COMPUTERLAND CORPORATION v. YEW SENG COMPUTER PTE. LTD. AND OTHERS

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. For myself I would have liked a little time in which to commit my thoughts on this matter to writing, but the inter partes application is to be heard tomorrow and I think it is desirable that we should give our decision straight away. In so saying I would reiterate what Cons, J. A, has said earlier, in the course of the argument, deprecating the fact that this appeal has been brought on at all before the hearing of the inter partes application.

2. The Respondent seeks to persuade us to extend the scope of the decision of the House of Lords in Norwich Pharmacal Ltd. v Customs & Excise Commissioners 1974 A.C. 133. By that case it was decided that an action for discovery lay against a party who had become involved in a tortious act to ascertain the identity of the wrong doer, The involvement may be innocent and either voluntary or involuntary, as where it is in consequence of the performance of a statutory duty. In such a case the action is necessary.to enable proceedings against the wrong doer to be instituted: otherwise a wrong would go unrighted.

3. Here the discovery sought is to obtain evidence for the purposes of an action which has already been brought. The Respondent is a plaintiff which sues for breach. of a franchise contract. The Writ does not - at least up till the present - contain any allegations of fraud, conspiracy or any other tort: it alleges that the 1st Defendant (a Singapore company) has failed to pay royalties which are said to be due under the contract, and it seeks evidence as to the amount to which it is entitled. The appellant 2nd Defendant is a Hong Kong company associated with the 1st Defendant and is said to have been carrying on the 1st Defendant's business in Hong Kong. The judge has made an order for discovery against the 1st and the 2nd Defendants and against another defendant who is a shareholder and director of the 2nd Defendant.  Included in the Order is the following paragraph:

"And that the Plaintiff be at liberty to use any affidavit and any document and information obtained in accordance with this order in any manner that should be required whether in Hong Kong or elsewhere for the protection or better protection of the rights of the Plaintiff the subject of this action."

4. The 2nd Defendant contends that the order for discovery in the present action is an abuse of the process and is a device by which the Plaintiff seeks to obtain discovery which normally would not be available against a party to the action until a later stage in the proceedings and which, as is conceded, would permit the use of any information disclosed solely for the purpose of the present action. Mr. Rogers submits that this is a case covered by the Norwich Pharmacal principle. It is true that the Writ includes a claim for discovery, but I am not persuaded that the Plaintiff has established its right to that relief, let alone shown that it has a right to discovery of this kind by way of interlocutory relief. As I understand the speeches of their Lordships in the Norwich Pharmacal Case, they went no further than holding that discovery, as a form of final relief, would be ordered where it is necessary to enable an injured party to decide against whom its action should be brought and to enable him to carry his action forward. In that case it was the identity of the overseas suppliers which was wanted.  In Moodalay v Morton (1785) 1 Bro.C.C. 469 it was whether the persons whose acts were complained of were acting as servants of the company, so that the plaintiff could decide whether to sue the individual tortfeasors or the company. In Banker's Trust Co. v Shapira 1980 3 All E.R. 353 it was information which would enable the plaintiff to trace where the money obtained from it by fraud had gone and who could be sued for its recovery: there was alleged to be a breach of a constructive trust. In the present case Mr.Rogers told us early on in his argument that he needed discovery to ascertain the amount of the royalties which his client should claim.  He says that discovery might reveal that some other party has conspired with one or more of the existing defendants to the action, but discovery will not be ordered to enable a party to embark upon a fishing expedition. He has subsequently suggested that the Plaintiff might need the information it now seeks to aid an action in Singapore. There is at present no action on the Hong Kong agreement in Singapore. Information obtained on discovery under 0.24 would be available for such an action by leave of the court when the action has been commenced.

5. The truth is that the Plaintiff is trying to obtain evidence against the existing Defendants in quantification of its claim. The Bill of Discovery was never concerned with the obtaining of evidence. Norwich Pharmacal may not be limited to obtaining the identity of a possible defendant and I would accept that Radio Corporation of America v Reddington's Rare Records 1975 R.P.C. 95 shows that in a proper case additional information may be sought which can be used as evidence, but the information must be necessary for justice to be done. In the present case I do not think it is necessary: the Plaintiff will in due course be entitled to apply for discovery in the ordinary course and everything which could now be obtained on the order which has been granted will become available, and I see no reason why the present form of proceedings should be used to obtain discovery at an earlier stage than otherwise would be available.

6. I therefore would allow this appeal and strike out that paragraph in the Order

Cons, J.A.:

7. I agree with my Lord that the appeal should be allowed and the offending paragraph struck out. I add a few words because we are disagreeing with the judge below on a matter of some importance and one which we are told is of current practice

8. On 6th June the Plaintiffs obtained from Garcia J. an ex parte Anton Pillar type order which included the paragraph which my Lord has quoted. On 9th June that Order was made against the' 2nd Defendant, the 1st and 3rd Defendants not having been served. On 9th June the 2nd Defendant applied to set aside that particular part of the Order and after hearing counsel the judge refused to make any variation. The inter partes hearing of the Order as a whole takes place tomorrow, but in the meantime the 2nd Defendant has pursued this appeal in respect of the judge's refusal on 9th June.

9. The main point of Mr. Litton, who appears for the 2nd Defendant before us, is that the judge had no jurisdiction to make that kind of order. Mr. Rogers who appears for the Plaintiff puts in a simple answer. He says that although in a sense that paragraph is wrong, it is only wrong because it is unnecessary; the order made being of the type approved in Norwich Pharmacal Ltd. v Customs &.Excise [1974] A.C. 133 he has a right to use the information which is disclosed and therefore does not need the paragraph complained of. He accepted that in order to make good his defence, in view of the way the argument on appeal had proceeded, he had to satisfy us on three propositions. The first was that Norwich Pharmacal extended to information as well as to identity. That, I think, was in answer to a criticism raised by the court itself; and the two further propositions (which were in answer to matters raised by Mr. Litton) were that a Norwich Pharmacal type order could be granted ex parte and that this was a proper case in which such an order should have been made. After some initial doubts I was eventually persuaded that his first proposition is good. Norwich Pharmacal is not limited to pure identity: information may be obtained and used in appropriate cases. I am satisfied that that is accepted by the English authorities. But it seems to me the underlying fallacy of Mr. Rogers' argument is that that is not a proper case for a Norwich Pharmacal order at all. The principle which was crystalised in that case is derived from the original equitable bill of discovery, whereby courts of equity were willing to grant discovery so that the plaintiff in their court was not deprived of justice in other proceedings, whether in their own or in a court of law. That is clear from all the speeches in the Norwich Pharmacal Case, and every case since that time to which we have been referred is an example of that principle.

10. In my view the Plaintiff's case does not meet that criterion for three reasons. First, we are not concerned with another action. In a sense the action against the 1st, 2nd and 3rd Defendants is comprised of three separate actions brought together for the sake of convenience, but the fraud which, as I apprehend it, will be alleged in due course in the Statement of Claim is the same for all three, and it is for that action against the three Defendants and not against the Third Party, that the Plaintiff wishes to have the information available. Secondly, it is not necessary at this stage of the proceedings that the Plaintiff should be told what he is seeking. I see no reason why he shouldn't carry on with his action, and normal discovery will in due course provide him with the information that he now seeks. And, thirdly, for myself I have grave doubts both on the facts and on the law, as matters now stand, that this is a Norwich Pharmacal type of case at all. As to the facts, the affidavit contains nothing to show that anyone other than the Defendants is likely, certainly not very likely, to have committed any wrongs against the Plaintiff. As to the law I have doubts that Norwich Pharmacal applies to torts of the kind that will be alleged against the Defendant. I appreciate that in the banking cases fraud was pleaded and relied on but the discovery that was given was not in support of the action for fraud, it was in support of an equitable action to trace moneys said to be the subject of constructive trusts.

11. If then, as in my view, this is not a Norwich Pharmacal case, the discovery granted by Garcia J. must have been what, for convenience, I will call "ordinary discovery". It is accepted that even ordinary discovery may be used with the leave of the court for purposes outside the action in which it is given. It may even be possible that such leave can be justified ex parte, but I think it would need the most unusual circumstances and I see nothing of that unusuality in this present case.

12. For these reasons I think the judge was wrong to make the order that he did and I respectfully agree that the appeal should be allowed.

24th July 1985