an analysis of recent judicial developments in selected areas of

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134 Singapore Academy of Law Journal (1996)

AN ANALYSIS OF RECENT JUDICIAL DEVELOPMENTS INSELECTED AREAS OF CIVIL PROCEDURE

The court’s involvement in the settlement process — New pleadingrule in defamation proceedings alters position taken in recent case— Affidavit of the evidence in chief and oral evidence at trial —Determining whether a party has been surprised by the failure ofhis opponent to plead a material fact — Service on an agent ormanager: the elements of Order 10, r 2 of the Rules of Court

(1996) (RC) — Recovering the costs of bringing legal proceedingsfrom the responsible party — The appropriate standard for settingaside a judgment in default — Failure to comply with the rules ofdiscovery — Discovery beyond a preliminary issue — The right to

conceal parts of a document on discovery — Representativeproceedings pursuant to statute — Amendment pursuant to Order

20, rule 5(4) (RC) — Affidavits in interlocutory applications: sourceof information and belief— The scope of Order 29, rule 2(1) (RC)

— Injunctions: application of American Cyanamid principles —Execution of the Anton Piller Order

THE COURT’S INVOLVEMENT IN THE SETTLEMENT PROCESS

The English Court of Appeal decision in In re R. (A Minor)1 raises importantissues concerning the court’s role in promoting settlement. The father hadsought a contact order in respect of his five-year-old daughter who wasliving with her mother. The mother opposed contact on the basis that itwas not in the girl’s best interests at that stage. When counsel for thefather had opened his case the assistant recorder said that the motherappeared to have no objection in principle to contact and suggested a trialperiod of supervised contact. The mother’s solicitor told the assistantrecorder that she wished the case to be heard, following which the fathergave evidence in chief and was cross-examined. The assistant recorderthen commented that it was not acceptable for the mother to raise objectionsin principle and that if she continued to oppose the application she wouldseriously risk an inter partes costs order being made against her.Subsequently an interim contact order was made by consent. The motherargued before the Court of Appeal that the assistant recorder’s improperconduct of the trial had resulted in a settlement to which no true consenthad been given, and that the order should be set aside. The Court ofAppeal set aside the contact order and directed a re-hearing. Stuart-SmithLJ expressed the following principle in relation to the facts of the case:

A court, of course, always retains a discretion as to costs andundoubtedly can depart from the usual practice for good reason, but

1 [1995] 1 WLR 184.

23

Ibid, at pp 190–191.Ibid, at p 187.

8 S.Ac.L.J. Recent Judicial Developments in Civil Procedure 135

the problems created here by the judge’s remarks are two-fold. First,in order to make such an order, he would have to conclude eitherthat the mother was not acting bona fide or, at the very least, heropposition was unreasonable. There was no warrant for that view.Secondly, the mere warning or threat that there was a serious riskthat she would be made to pay the costs might well lead the motherto conclude that the judge had already made up his mind that shewas being unreasonable. I do not suppose the judge intended hisremarks to be taken in that way, but I think that they could well havebeen misunderstood, and that is what the mother thought in thiscase. Indeed, she felt there was no point in going on. She was notgoing to win and she might well be penalised in costs if she lost. Ajudge may often have a laudable desire that the parties should resolvedisputes, particularly family disputes, by agreement. I would not wishto say anything to discourage a court from doing so, but great caremust be taken not to exert improper or undue pressure on a party tosettle when he or she is unwilling to do so. In particular, the judgemust take great care not to give the impression that he has decidedthe issue without hearing the evidence and argument upon it finallyand for all time. In my judgment, in his commendable wish to try toavoid conflict between the parties here, the judge was in error in thetwo respects which I have indicated.2

The case reveals another concern which is of particular relevance to adispute resolution process which culminates in a consent order. In theabsence of an official record of the conduct of the proceedings in the courtbelow, the Court of Appeal found it difficult to ascertain exactly what hadtranspired. It referred to three varying accounts of the events given by theassistant recorder and the solicitors for the parties. The Court of Appealseemed to rely predominantly on the affidavit of one of the solicitorsbecause of his considerable experience.3

There has yet to be a reported case involving a complaint concerningimproper pressure by the court in the course of a settlement conference ordispute resolution process. Nevertheless, in the event that such a situationdoes arise, the availability of a verbatim record of the proceedings wouldgreatly assist the reviewing court in determining whether the proceedingswere properly conducted. A verbatim record would also ensure that judicialofficers involved in dispute resolution are particularly conscious of theirmanner of approach towards the parties.

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[1995] 3 SLR 477.Ibid, at p 488.Ibid, at p 490.Ibid. For cases in which the circumstances justified specific pleas, see Prince Ruspoli vAssociated Newspapers plc (11 December, 1992 (unreported) and Perestrello E CompanhiaLimitada v United Paint Co Ltd [1969] 1 WLR 570 (both cited and distinguished in LeeKuan Yew v Vinocur [1995] 3 SLR 477).As in the case of other specific rules requiring particulars, the provision operates withoutprejudice to the generality of Ord 18, r 12 (RC).This form of malice should be distinguished from malice which is alleged in rebuttal tothe defence of fair comment on a matter of public interest or publication upon a privilegedoccasion. Malice in rebuttal (often referred to as malice in fact or express malice) canonly logically be pleaded in the plaintiff’s reply to the defence. See Lee Kuan Yew vVinocur [1995] 3 SLR 477, at pp 490–491.


NEW PLEADING RULE IN DEFAMATION PROCEEDINGSALTERS POSITION TAKEN IN RECENT CASE

In Lee Kuan Yew v Vinocur,4 the court, having surveyed the authorities onthe subject, concluded that it was not necessary for the plaintiff to specificallyplead the malicious attitude of the defendants and injury to the plaintiffs’feelings for the purpose of claiming aggravated damages. The court justifiedthis outcome as the plaintiffs’ pleas — that they had ‘been gravely injuredin [their/his] character, credit and reputation’ and had been brought ‘intopublic scandal, odium and contempt’ — encompassed injury to feelings.5

The court accepted that damages for defamation would include aggravateddamages which are the necessary and immediate consequence of the injuryto their ‘character, credit and reputation,’ and their being brought into‘public scandal, odium and contempt’.6 Furthermore, the court found thatas the defendants had been aware of the plaintiffs’ intention to claimaggravated damages by reason of previous applications for summaryjudgment, they could not have been surprised or embarrassed by theomission to plead the specific facts which gave rise to these damages.7

The new rule 3(3A) of Order 78, which was introduced by the Rules ofCourt, 1996, requires the plaintiff to give full particulars in the statementof claim of the facts and matters on which he relies in support of his claimfor damages, including details of any conduct by the defendant which it isalleged has increased the loss suffered, and of any loss which is peculiar tothe plaintiff’s own circumstances.8 This provision extends to all damagesclaimed including aggravated damages, and therefore modifies the decisionof the High Court in Lee Kuan Yew v Vinocur. The position under the newrule 3(3A) is that all circumstances giving rise to aggravated damages mustbe pleaded. Moreover, as this provision requires ‘...details of any conductby the defendant which it is alleged has increased the loss suffered...’,malice, where it is the basis for a claim for aggravated damages, must bespecifically pleaded. This would accord with Order 18, rule 12(1), whichrequires an allegation of malice, where it is a ground for a claim, to bepleaded in the statement of claim.9

10111213141516

Ord 38, r 2(3) of the Rules of Court (1996) (RC).Ibid.Whether a party or not.Ord 38, r 2(4) (RC).[1995] 3 SLR 477.See Ord. 38, r. 2(3).Pursuant to Ord. 38, r. 2(4) and Ord. 92, r. 4 (RC).


AFFIDAVIT OF THE EVIDENCE IN CHIEF AND ORALEVIDENCE AT THE TRIAL

The general rule is that the witness may not give evidence at the trial orhearing ‘the substance of which is not contained in his affidavit’.10 Obviously,this provision does not extend to evidence concerning ‘matters which havearisen after the filing of the affidavit’.11 The court does have a generaldiscretion in the interest of justice to allow the witness12 to give part or allof his evidence orally at the trial or hearing.13 In Lee Kuan Yew & Ors. vJohn Vinocur & Ors,14 which concerned a defamation action, the HighCourt ruled that as the plaintiffs merely wanted to amplify the evidence intheir affidavits on the issue of malice and hurt to their feelings, such oralevidence would not contravene the general rule restricting the evidence attrial to the scope of the affidavit.15 Accordingly, the plaintiffs were allowedto testify.16 The court concluded that this decision would not conflict withthe policy considerations behind the pre-trial disclosure of affidavit evidence;namely, the expeditious disposal of proceedings, the saving of costs andthe elimination of surprise.

As yet it is unclear whether this decision will be limited to defamation suitsinvolving similar issues. There may well be other circumstances in whichamplification by a claimant (or even a non-claimant witness) of his affidavitevidence is justified on the same basis. For example, a claim for emotionalharm may require oral evidence to express the intensity of the claimant’sreaction to the defendant’s wrongful act. However, there must be somelimitation here if such licence is not to proliferate into a general practicewhich would offend the policy consideration of expeditiousness in thedisposal of proceedings. If the right to amplify the evidence in the affidavitis generally permitted the time-saving advantage of this recently introducedprocedure would be lost.

DETERMINING WHETHER A PARTY HAS BEEN SURPRISED BYTHE FAILURE OF HIS OPPONENT TO PLEAD A MATERIALFACT

No doubt, it is imperative that the court reaches its conclusion on the bestevidence available. However, the courts must also observe the equallyimportant procedural principle that the parties should be cognisant of allmaterial matters to be raised at trial so that they are not misled, prejudiced,embarrassed or otherwise taken by surprise. In short, the parties’ right to

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[1994] 3 MLJ 185.Specifically, rr 7 and 8(1)(b) of Ord 18 (RC).[1994] 3 MLJ 185, at p 189.Ibid, ‘...to prevent the opposing party from being taken by surprise by evidence whichdeparts from pleaded material facts, for such evidence,if allowed, will prejudice andembarrass or mislead the opposing party’.[1994] 3 MLJ 185, at p 191 (and top paragraph of p 190). The Supreme Court distinguishedWaghorn v George Wimpey & Co [1969] 1 WLR 1764, which stands for the propositionthat a radical departure from the pleadings can not be cured by the failure of the opposingparty to object. Also see John G Stein & Co Ltd v O’Hanlon [1965] AC 890.[1994] 3 MLJ 185, at p 191


effectively present their cases must be carefully guarded. If this essentialrequirement of the adversarial process is ignored pleadings would becomelargely redundant. This is not to say that every departure from a pleadingwould be contrary to this principle. A material fact in the pleading is oftenexpanded at trial by evidence as to detail. This is entirely legitimate as longas the scope of the material fact is not essentially extended. The courtshave also allowed evidence of unpleaded facts to be adduced if the opposingparty is not taken by surprise. In Superintendent of Lands and Surveys (4thDiv) v Hamit bin Matusin,17 the plaintiffs sought to restrain the defendantsfrom building on certain lands over which the plaintiffs claimed to haveacquired native customary rights. At the trial, the defendants contendedthat such rights could not have been acquired as the lands were subject tothe Sarawak Land Code and, furthermore, they had belonged to SarawakShell Oil Ltd. The trial judge held that as the defendants had failed tocomply with the pleading rules, the evidence concerning these two defenceshad to be disregarded.18 The Supreme Court agreed with the trial judgethat the defendant’s allegations ought to have been pleaded,19 andre-iterated the principle that the pleading rules are designed to avoid surprisewhich could compromise a party’s case.20 However, the Supreme Courtfound that the plaintiffs were not surprised in the circumstances as theevidence concerning the two defences was ‘not such a radical departurebut a mere development of what had been alleged by the defendants’.21

Furthermore, this ‘non-radical departure’ [from the pleadings] ‘was waivedor inferentially consented to when the evidence was adduced withoutobjection by the plaintiffs’.22

It is not entirely clear from the report of the judgment to what extent thesevery specific defences were ‘a mere development’ of the defendant’s case.The trial judge, who heard all the evidence, and was therefore in the mostfavourable position to decide on the effect of these omissions in the defencepleading, certainly thought that they did not constitute ‘a meredevelopment’. Furthermore, while the failure to immediately object toevidence as it is adduced may be indicative of the opposing party’s awarenessof it, and therefore his lack of surprise, this can not be an invariableconclusion. The case may be complex, and counsel may need time to ensure


that the new allegations are not adequately covered in the existingparagraphs of the pleadings before raising an objection. Another concernof the Supreme Court was that if the objection is accepted at the time ofthe final submissions, the party who omitted to plead might be prejudicedby being denied leave to amend at such a late stage.23 Surely, in thesecircumstances, the potential prejudice to both parties would have to betaken into account in determining whether an amendment should beallowed.

SERVICE ON AN AGENT OR MANAGER: THE ELEMENTS OFORDER 10, RULE 2 (RC)

Rosenberg v Bank Central Asia24 concerned a claim arising from the allegeddishonour of cheques drawn by a company incorporated in Indonesia. TheIndonesian company, which was involved in the business of banking, hada representative office in Singapore managed by one Heng. The ex parteapplication to serve process on Heng pursuant to the rule was initiallygranted by the registrar, but set aside at a subsequent hearing before theregistrar. On appeal by the plaintiff against the order to set aside theprocess, it was argued by the Indonesian company, inter alia, that theservice was improper because the representative office merely carried outliason work between itself and its clients in Singapore. Furthermore, it wasalleged that neither Heng nor the Singapore office controlled or managedthe the company’s banking business. The High Court rejected thesecontentions, preferring a more flexible approach to the rule. It decidedthat the words ‘such business or work’ (in rule 2(1)(b)) did not necessarilymean the ‘main business’ of the defendants. It was sufficient that therepresentative office was carrying out liason work which related to thedefendants’ banking business.25 The court also thought that it would bestraining the language of the rule to say that the plaintiff must show thatthe representative office conducts ‘banking business’ for the defendants.26

The Court of Appeal27 did not accept these conclusions. Referring toparagraphs (a) and (b) of Order 10, rule 2(1), the court ruled that theymust be read together:

Rule 2(1)(b) says that the agent or manager must, at the time ofservice, have the control or management of ‘such business or work’.The use of the word ‘such’ necessarily means that the ‘business orwork’ in question must be the same ‘business or work’ referred to inrule 2(1)(a).28

232425262728

Ibid, at p 190.[1994] 1 SLR 798 (HC); [1995] 1 SLR 490 (CA).Ibid, at pp 808.Ibid, at pp 807.Bank Central Asia v Rosenberg [1995] 1 SLR 490.Ibid, at p 497.

29

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Ibid, at p 496. The court referred to William Heinemann Ltd & Donald Moore Ltd v GNChristie [1960] MLJ 99; Getz Bros v Pan Malaysian Wood Products Sdn Bhd [1980] 2MLJ 79; Saccharin Corp v Chemische Fabrik HA [1911] 2 KB 516; Okura & Co vForsbacka Jernverks A [1914] 1 KB 715.Indian Civil Procedure Code, s 76.Goculdas v Ganeshalal ILR 4 Bom 416, at p 421.‘...its role was confined to providing information to clients here of the appellants andrelaying orders and inquiries between the clients and the head office in Jakarta.’: Ibid,at p 497.[1995] 1 SLR 490, at p 497. Also see Getz Bros v Pan Malaysian Wood Products Sdn Bhd[1980] 2 MLJ 79; William Heinemann Ltd & Donald Moore Ltd v GN Christie [1960]MLJ 99; Dunlop Pneumatice Tyre Co v Actien-Gesellschaft FMUM [1902] 1 KB 342;South India Shipping Corp v Export-Import Bank of Korea [1985] 2 All ER 219; The‘Hercules’ [1912] 1 KB 222; Saccharin Corp v Chemische Fabrik VHA [1911] 2 KB 516.


The court added:

...it is clear that the element of ‘control or management’ necessarilysuggests that the local agent or manager must have the power tocontract on behalf of the foreign principal. If the local agent ormanager does not have such a power, we do not see how he could besaid to be in control of the management of the business of the foreigncompany; in that case the foreign company would be trading ‘through’the local agent rather than ‘by’ the local agent.29

The court also referred to the following pronouncement of the Indiancourts in relation to a corresponding provision in the Indian Civil ProcedureCode:30

[T]here must be a person residing without the local jurisdiction, butcarrying on business or work within those limits by a manager oragent, and sued on account of such business or work — that is, as Iunderstand, business or work actually itself carried on by the agentor manager, or forming part of the business in the sense of a connectedcourse of transactions, to the management of which he has been dulyappointed.31

The ‘business or work’ referred to in rule 2(1)(a) was in this case thebanking business of the Indonesian Company. The requirement that theproceedings must relate to such business or work was not satisfied becausethe cheques arose from the Indonesian company’s business affairs. Theywere not issued in relation to the representative office’s business or work.Indeed, the representative office was not entitled to carry on a bankingbusiness.32 With regard to Heng, the court pointed out that as the ruleapplies to agents or managers, it did not matter that Heng, as a manager,was also an employee of the representative office.33

3435

363738394041

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Hammond & Co v Bussey (1887) 20 QBD 79.Butterworth v Kingsway Motors [1954] 1 WLR 1286; Bowmaker (Commercial) Ltd v Day[1965] 1 WLR 1396.Ord 59 r 2(2) (RC).Ganesan Carlose & Partners v Lee Siew Chun [1995] 2 SLR 29, at p 34 (para I).Ganesan Carlose & Partners v Lee Siew Chun [1995] 2 SLR 29.[1995] 2 SLR 29.The father had died by the time the documents were presented for signature.The firm’s involvement was explained by the Court of Appeal: ‘The signatures of therespondent (the plaintiff) and her husband were witnessed and attested to by a legalassistant in the employment of GCP. Apparently what happened was that the legalassistant allowed the respondent’s (plaintiff’s) son to take the document away for signatureby his parents (ie, the plaintiff and her husband) who then returned it with the assurancethat the signatures thereon had been duly obtained.’: [1995] 2 SLR 29, at p 31.See [1994] 3 SLR 421.[1995] 2 SLR 29, at p 31.


RECOVERING THE COSTS OF BRINGING LEGALPROCEEDINGS FROM THE RESPONSIBLE PARTY

It is well-established that the costs of bringing legal proceedings may beclaimed as damages in a separate suit against the person whose wrongfulconduct gave rise to these circumstances.34 It is also clear that when theperson at fault is involved as a party in the original suit, the court mayorder him to pay damages representing the costs of bringing legalproceedings.35 Furthermore, the court may, pursuant to it general discretionto award costs,36 order the person at fault to pay the party who brought thesuit the costs of so doing.37 However, if the court does not make an orderfor damages and costs to cover these circumstances, the party who broughtthe suit is not entitled to claim his suing costs as damages in the course ofthe assessment of damages.38

These principles were confirmed by the Court of Appeal in Ganesan Carlose& Partners v Lee Siew Chun.39 The third defendant (a law firm) hadobjected, in the course of an assessment of damages, to the plaintiff’s claimfor legal costs and expenses incurred by the plaintiff in suing the seconddefendants (a bank). The plaintiff had originally brought proceedings toset aside a mortgage executed by her and her husband in favour the bank,claiming that her son had forged his father’s signature.40 The mortgage wasgiven to secure a guarantee to the bank in consideration of credit facilitiesto be offered by the bank to another company. The law firm was includedin the action as a defendant.41 The plaintiff’s action against the bank wasdismissed. At the assessment, the assistant registrar decided that the plaintiffwas entitled to these costs as damages, and overruled the law firm’sobjection. The High Court agreed.42 The Court of Appeal did not. ChaoHick Tin J, who delivered the judgment of the Court of Appeal, pointedout that one of the orders of the trial court was that the law firm shouldpay the plaintiff:

‘costs including all costs paid by the plaintiff to the [the bank] ...’43

4445

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[1995] 2 SLR 29, at p 34.Butterworth v Kingsway Motors [1954] 1 WLR 1286; Bowmaker (Commercial) Ltd v Day[1965] 1 WLR 1396.[1995] 2 SLR 29, at p 33.Ibid, at p 34.Ibid.Ibid, at pp 34–35.Ibid, at p 35.Ibid.[1986] 2 LL R 221.[1937] AC 473.


This was an order that the law firm pay the Bank its costs of the suit. Thereis no reference here to recovery of the plaintiffs suing costs. The trialjudge had made a ‘Bullock’ order. ‘He did not order that [the law firm]was to pay the respondent’s own costs in suing [the bank]’.44 The HighCourt had relied on two cases in which the English courts had granteddamages to a party for the costs incurred by another party in bringing legalproceedings.45 Chao Hick Tin J distinguished these cases as the trial courtswhich had decided them expressly held that the plaintiffs were entitled tothe suing costs as damages:

Effectively what the courts there had decided was the same as if[they] had ordered that the plaintiff’s costs of suing would have to beborne by the unsuccessful defendant. The important thing in the twocases is that the rights of all the parties, including costs, had beendecided upon by the courts.46

This was not the position in the case before the Court of Appeal:

A determination having been made by the trial judge in the mainaction on the question of costs of the parties, we do not think it isopen to the respondent to re-open the question and claim as damagesthat part of costs which has not been expressly allowed by the court.47

The Court of Appeal added that the trial court was not limited to awardingdamages against a party for another party’s suing costs. It might ‘order thatthe unsuccessful defendant pay the plaintiff’s own costs in unsuccessfullysuing the other defendant either on the indemnity basis or on the standardbasis’.48 In the further alternative, the court could refuse costs altogether.49

‘These are all matters of discretion for the trial court and should be decidedby that forum and not any other forum’.50 If this principle is not followeda party who is not granted his suing costs would be able to obtain a secondbite at the assessment under the guise of damages.51

THE APPROPRIATE STANDARD FOR SETTING ASIDE AJUDGMENT IN DEFAULT

In Alpine Bulk Transport Co. Inc. v Saudi Eagle Shipping Co Inc52 theEnglish Court of Appeal interpreted the judgments in Evans v Bartlam53

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[1986] 2 LL R 221, at p 223.Ibid.Abdul Gaffer v Chua Kwang Yong [1995] 1 SLR 484, at p 489. Also see Hong LeongFinance Ltd v Tay Keow Neo [1992] 1 SLR 205 in which the High Court applied theseprinciples.For some cases in which Evans v Bartlam was considered without reference to AlpineBulk Transport Co. Inc. v Saudi Eagle Shipping Co Inc, see Malaysia Building SocietyBhd v Lint Kheng & Ors [1988] 3 MLJ 175, at p 179–180; Malaysian French Bank Bhdv Abdullah bin Mohd Yusof & Ors [1991] 2 MLJ 475; Fira Development Sdn Bhd vGoldwin Sdn Bhd [1989] 1 MLJ 140; PL Construction Sdn Bhd v Abdullah bin Said[1989] 1 MLJ 160.[1994] 1 MLJ 312.Ibid, at p 320: ‘...it behoves us to point out from the outset that Sir Roger Ormrod himselfdid not appear to be firm as to which standard should be applied...’. The Supreme Courtin Hasil bumi Perumahan did not think that the phrases ‘real prospect of success’,‘reasonable prospect of success’, and ‘arguable defence which must carry some degree ofconviction’ were consistent.[1937] AC 473.


as requiring the defendant to show that ‘he has a defence which has a realprospect of success’.54 Sir Roger Ormrod, who delivered the judgment ofthe Court of Appeal, stated:

...it would be surprising if the standard required for obtaining leaveto defend (which has only to displace the plaintiff’s assertion thatthere is no defence) were the same as that required to displace aregular judgment of the court and with it the rights acquired by theplaintiff. In our opinion, therfore, to arrive at a reasoned assessmentof the justice of the case the court must form a provisional view ofthe probable outcome if the judgment were to be set aside and thedefence developed. The ‘arguable’ defence must carry some degreeof conviction.55

These principles were adopted by the Singapore Court of Appeal lastyear.56 The Malaysian courts have been more diffident about Saudi EagleShipping. In some cases no reference at all has been made to this decision.57

More recently, in Hasil bumi Perumahan Sdn Bhd v UMBC Bhd,58 theSupreme Court was of the view that the approach of the English Court ofAppeal was not entirely clear,59 and that it had departed from the moreappropriate lower standard set by the House of Lords in Evans v Bartlam.60

Jemuri Serjan CJ of Borneo, who delivered the judgment of the court,equated the test with the criteria applicable to determine whether anapplication for summary judgment should succeed:

...the guidelines in Evans v Bartlam should be accepted. In our view,in order to succeed in his application...the applicant must show thathe has a defence which has some merits and which the court shouldtry. To use common and plain language, the applicant must show that

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[1994] 1 MLJ 312, at p 321. The Supreme Court pointed to authorities which supportedthis standard: Fin Development Sdn Bhd v Goldwin Sdn Bhd [1989] 1 MLJ 140; PLConstruction Sdn Bhd v Abdullah bin Said [1989] 1 MLJ 160; and East Asiatic Co (M)Bhd v Kamanis Sdn Bhd [1985] 2 MLJ 227.[1937] AC 473.[1986] 2 Lloyd’s Rep 221, at p 223.My account is based on the transcript of the hearing before the Court of Appeal on4 February, 1992. The formal citation is [1992] PIQR 255.[1986] 2 Lloyd’s Rep 221, at p 223. Also note the comment of the Editors of the SCP(UK), 1995, vol 1, at para 13/9/14: ‘The preferred view is that unless potentially credibleaffidavit evidence demonstrates a real likelihood that a defendant will succeed on fact no‘real prospect of success’ is shown and relief should be refused.’


his defence is not a sham defence but one that is prima facie, raisingserious issues as a bona fide reasonable defence.61

This was not the interpretation of Evans v Bartlam favoured by the EnglishCourt of Appeal in Saudi Eagle Shipping, which did not think that thestandard required for obtaining leave to defend in summary judgmentproceedings should be the same as that applicable to the displacement ofa regular judgment of the court:

This phrase [‘an arguable case’] is commonly used in relation to RSC,Order 14, to indicate the standard to be met by a defendant who isseeking leave to defend. If it is used in the same sense in relation tosetting aside a default judgment, it does not accord, in our judgment,with the standard indicated by each of their Lordships in Evans vBartlam.62 All of them clearly contemplated that a defendant who isasking the court to exercise it discretion in his favour should showthat he has a defence which has a real prospect of success.63

The Malaysian Supreme Court in Hasil bumi Perumahan merely took issuewith the interpretation of Evans v Bartlam; it did not assess the viabilityof the Saudi Eagle principles. Perhaps an analysis would be appropriate.The approach in Saudi Eagle Shipping is not free from difficulty. In thefirst place, the higher standard requires the court to enter into an evaluationof the evidence to determine the likely outcome of the case. This task maybe compromised by the inconclusiveness of the affidavits, and allegationsin the pleadings which have yet to be substantiated by evidence tested onoath. In Allen v Taylor,64 Dillon LJ, who delivered the judgment of theCourt of Appeal, thought it ‘...impossible to be dogmatic about the extentto which the court must be satisfied of the validity of the suggested efence’,and that ‘there must be numerous cases where the issue will turn entirelyon the assessment of the facts at trial’. His Lordship said with regard to thesuit before him that both parties’ cases carried conviction and that thecourt could not, without conducting a trial, say which would succeed. Thisconclusion would seem to conflict with the unqualified direction of theCourt of Appeal in Saudi Eagle Shipping that ‘..the court must form aprovisional view of the probable outcome if the judgment were to be setaside and the defence developed’.65


Secondly, it may be unjust to deprive a defendant who can raise a genuinelytriable issue (as opposed to a sham defence) of his opportunity to challengethe plaintiff’s case at trial. In Saudi Eagle Shipping, the Court of Appealsought to justify the distinction between the standard required to displacea regular judgment in default, and that applicable to resist an applicationfor summary judgment, on the basis that in the former situation an actualjudgment of the court has been obtained, and with it, the rights of propertyacquired by the plaintiff.66 This distinction may be far less significant whenone considers that in both situations the defendant is seeking to avoidearly judgment without trial (whether summary or by default). Accordingly,if the defendant is able to raise a triable issue which might prevent judgmentat trial the default judgment should not be allowed to stand.67 As to theCourt of Appeal’s reference to the plaintiff’s rights of property, these wereacquired by default and, therefore, should not be conclusive until there hasbeen a proper determination of the merits at trial.68 This outcome wouldfulfill the principle that the court has ‘the power to revoke the expressionof its coercive power where that has only been obtained by a failure tofollow any of the rules of procedure’.69 No doubt, where the defendant isresponsible for the default judgment, and seeks to inconvenience the courtby applying to set it aside, the court’s displeasure may be expressed bypenalising him in costs and by imposing appropriate conditions as part ofits order.70

FAILURE TO COMPLY WITH THE RULES OF DISCOVERY

The failure to comply with an an order of court requiring discoveryconstitutes the most serious breach of the discovery rules, and may lead tocommittal.71 If there has been non-compliance with an ‘unless order,’ orthe default is willful or tantamount to willfulness,72 it is almost certain thatthe defaulting plaintiff’s action or defaulting defendant’s defence would bestruck out.73

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[1986] 2 LL R 221, at p 223.In the same way, summary judgment would not be granted in these circumstances.Of course, if the defendant’s case has no merit it would be pointless to take the matterfurther and the judgment in default should be confirmed.Evans v Bartlam [1937] AC 473, at p 480.Also see Allen v Taylor [1992] PIQR 255, in which the Court of Appeal made it acondition of the setting aside that the defendant pay 2000 pounds into court.Ord 24, r 16(2)-(4) (RC). A solicitor may be liable for committal if he unreasonably failsto give notice of a discovery order (which has been served on him) to his client: Ord 24,r 16(4) (RC).As when the defaulting party has been grossly negligent (see Manilal & Sons (Pte) Ltdv Bhupendra KJ Shan (t/a JB International) [1990] 2 MLJ 282).See Manilal & Sons (Pte) Ltd v Bhupendra KJ Shan (t/a JB International) [1990] 2 MLJ282; SMS Pte Ltd v Power & Energy Ptd Ltd (31st January, 1996 in DCA 19/95, reportedin Academy Digest issue 4/96); Danvittier v Myers (1833) WN 58. Note that where aparty has failed to comply with an order of court for specific discovery, and there is aquestion as to the construction of the order, the court will give the party the benefit ofthe doubt: Triolacan Ltd v Medway Power Drives Ltd, Times, October 21, 1991.


The authorities have not been entirely consistent about the proper approachto non-compliance with a rule requiring discovery. In the very recent, asyet unreported, Singapore case of SMS Pte Ltd v Power & Energy PtdLtd,74 the district judge struck out the defence as the appellants had failedto file their list of documents pursuant to a summons for directions. Onappeal, the High Court declared that the power to strike out for failure tocomply with a discovery rule should only be exercised if there is a seriousrisk that a fair trial would not be possible by reason of the non-compliance.As there was no such risk in this case (the appellants would have filed anil return), the defence ought not to have been struck out.75 The report ofthe case is too brief to determine whether this principle extends to non-compliance with orders of court. However, the learned judge did say thatthe breach of an ‘unless’ order would automatically result in the strikingout of the defaulting party’s case.76

In England, the position is not entirely clear. In Logicrose Ltd v SouthendUnited Football Club Ltd,77 Millet J only concerned himself with whetherthe default would prevent a fair trial. The learned judge did not think thatthe power to dismiss should be exercised to deprive the plaintiff of thisright to fair adjudication, even if his conduct has been contemptuous anddeplorable.78 The only exception to this rule, his Lordship said, was whenthe party’s conduct prevents a fair trial by making a subsequent judgmentin his favour unsafe. In these circumstances the court would dismiss theaction — not to penalise the defaulting party — but to prevent injustice.His Lordship added that the court might threaten the defaulting party withdismissal of the action to encourage him to remedy his default. The courttook this action in the case itself by prompting the offender to producevital documents the existence of which he had hitherto concealed.Accordingly, the action was not struck out.

The Logicrose approach assumes that the only consideration in dismissingan action is fair adjudication, and that the impugnment of the authority ofthe court should not affect the party’s right to proceed. This does notaccord with the more stringent rules governing an application to dismiss anaction for want of prosecution. The first limb of the principle, as establishedin Birkett v James,79 is satisfied by showing conduct which is intentional

7475

767778

79

31st January, 1996 in DCA 19/95. Reported in Academy Digest issue 4/96.The High Court also admonished that an application to strike out should be made in theordinary way (by summons and affidavit) and not orally as was the case before thedistrict judge. An oral application could only be justified by ‘good reasons’.This is the established position.Times, 5th March, 1988.His Lordship said that the power would be exercised when the party’s conduct preventsa fair trial by making a subsequent judgment in his favour unsafe. Also see Husband’sof Marchwood Ltd v Drummond Walker Developments Ltd [1975] 1 WLR 603.[1978] AC 297. Birkett has been applied in Singapore. See Sim Lim Finance Ltd v HighlightIndustry Pte Ltd [1987] 1 MLJ 182; Wee Siew Noi v Lee Mun Tuck [1993] 2 SLR 232.

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8283848586

Times, August 7, 1991.Also see Caribbean General Insurance Ltd v Frizzell Insurance Brokers Ltd (1993) TimesLaw Reports, p 544 (Times, November 4,1993); Lonrho plc v Fayed (No 3), Times, June24, 1993.See Ord 24, r 2(5)(a) (RC).Ord 24, r 2(2) (RC).[1995] 1 WLR 158.Ibid, at p 163.Ibid.


and contumelious irrespective of whether fair adjudication at trial has beencompromised. Prejudice is only an element of the second ground, whichinvolves the different situation of inordinate and inexcusable delay. It issignificant that the learned judge did not consider the effect which the‘contemptuous and deplorable’ manner of non-compliance (for example,the wilful refusal to abide by an order requiring discovery) would have onthe authority of a court which is unwilling to impose the necessary sanctions.

In the light of the subsequent remarks of the English Court of Appeal inLandauer Ltd v Comins & Co,80 there may be circumstances in whichcontumacious conduct (such as the deliberate suppression of a document),might justify striking out the action ‘on the analogy of striking out for wantof prosecution’, even if a fair trial would still be possible.81

DISCOVERY BEYOND A PRELIMINARY ISSUE

Discovery would normally be limited to the particular issues in thepreliminary or split trial.82 Therefore, in the case of a trial restricted to thedetermination of liability, the court would normally exclude discoveryconcerning damages. Nevertheless, as the rules permit discovery to extendto ‘any matter in question...in the action’,83 the court may, if appropriate,expand discovery beyond the immediate issues. In Baldock v Addison84

Lightman J considered that mere interest in quantum would not besufficient. However, the likely inability of the applicant for more expansivediscovery to meet any adverse order for costs, in particular, in cases wherethe additional costs would be substantial, may be relevant.85 His Lordshipstated that the court must weigh the interests of the parties:

The decision in any particular case must involve a balancing of theinterests of the parties, how impelling is the need for the informationand how expensive and intrusive will be the exercise of makingdiscovery. Account is to be taken of alternative means for providingthe information or otherwise satisfying the reasonable requirementsof the applicant for discovery. The decision must be made on thebasis of the evidence: statements of counsel on instructions — unlessagreed between the parties beforehand — will not be sufficient.86

8788

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[1995] 1 WLR 172, at p 175.Also see GE Capital Group Ltd v Bankers Trust Co [1995] 1 WLR 172, at p 175, in whichHoffman LJ explains Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR529.[1995] 1 SLR 595.Cap 158.Ie, direct purchasers or derivative title holders. See [1995] 1 SLR 595, at p 596.[1995] 1 SLR 595, at p 596.[1995] 1 SLR 751.


THE RIGHT TO CONCEAL PARTS OF A DOCUMENT ONDISCOVERY

The mere inclusion of a document in the list of documents does notnecessarily entitle the party to whom discovery is given to inspect thewhole document. The party giving discovery may cover up those parts ofthe document which are irrelevant to the suit, or are privileged fromdisclosure. So ruled Hoffman LJ in GE Capital Group Ltd v Bankers TrustCo87 where his Lordship said that this may be done regardless of expungedpart’s physical or grammatical relationship to the relevant parts, providedthat the concealment would not destroy the sense of the relevant parts ormake them misleading.88

REPRESENTATIVE PROCEEDINGS PURSUANT TO STATUTE

Where a representative entity or person has no direct interest itself orhimself in a suit, but claims or defends on behalf of others, who have suchan interest, Order 15, rule 12 does not apply. The rule requires that therepresentor has the same interest in the proceedings as the persons onwhose behalf he acts. Thus, in Management Corporation Strata Title PlanNo 1279 v Khong Guan Realty Pte Ltd,89 Selvam J held that the rule didnot operate where a management corporation brought representativeproceedings on behalf of the purchasers (and their successors and assigns)of a condominium building project against the developers for defects inwork. In these circumstances it is the statute which offers the basis forrepresentative proceedings. Section 116(1) of the Land Titles (Strata) Act90

allows proceedings to be taken on behalf of subsidiary proprietors of lotsin a subdivided building, who are jointly entitled to take action in respectof common property. Any judgment or order given or made in favour ofthe management corporation is deemed to have been given or made infavour of the subsidiary proprietors. His Honour ruled that the sectionapplied to the circumstances of the case and therefore the corporation wasentitled to bring representative proceedings on behalf of all proprietors forthe time being91. The learned judge added that the proprietors were notrequired to prove their damages separately.92

Section 116 was again the subject of consideration in similar circumstancesin Management Corporation Strata Title Plan No 1272.93 Warren L.H.

9495

9697

Ibid, at p 763.Ibid, at p 764. This accords with Selvam J’s interpretation in Management CorporationStrata Title Plan No 1279 v Khong Guan Realty Pte Ltd (above). ‘Subsidiary proprietor’is defined in the Act as a subsidiary proprietor for the time being.[1994] 3 MLJ 703.This was clear from the writ and statement of claim.


Khoo J agreed with Selvam J that section 116 is intended to operate wherea management corporation brings proceedings on behalf of subsidiaryproprietors who are jointly entitled to take action in respect of commonproperty. In this case, a number of arguments were raised about the scopeof the section. The defendant developers contended that the subsidiaryproprietors only had several rights (not joint entitlement) to sue, havingpurchased their respective units from the former under separate sale andpurchase agreements. In response, his Honour pointed out that the sectionhad to be viewed from a procedural rather than substantive perspective:

It seems to me that the purpose of the section is to simplify theprocedural, as opposed to the substantive, aspect of the proceedingsso as to avoid the need to name a large number of plaintiffs. I do notthink that the operation of the section depends on whether thesubsidiary proprietors concerned have a joint substantive right tosue. Neither is it affected by the fact that the subsidiary proprietors’ownership of the common property in a condominium is as tenantsin common rather than as joint tenants.94

Nor did the learned judge accept the argument that section 116 limited thesubsidiary proprietors who could sue to the original purchasers:

Seeing that the sub-sales of units in a condominium, indeed of anyreal property, is a common occurrence, a reading like that suggestedwould drastically reduce the usefulness of the provision. The subsidiaryproprietors referred to in the section must therefore be read to meanthe subsidiary proprietors from time to time of the lots comprised inthe subdivided building.95

AMENDMENT PURSUANT TO ORDER 20, RULE 5(4) (RC)

In Malaysian case, Tan Yok Fong v Khoo Ban Kok,96 the plaintiff sued thedefendants as administratrix of her late husband’s estate; although, inessence, she was claiming as a dependant.97 She applied to amend the writand statement of claim to reflect her proper status. The amendment wasrightly allowed in the circumstances because the plaintiff had the capacityto sue as a dependant at the date of the issue of the writ.

However, the Malaysian High Court went on to state, obiter,: ‘...the courthas the power to alter the capacity in which a party sues as the administratorof the deceased, even if he has acquired that capacity after the


commencement of the action’.98 With respect, the requirement of rule 5(4)that the capacity of the applicant must relate back to the date of the issueof the writ does not appear to have been considered. This seems clear fromthe High Court’s reference to the English position,99 which, since 1981, hasbeen very different to that of Malaysia and Singapore. In England, rule5(4) was extended in that year to allow a party to apply to amend thecapacity in which he sues even if that capacity was acquired after the dateof the commencement of proceedings.100 Accordingly, the more flexibleEnglish rule has no bearing on the procedure in Malaysia and Singaporewhere the rule has remained unchanged.101

Rule 5(4) does not encompass an amendment to include an additionalcapacity. In Government of Malaysia v Mohamed Amin bin Hassan,102 themajority of the Supreme Court held that the plaintiff, who had brought anaction as administrator of his son’s estate, could not amend the statementof claim by adding himself and his wife as plaintiffs in their personal capacity.Lee Hun Hoe CJ and Syed Agil Barakbah SCJ103 decided that the words‘to alter the capacity’ in the paragraph must be limited to the modificationor substitution of the capacity in which the party sued.104

AFFIDAVITS IN INTERLOCUTORY APPLICATIONS: SOURCE OFINFORMATION OR BELIEF

Phillips J., in Deutsche Ruckversicherung v Walbrook Insurance Co.,105

differed from the view that a deponent must, at the interlocutory stage,identify as the source of his information or belief an original source ofevidence which would be admissible, at trial.106 His lordship expressed his

9899

100101

102103104

105106

Ibid, at p 707.At p 708 of the judgment, the court refers to Bullen & Leake & Jacob’s Precedents ofPleadings (13th ed) at p 373.By RSC (Amendment) 1981 (SI 1981 No 562).The former English rule 5(4) (the present Malaysian and Singapore rule) was found bythe Law Reform Committee (in its report on Limitation of Actions (1977) (cmnd 6923))to be too restrictive, ‘because it allows a plaintiff to add a claim on behalf of the estateif probate is subsequently granted to him as executor since his title would relate back tothe death, but it did not cover the comparable situation where the plaintiff is subsequentlygranted letters of administration since the title in his case related back to the date of thegrant which would normally have been after the issue of the writ’: SCP, 1982, 7thcumulative supplement, para 20/5–8/7C.[1986] 1 MLJ 224.Who constituted the majority.His Lordship also pointed out that if the plaintiff’s amendment were to be allowed, thedefendant would have been deprived of his right to rely on the expiry of the limitationperiod.[1995] 1 WLR 1017, at p. 1025.Ord 41, r 5(2) (RC) provides that an affidavit ‘sworn for the purpose of interlocutoryproceedings may contain statements of information or belief with the sources and groundsthereof’.

107108109

Ibid.[1995] 2 SLR 523.Ie, Arbitration Rules of the Singapore International Arbitration Centre, r 18(g). Thisparagraph provides that the court may ‘...order the preservation, storage, sale or otherdisposal of any property or thing under the control of any party’.


concern that this would be placing too onerous a duty on the applicantwho is constrained by his need to act quickly:

The object of the rule militates against placing this restriction uponthe natural meaning of its words. In a situation of urgency a plaintiffmay well not have enough time to identify or trace evidence whichwill be admissible at the trial. If he has learnt of facts via anintermediate source which there is good reason to belief will, itself,have had access to primary sources of information, I can see no goodreason for precluding the plaintiff from relying upon that intermediatesource as a ground for seeking interlocutory relief. Perhaps the mostimportant form of interlocutory relief is the injunction. It seems tome that the power of the court to grant an interlocutory injunctionis one that should be flexible and not fettered by the technical rulesof admissibility of evidence that apply at a trial.

Phillips J. preferred to treat the nature of the source of information orbelief as bearing on weight rather than admissibility:

An original source will normally carry much more weight than anintermediate source, and, where original sources are known, theymust be identified. But it does not follow that intermediate sourcescannot be referred to or be relied upon. Ultimately it must be for thecourt to weigh all the material in order to decide whether the applicanthas made out his case for the interlocutory relief sought.107

THE SCOPE OF ORDER 29, RULE 2(1) (RC)

This rule provides:

On the application of any party to a cause or matter, the court maymake an order for the detention, custody or preservation of anyproperty which is the subject-matter of the cause or matter, or as towhich any question may arise therein, or for the inspection of anysuch property in the possession of a a party to the cause or matter.

Certain questions are raised by the terminology of this provision, such asthe scope of the word ‘property’ and the circumstances in which the propertywould be considered to be the subject matter of the action. In BocotraConstruction Pte Ltd v A-G,108 the Singapore Court of Appeal, in consideringthe effect of an arbitration rule109 essentially similar to Order 29, rule 2(1),concluded that ‘property’ does not include choses in action, but extends


only to ‘physical items which are capable of inspection’.110 Accordingly, aright to call for payment under a bank guarantee or performance bondwhich has yet to be exercised is not within the scope of rule.111 Anentitlement to be paid under a performance bond is also disqualified underthe rule because it is not the subject matter of the action, but a relatedright. Similarly, where the right to call for payment under a bank guaranteeor performance bond is exercised so that cash is obtained, this is not thesubject matter of the action.

The Court of Appeal accepted the English Court of Appeal’s constructionof the rule in Potton Homes v Coleman Contractors:112

[it] ‘is intended to enable the court to preserve until trial the subjectmatter of the litigation in specie: it cannot be used to freeze cash inthe hands of a party, even though the source of that cash can bereadily identified and is, may be, directly connected with the otherclaims and counterclaim in the action’. 113

In Bocotra, Karthigesu JA, who delivered the judgment of the SingaporeCourt of Appeal, added that the arbitration rule,114

...like Order 29, rule 2(1), can only apply to enable the preservationof physical items which form the subject matter of arbitration inspecie or are otherwise relevant thereto. The preservation of theseitems should be essential to the rights of parties being determinedunder the arbitration.115

INJUNCTIONS: APPLICATION OF AMERICAN CYANAMIDPRINCIPLES

Banking transactions

It is well established that in the absence of a clear case of fraud the courtwill not interfere in transactions involving letters of credit, performancebonds and bank guarantees by granting an injunction. In Brody, White &Co Inc v Chemet Handel Trading (S) Pte Ltd116 and Bocotra Construction

110

111112113

114

115116

[1995] 2 SLR 523, at p 540. The decision of the High Court was confirmed (Re AnArbitration between Bocotra Construction Pte Ltd and PWD, Government of the Republicof Singapore [1995] 1 SLR 567).Ibid, at pp 538–540.(1984) 28 Build LR 19.Ibid, at p 32 (per May LJ). Cited in Bocotra by the Court of Appeal at [1995] 2 SLR 523,at pp 538, 540, and by the High Court at [1995] 1 SLR 567, at p 576. Also see the relatedcases of Bocotra Construction Pte Ltd v A-G [1995] 2 SLR 170; Bocotra Construction PteLtd v A-G (No 2) [1995] 2 SLR 733.Ie, r 18(g) of the Arbitration Rules of the Singapore International Arbitration Centre,which enables the court to ‘...order the preservation, storage, sale or other disposal of anyproperty or thing under the control of any party’.[1995] 2 SLR 523, at p 540.[1993] 1 SLR 65, at p 70.


Pte Ltd v A-G (No 2),117 the Singapore Court of Appeal adopted thefollowing observations of Sir Donaldson MR in Bolivinter Oil SA v ChaseManhattan Bank:118

Judges who are asked, often at short notice and ex parte, to issue aninjunction restraining payment by a bank under an irrevocable letterof credit or performance bond or guarantee should ask whether thereis any challenge to the validity of the letter, bond or guarantee itself.If there is not or if the challenge is not substantial, prima facie noinjunction should be granted and the bank should be left free tohonour its contractual obligation, although restrictions may well beimposed upon the freedom of the beneficiary to deal with moneyafter he has received it. The wholly exceptional case where aninjunction may be granted is where it is proved that the bank knowsthat any demand for payment already made or which may thereafterbe made will clearly be fraudulent. But the evidence must be clear,both as to the fact of fraud and as to the bank’s knowledge. It wouldcertainly not normally be sufficient that this rests upon theuncorroborated statement of the customer.

In Brody, White & Co Inc v Chemet Handel Trading (S) Pte Ltd,119 LaiKew Chai J, who delivered the judgment of the Court of Appeal, explainedin relation to the letter of credit transaction:

[it] constitutes an independent contract between the issuing bankerand the beneficiary, which is not affected by any irregularities in theunderlying contract in pursuance of which the credit is issued. Therule is crucial to the smooth functioning of the world of internationaltrade and trade-financing.120

This principle was applied by the Court of Appeal to an arrangementinvolving a performance bond in Bocotra Construction Pte Ltd v A-G (No2).121 Karthigesu JA, who delivered the judgment of the court, held that aninjunction would not be granted to restrain a call or payment on the bondwhere fraud was not involved.122 Distinctions between different aspects ofthe commercial transaction have little bearing on the matter as the

117118119120

121122

[1995] 2 SLR 733, at pp 744–745.[1984] 1 Lloyd’s Rep 251, at p 257.[1993] 1 SLR 65.Ibid, at p 70. In The ‘Bhoja Trader’ [1981] 2 Lloyd’s Rep 256, Donaldson LJ said:‘Thrombosis will occur if, unless fraud is involved, the courts intervene and therebydisturb the mercantile practice of treating rights thereunder as being the equivalent ofcash in hand’. Cited at [1993] 1 SLR 65, at p 70.[1995] 2 SLR 733.Ibid, at p 743.

123124

125126

[1993] 1 SLR 65, at p 72.Ibid, at p 744. Also see in this context, Deutsche Ruckversicherung AG v WalbrookInsurance Co Ltd [1994] 4 All ER 181. For other cases involving the application of theprinciples discussed, see Discount Records Ltd v Barclays Bank [1975] 1 WLR 315;Kvaerner Singapore Pte Ltd v UDL Shipbuilding (S) Pte Ltd [1993] 3 SLR 350.[1995] 1 SLR 159.Ibid, at p 165.


overriding concern is whether there will be undue interference with thebanking arrangement. As Lai Kew Chai J said in Brody, White & Co Inc.

It was irrelevant that the injunction in the present case was one whichprevented the appellants from encashing the letter of credit, ratherthan one which restrained the bank from honouring the credit. Theconsequence would have been the same: the documentary creditcontract between the bank and the appellants, which should beindependent of the underlying contract between the appellants andthe respondents, was in effect being frozen by the injunction obtainedby the respondents123

Similarly, in Bocotra Construction Pte Ltd, Karthigesu JA stated: ‘there isno distinction between the principles to be applied in cases dealing withattempts to restrain banks from making payment or those dealing withrestraint of callers from calling for payment’.124

If a clear case of fraud is shown the issue arises as to the principles to beapplied by the court in determining whether it should grant the injunction.In Rajaram v Ganesh,125 the High Court did not think that the Court ofAppeal in Brody, White & Co Inc intended to exclude the ‘balance ofconvenience’ test altogether:

[The Court of Appeal] did not say and could not have meant that thebalance of convenience test does not apply to such cases. Therequirements for granting an injunction in such cases are morestringent than in a normal case, not less stringent. What [the Courtof Appeal] said was that, unless a clear case of fraud is established,the matter will not proceed further to a consideration of the balanceof convenience.126

This proposition is based on the assumption that the balance of conveniencetest applies when the court is considering the grant of an injunction incircumstances which involve fraud. The Court of Appeal in BocotraConstruction Pte Ltd was not of the same mind. Karthigesu JA, havingreferred to this passage in Rajaram v Ganesh, said:

To allay these concerns, we need only note that dispensing withconsideration of the balance of convenience does not make aninjunction any easier to obtain. Indeed, a higher degree of strictnessapplies, as the applicant will be required to establish a clear case of

127128129130131

[1995] 2 SLR 733, at p 747.[1995] 1 MLJ 149.Ibid, at p 158.[1995] 2 SLR 148.Ibid, at p 150.


fraud or unconscionability in interlocutory proceedings. It is clearthat mere allegations are insufficient.127

It would seem, therefore, that the balance of convenience test does notapply when the court considers granting an injunction in circumstancesinvolving a clear case of fraud.

The Malaysian position appears to be different to that in Singapore. InEsso Petroleum Malaysia Inc v Kago Petroleum Sdn Bhd,12 8 the SupremeCourt declared that the ‘balance of convenience’ test applies where aninjunction is sought to restrain payment on a bank guarantee. The courtstated that this situation did not constitute an exception to the applicationof the American Cyanamid principles.129

It must be said that none of the established authorities — which, as hasbeen seen, provide otherwise — were considered by the Supreme Court.

Where the applicant would in substance obtain all the reliefs he seeks

In Remus Innovation Forschungs-Und AP Mbh v Hong Boon Siong,130

Warren LH Khoo J explained the approach in these circumstances:

...if the iterim injunctions they seek were granted in these interlocutoryproceedings, the plaintiffs would in substance obtain all the reliefsthey seek without proceeding to a final hearing. In these circumstances,I think that it is legitimate for the court to have some regard for theapparent weight of the plaintiff’s case. While recognising that noissues of fact can be resolved on affidavit evidence, I think it islegitimate for the court to form some idea about the relative strengthsand weaknesses of the parties’ respective cases by reference to factsor law not in dispute, at the same time making due allowance for thepossibility that particular points of fact or law might be decided oneway or the other at the trial. I think that the threshold for the plaintiffsto cross in this case should be somewhat higher than that their claimshould not be frivolous or vexatious or that it should be merely bearguable. The oft-cited passage from Lord Diplock’s speech in theAmerican Cyanamid case should be used as guidelines rather than asimmutable rules in the exercise of the court’s discretionary jurisdictionin the matter of granting or withholding interim reliefs.131


EXECUTION OF THE ANTON PILLER ORDER

The execution of the Anton Piller order must be properly carried out. InExpanded Metal Manufacturing Pte Ltd v Expanded Metal Co Ltd,132 TheanJA said that the party in whose favour the order is made is responsible forensuring that the terms are not ambiguous.133 As he is not entitled to takeadvantage of any ambiguity in the order134 it is in his interest to ensure thatthe draft order is clearly worded. His Honour emphasised the importanceof close adherence to the terms of the order:

We need hardly stress that the terms of an Anton Piller order mustbe strictly complied with and it is the duty of the solicitor executingthe Anton Piller order to ensure due and proper compliance with allthe terms thereof.135

The court found that the execution of the order had been defective becausethe number of persons entering the appellant’s premises exceeded thatprescribed in the order. However, the court declined to discharge the orderon this ground as the appellants did not suffer prejudice in the circumstancesof the case.136

A practice direction now sets out the procedures governing the mode ofexecution.137

JEFFREY PINSLER*

132133134135136

137

*

[1995] 1 SLR 673.Ibid, at p 681.Ibid.Ibid.Ibid. Compare A v C [1982] RPC 509, in which the order was discharged because it oughtnot to have been granted in the first place, and the execution had been improper inseveral material respects.See Practice direction No 1 of 1995.LL.B (Hons) (Liverpool); LLM (Cambridge); Barrister; Advocate and Solicitor of theSupreme Court; Associate Professor, Faculty of Law, N.U.S.

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