Success Elegant Trading Limited v La Dolce Vita Fine Dining Company [2016] SGHC 159
The Singapore High Court, per Andrew Ang SJ, upheld the Assistant Registrar’s decision in La Dolce Vita Fine Dining Co Ltd v Deutsche Bank AG [2016] SGHC 3 in ordering pre-action discovery of customer bank account information against two banks in respect of their customer’s alleged fraudulent misrepresentations.
The Court relied on the framework and requirements for pre-action discovery granted under O 24 r 6(5) of the Rules of Court set out in the Singapore Court of Appeal decision in Dorsey James Michael v World Sport Group Pte Ltd [2014] 2 SLR 208 (“Dorsey James”). The plaintiffs had to show that:
(a) the respondent banks had facilitated wrongdoing;
(b) there was wrongdoing on the part of the plaintiff’s counterparty in respect of which the bank account information is being sought; and
(c) disclosure was necessary, just and convenient.
The Court found that there was strong and cogent evidence of a prima facie case of fraudulent manipulation by the counterparty to the plaintiff’s arbitration claim in the lead up to the acquisition of a company: [65].
The Court also found that there were good grounds for thinking that monies in both the respondent banks’ bank accounts belonged to the plaintiffs and that both the banks had innocently been involved in wrongdoing: [80].
On the necessary, just and necessary requirement, the Court found that although the accounts had been frozen, the plaintiffs would require information to attempt to trace and freeze monies (if any) which had been transferred out of the accounts prior to the grant of the Singapore injunctions; thus, it was clearly just and necessary for the disclosure orders to be made: [82].
On the issue of jurisdictional bar, the Court agreed with the Assistant Registrar below that Dorsey James could be distinguished on the point of whether interlocutory applications such as pre-action interrogatories and pre-action discovery could be made and granted in aid of foreign proceedings because in the present case, there was a clear nexus to Singapore. The Court held that because both the bank accounts were in Singapore, there was a real possibility of proceedings being commenced in Singapore, especially if there were monies remaining in the accounts or there were monies which had been transferred from these accounts to other accounts located in Singapore. There was thus a likely prospect of subsequent proceedings being commenced in Singapore: [85].
On the issue of section 47 of the Banking Act, viz., banking secrecy, the respondents argued that the foreign arbitration did not constitute legal proceedings for the exception that there be disclosure ordered by a Singapore court pursuant to section 175 of the Evidence Act, viz., inspection of bankers’ books. Whereas the Assistant Registrar held that the foreign CIETAC arbitration was a legal proceeding within the purpose of section 175 of the Evidence Act, Andrew Ang SJ circumvented the issue and held instead that the Originating Summons in which the plaintiff applied for the pre-action discovery orders were in and of themselves sufficient to constitute legal proceedings for the purpose of that provision: [97]. Ang SJ held that “the phrase “for any of the purposes of such proceedings” as it appeared in s 175 would include the purpose of tracing and following monies which was the very raison d’etre of the applications in the present Originating Summons. Therefore, Ang SJ held that there was no bar to the plaintiff successfully obtaining the discovery orders.