents”. In Breezeway Overseas Ltd v UBS AG [2012] SGHC 41, SAR Yeong Zee Kin stated (at [16]):

[15] In my view, the Plaintiff’s basis for applying for e-discovery is misconceived. The Plaintiff appears to be using e-discovery as a “final sweep” of the evidence to ensure that all of the Defendants’ Development and Operating documents have been disclosed. If e-discovery can be used to enforce discovery orders, parties who suspect that their opponents have not fully complied with their discovery obligations would invariably want to rely on e-discovery in addition to traditional discovery to assure themselves that all documents have been disclosed. This is contrary to the spirit of e-discovery. It is worth noting that in Digicel (St Lucia) Limited and ors v Cable & Wireless plc and ors [2008] EWHC 2522 (Ch) (“Digicel”), Morgan J stressed (at [46]):

[16] It cannot be overemphasised that the framework of the discovery process is set out in the Rules. The e-discovery PD is meant only to supplement the discovery framework established by the Rules and not change the law on discovery by adding an enforcement mechanism with regard to discovery orders. In Breezeway Overseas Ltd and another v UBS AG and others [2012] SGHC 170, Lee Seiu Kin J clarified (at [22]):

[17] As for the Rules, the starting point is that an affidavit filed under O 24 r 5 is conclusive at the interlocutory stage. In Singapore Civil Procedure 2007 (G P Selvam, gen ed) (Sweet & Maxwell Asia 2007), the learned authors observe at para 24/5/1:

[18] In the present case, the Plaintiff did not apply for a further and better list or for a further affidavit for specific documents or classes of documents. In view of this, the affidavit dated 12 April 2012 that was filed on behalf of the Defendants to the effect that all relevant documents pursuant to the Discovery Orders had been disclosed is, without more, the end of the matter at this stage. Under these circumstances, the Plaintiff should wait until the trial to cross-examine the Defendants’ witnesses on whether there are relevant documents that have not been disclosed. In Berkeley, the court stated at 383:

[19] Furthermore, it is pertinent to note that the Rules provide recourse to a party who believes that its opponent has not complied with discovery obligations. For instance, the Plaintiff may apply for an unless order to require the Defendants to comply with the Discovery Orders, failing which their defence will be struck out: see Lee Chang-Rung and others v Standard Chartered Bank [2011] 1 SLR 337. In short, the Plaintiff should consider the established ways to enforce compliance with the Discovery Orders against the Defendants rather than make the present application for e-discovery.

[20] Finally, the Plaintiff’s reliance on Digicel to support its argument that a court can grant further discovery if inadequate discovery had previously been given is misplaced. In that case, in the initial round of discovery, the defendants unilaterally chose their own keywords and conducted a search of their electronic documents. The claimants were dissatisfied with the defendants’ search and sought an order that the latter carry out a further search with reference to the former’s set of keywords. The Court held that the defendants had failed to carry out a “reasonable search” under s 31.7 of the Civil Procedure Rules (SI 1198 No 3132) (UK) in their initial search and ordered them to conduct a further search with reference to an expanded list of keywords. As Digicel does not deal with the question of enforcement of a discovery order that has already been made, it does not assist the Plaintiff in the present application.