KOMAL PATEL AND OTHERS v. CHRIS AU AND OTHERS

HCA 183/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 183 OF 2014

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D E C I S I O N

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Introduction

1.  This litigation between the parties has had a long history and by this decision I am dealing with two applications for specific discovery and directions for an application for an injunction order. 

2.  The two applications for specific discovery are made under Order 24 rules 3 and 7 of the Rules of the High Court by the four plaintiffs against the three defendants and by the 1^st defendant against the four plaintiffs.  The application for an injunction order has been taken out by the four plaintiffs against the three defendants. 

3.  At the conclusion of the hearing I said that I would hand down my reasons for my decision which I now do. 

Background

4.  This case involves a dispute between investors in the BVI holding company, Kudeta Ltd (KDT BVI), which owns through its 100% shareholding of the Singapore company, Ku De Ta Pte Ltd (KDT SG) the restaurant and bar in Singapore known as Ku De Ta.[1] The registered shareholders of KDT BVI prior to 30 January 2014 were Essence Investments Ltd (Essence), holding an interest of 27.5% and Retribution Ltd (Retribution) holding an interest of 72.5%.  After 30 January 2014, the registered shareholders of KDT BVI were L Capital KDT Ltd (L Capital), holding an interest of 51% and Retribution holding an interest of 49%.

5.  Komal Patel (Patel) through the corporate vehicle Rocky Cape International Ltd (Rocky Cape), and Chris Au (Au) through the corporate vehicle Retribution, concluded a joint venture agreement dated 20 July 2009 for the establishment of KDT BVI as the joint venture vehicle to operate the Ku De Ta business.

6.  KDT BVI’s authorised share capital was divided into 10,000 shares and it was agreed that 5100 shares were to be issued and allocated to Retribution (then representing the interests of Au) and Rocky Cape (then representing the interests of Patel) on the proportions of 2,550 shares each.  This, however, did not eventuate.  It was also intended that the remaining 4,900 shares would be allocated to a third-party investor, but no such allotment took place.  The shares in KDT BVI were in the name of Ho Ching Yi Elsa (Ho) who held them for the equal interests of Au and Patel through their respective corporate vehicles. It appears that Patel was holding a portion of his interest on trust for Jason Mark Cohen (Cohen). 

7.  Sometime in 2010, Essence acquired an interest of 27.5% in the Ku De Ta business leaving Retribution with an interest of 72.5%.  This resulted in Ho transferring 3,698 shares to Retribution and 1,402 shares to Essence.  It appears that the 72.5% interest held by Retribution included a 25% interest held by Rocky Cape.  This was to be represented by a transfer of shares but no such allotment took place.  It also appears that Patel was holding a portion of his interest on trust for Cohen and Harilaos Apostolides (Apostolides).  As a result of the transfer to Rocky Cape not taking place, the various interests of the parties in KDT BVI were held through Retribution.  Ho was the nominee shareholder and director of Retribution.

8.  From around late 2011 until around January 2013, Apostolides on behalf of KDT BVI negotiated with L Capital for it to acquire a major interest in the business.  On 30 January 2013 a Convertible Loan Agreement and a Share Purchase Agreement were executed with L Capital.  At the same time, a Declaration of Bare Trust was executed by Ho as trustee for Patel, Apostolides and Au in relation to the shares she held in her name in Retribution.  Under this document each of them was to hold one third of the shares in Retribution and a third of Retribution’s 72.5% interest in KDT BVI. 

9.  L Capital renegotiated its agreement with KDT BVI and it was agreed that L Capital would acquire a 51% interest in KDT BVI which included purchasing all of Essence’s 27.5% interest and 12.6% of Retribution’s interest in KDT BVI.  As a result, an Amended and Restated Convertible Loan Agreement (ARCLA) and an Amended and Restated Shareholders’ Agreement (ARSHA) were executed on 31 December 2013.

10.  The plaintiffs contend that as of the conversion date of 30 January 2014 under the agreements with L Capital, Ho held the shares in Retribution on trust for Patel, Cohen, Apostolides, Au, and others in the proportion stated in the Representation Letter of 29 January 2014 and that Ho in breach of trust failed to act in the best interests of the beneficiaries, in particular Patel and Apostolides.  The plaintiffs also contend that the defendants by their conduct have wrongfully interfered with the plaintiffs’ contractual rights under the ARCLA and the ARSHA.[2]

11.  The 1^st and 2^nd defendants contend that the Declaration of Trust was executed in anticipation of L Capital’s acquisition in January 2013, which was not completed and therefore the declaration did not reflect Au’s shareholding in KDT BVI; that Au held a 35.5% interest in KDT BVI by December 2013 and an oral agreement was made on 26 December 2013 with Patel, Apostolides, Essence, and Yew Kuan Cheong, for Au to be bought out of his interest with the proceeds of the L Capital acquisition in January 2014; and Au would receive SGD33,732,539.50 for his shares in Retribution which would be effected by L Capital’s payment of SGD11,984,782.89 to Retribution and of SGD21,747,606 of the SGD26,115,755 payment to Essence. It is also contended by the 1^st and 2^nd defendants that upon conclusion of the oral agreement, Au would hold 1 share in Retribution or KDT BVI and Retribution would continue to hold a 10% beneficial interest in KDT BVI on trust for Balaji Singh Teeka (Teeka), which had been acquired in about April and August 2013 from Au.[3]

12.  The issues in dispute between the parties are whether Au misappropriated funds from KDT BVI contrary to agreed dividend distribution or profit-sharing between the investors; whether he failed to account or distribute to the other investors their entitlement to the profits and dividends of the Ku De Ta business and the percentage interest that the investors held in KDT BVI before and after the L Capital acquisition.

Principles regarding specific discovery

13.  Order 24 rule 3(1) provides that, subject to rules 4 and 8, the court may order any party to a cause or matter to make and serve on any other party a list of the documents which are or have been in his possession, custody or power relating to any matter in question in the cause or matter, and may at the same time or subsequently also order him to make and file an affidavit verifying such a list and to serve a copy thereof on the other party.

14.  Order 24 rule 7(1) provides that, subject to rule 8, the court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an affidavit stating whether any document specified or described in the application is, or has at any time being, in his possession, custody or power, and if not, then in his possession, custody or power when he parted with it and what has become of it.

15.  The orders sought by the parties seek from the other party verification that they possess or had possessed specified documents, and to produce copies of the documents that they possess and to state what has become of the documents that they no longer possess.

16.  The general principles regarding specific discovery have been usefully summarised by Ng J in Jade’s Realm Ltd v Director of Lands, HCA 1509/2012, 9 January 2015 as follows:

“(1) There is no jurisdiction to make an order for specific discovery under RHC O 24 r 7 unless there is sufficient evidence or prima facie case that: (a) the documents or classes of documents exist which the other party has not disclosed; (b) the documents relate to a matter in issue in the action; and (c) the documents are in the possession, custody or power of the other party.

(2) Once it is established that those three prerequisites for jurisdiction do exist, the court has a discretion whether or not to order discovery.

(3) The Court will not make an order unless the discovery sought is necessary either for disposing fairly of the cause or matter or for saving costs.

(4) The Peruvian Guano test remains the test of relevance. A document is relevant if:

(i) it is reasonable to suppose that it contains information which may, not must, either directly or indirectly enable the party requiring the same either to advance his own case or to damage the case of his adversary; or

(ii) it is a document which may fairly lead the party to a train of inquiry which may have either of those two consequences.

(5) For the purpose of discovery, the pleadings have to be looked at broadly.

(6) The order must identify with precision the documents or categories of documents which are required to be disclosed, for otherwise the person giving discovery may find himself in serious trouble for swearing to a false affidavit, even though doing his best to give an honest disclosure.

(7) Notwithstanding the Peruvian Guano test, ‘fishing’ is not allowed, and discovery should not be oppressive.

(8) The respondent may answer an application for specific discovery by an affidavit stating that he does not have the documents, and this will be conclusive at the interlocutory stage.”

17.  Relevance is highly important in the exercise of discovery and will primarily be determined by reference to the pleadings.  The threshold test is that the documents sought must be relevant in that it is reasonable to suppose that they may directly or indirectly enable the party requiring the discovery either to advance his own case or undermine the case of the opposing party but subject to the limitation that the discovery is not be used as a fishing expedition.  The court can still refuse the application if the documents being sought are unlikely to contain or yield information of sufficient evidential materiality to the pleaded case of the parties as to make their disclosure necessary for the fair disposal of the proceedings or to save costs.  This is stipulated under Order 24 rule 8.

18.  One issue that the parties focused on in the course of submissions was the difference between a permissible train of inquiry and an impermissible fishing expedition.  The exercise of discovery will depend upon the nature of the case and the stage of the proceedings at which the discovery is sought.  In the present case, specific discovery is sought at an advanced stage of the proceedings and in the lead up to trial.  I make this point because this is not a situation where the proceedings are essentially speculative and where the process of discovery could very well be a fishing exercise.[4]  

19.  The proper function of discovery requires that the documents sought come within the four corners of the pleaded case of the parties, that the documents are likely to provide information of sufficient evidential materiality in the fair and economic disposal of the case, and that the discovery is not oppressive or a fishing exercise. 

20.  I should also add that there has been discovery and disclosure by the parties and that the purpose of the applications is to request documents in addition to what each party has hitherto disclosed to the other.  The orders that I have made should bear this in mind.  Up to and including the hearing, the parties were submitting Schedules of Documents to each other. 

The plaintiffs’ application

21.  During submissions the plaintiffs have amended the terms and scope of the documents they originally sought in order to ensure that the descriptions of them were appropriately precise and specific.  The final terms of the class of documents are set out below. 

“(A) Bank statements, payment instructions / authorizations / receipts and supporting documentation for the period from September 2009 to 30 April 2014 of the following bank accounts:

(a) United Overseas Bank (Singapore) account no. 3983629715 of the 1^st Defendant;

(b) United Overseas Bank (Singapore) account no. 380-912-077-3 of the 1^st Defendant;

(c) United Overseas Bank (Singapore) account no. 380-912-084-6 of the 1^st Defendant;

(d) United Overseas Bank, (Singapore) account no. 427-322-197-7 of the 1^st Defendant;

(e) United Overseas Bank (Singapore) account no. 136-813-991-8 of the 1^st Defendant;

(f) Bank of America account no. 009503361116 of the 1^st Defendant;

(g) HSBC account no. 502-561012-833 of the 2^nd Defendant;

(h) HSBC account no. 002-9-434289 of the 2^nd Defendant;

(i) bank account(s) of Catalunya Pte. Ltd (Singapore Registration No. 201128706C);

(j) bank account(s) of Au Chocolat Pte. Ltd (Singapore Registration No. 201132677G); and

(k) bank account(s) of Tony’s Pizza Pte. Ltd. (Singapore Registration No. 201322284W).

that refer to any funds emanating from:

(i) Kudeta BVI Limited (“KDT BVI”);

(ii) Ku De Ta SG Pte. Ltd. (Singapore Registration No. 200914857K) (“KDT SG”);

(iii) KDT Entertainment Pte. Ltd. (Singapore Registration No. 201008059R) (“KDT Entertainment”);

(iv) KDT Management Limited (“KDT Management”);

(v) KDT Global Limited; and/or

(vi) and/or SAS Ku De Ta (“SAS KDT”).

and received into the bank account(s) in the name of the 1^st and 2^nd Defendants and/or the 1^st Defendant’s companies, namely:

(I) Catalunya Pte. Ltd (Singapore Registration No. 201128706C);

(II) Au Chocolat Pte. Ltd (Singapore Registration No. 201132677G); and/or

(III) Tony’s Pizza Pte. Ltd (Singapore Registration No. 201322284W).

including the bank accounts identified above.

(B) Bank statements, payment instructions / authorizations / receipts and supporting documentation for the period from September 2009 to 30 April 2014 of all bank accounts in the name of KDT Entertainment, KDT Management, KDT Global Limited and/or SAS KDT in the possession, custody or power of the 1^st, 2^nd and/or 3^rd Defendants.

(C) All written communications for the period from September 2009 to 31 January 2014 between the 1^st Defendant and the 2^nd Defendant concerning or directing the receipt, dispersal or use of funds emanating from KDT BVI in:-

(i) HSBC HK Bank account number 808-642847-838 in the name of Kudeta Limited; and/or

(ii) HSBC HK Bank account number 808-673065-838 in the name of KDT Management Limited.

(D) All written communications for the period from September 2012 to 28 February 2014 in the possession, custody or control of the 1^st or 2^nd Defendant between the 1^st or 2^nd Defendant and Rodyk & Davidson LLP, being the Singaporean solicitors acting on behalf of KDT BVI and KDT SG in relation to the purchase of shares by L Capital KDT Ltd in KDT BVI (“LCap Transactions”) that refer directly or indirectly to the legal and/or equitable shareholdings in KDT BVI and the 3^rd Defendant.

(E) All written communications for the period from September 2009 to present in the possession, custody or control of the 1^st Defendant between the 1^st Defendant and the financial controller of KDT SG during part of the material time, Ng Siew Pheng, regarding the movement of funds from KDT BVI and its subsidiaries (the “KDT Business’ Funds”) to any of the following persons and entities:

(i) The 1^st Defendant;

(ii) The 2^nd Defendant;

(iii) The 3^rd Defendant;

(iv) Prime Mark Group Limited;

(v) Bay Ridge Investments Limited;

(vi) Catalunya Pte. Ltd;

(vii) Catalunya HK Ltd;

(viii) Tony’s Pizza Pte. Ltd;

(ix) Au Chocolat Pte. Ltd;

(x) Pink Grill; and

(xi) Sino Word Exports Limited.

(F) All written communications for the period from September 2009 to present in the possession, custody or control of the 1^st Defendant between the 1^st Defendant and the financial controller of KDT SG during part of the material time, Andy Yap, regarding the KDT Business’ Funds to any of the persons or entities in sub-paragraph (E) above.

(G) All written communications for the period from 1 January 2013 to present in the possession, custody or control of the 1^st Defendant between the 1^st Defendant and Balaji Singh Teeka (“Teeka”) regarding:-

(i) the sale of shares in the 3^rd Defendant to Teeka and/or Able Vision Ltd that refer directly or indirectly to the legal and/or equitable shareholdings in KDT BVI and the 3^rd Defendant ;

(ii) LCap Transactions that refer directly or indirectly to the matters in sub-paragraph (i) above;

(iii) Teeka’s appointment to the board of directors of KDT BVI relating to the Plaintiffs’ claim of interference with contractual relations; and

(iv) any relevant issue concerning the Court order of 26 March 2014 that came before the board of directors of KDT BVI from the date of the appointment of the 1^st Defendant to the board of directors of KDT BVI since the said Court order imposed obligations on the 1^st Defendant with respect to the Plaintiffs.

(H) All written communications for the period from September 2009 to present in the possession, custody or control of the 1^st Defendant between the 1^st Defendant and Samuel Cheung Kwok Ching, regarding any purchase of motor vehicles that involved use of funds emanating from:

(i) Kudeta BVI;

(ii) KDT SG.

(I) All written communications for the period from September 2009 to present in the possession, custody or control of the 1^st Defendant between the 1^st Defendant and Albert Chin, regarding any purchase of motor vehicles that involved use of funds emanating from:

(i) Kudeta BVI;

(ii) KDT SG.

(J) All written communications for the period from September 2009 to present between the 1^st Defendant, 2^nd Defendant and/or other third parties regarding the formation and maintenance of the corporate structure of KDT BVI, its subsidiaries and the 3^rd Defendant, relating to the issue of the alleged breach by the 1^st and/or 2^nd Defendants of obligations under the JVA, and of fiduciary duties to the 1^st, 2^nd, and 4^th Plaintiffs, including communications regarding the registration of shareholdings and directorships in those companies.

(K) All corporate documents of KDT BVI, its subsidiaries and the 3^rd Defendant, including all board agendas, board resolutions, board minutes, shareholders resolutions and/or minutes of shareholders’ meetings for the period from July 2009 to present relating to the issue of the alleged breach by the 2^nd Defendant of her obligations under the JVA, and the 1^st and 2^nd Defendants’ breach of fiduciary duties to the 1^st, 2^nd, and 4^th Plaintiffs.”

22.  In submission, the plaintiffs variously grouped the class of documents sought when addressing the basis for their disclosure and I will follow suit in my analysis of the merits of their application.  Before I do, I should make some general observations. 

23.  It seems to me that the plaintiffs’ request for these documents stems primarily from the latest Deloitte’s report dated 1 September 2014.  It is noted in the report that the forensic analysis that they undertook was in relation to the transactions of KDT BVI and not any other related entities.  It is also noted that in order to complete a full forensic analysis they require access to the books and records of KDT SG and KDT Entertainment as it was previously reported that there were indications of possible cash leakage from these companies.  As explained in the report, KDT BVI is a holding company for KDT SG and therefore its shareholders expect that KDT BVI should just receive dividends and distribute dividends to shareholders in the agreed proportions. It is observed that the bank statements of KDT BVI contain a number of transactions that are not related to dividend distributions from KDT SG.  The report identified a number of issues relating to questionable transactions in the books and records of KDT BVI.  These transactions concern numerous payments to various persons or entities amounting to a little under HK$60 million and it is submitted by the plaintiffs that the documents are sought to have a full account of the transactions of KDT BVI. 

Class (A), (B) and (C) documents

24.  These classes of documents concern the financial documents relating to accounts in the name of or controlled by any of the defendants; and of accounts in the names of KDT Entertainment, KDT Management, KDT Global Limited and/or SAS KDT; and communications concerning specific HSBC HK Accounts of Kudeta BVI and KDT Management. 

25.  As I have already mentioned, the requests for these documents stem from the Deloitte’s report dated 1 September 2014 and the identification of numerous payments from KDT BVI funds to various persons or entities including restaurants owned by Au, namely, Au Chocolat, Catalunya and Tony’s Pizza.    

26.  It is submitted by the plaintiffs that it is necessary to obtain copies of financial documents identifying entities that received KDT Group funds, and to trace how those funds were used and where they were transferred.

27.  It is submitted by the 1^st defendant that he has disclosed all relevant documents relating to alleged unsubstantiated payments from KDT BVI to KDT Global, KDT Management LTD and SAS KDT as identified in the Deloitte’s report.  He noted that no alleged unsubstantiated payments from KDT SG or KDT Entertainment had been identified in the report.  It is stated in the 1^st defendant’s written submission that the dispute between the parties is not the existence of these transactions but rather whether these transactions were legitimate.  It would seem that the forensic accounts are dealing with both aspects and in order to have a full picture of the financial affairs of KDT BVI and its related and subsidiary companies the discovery sought is required. 

28.  Mr Clive Grossman SC with Ms Queenie Lau, for the 1^st defendant, submitted that it is impermissible to seek information which may lead to a line of inquiry which would disclose evidence.[5]  The relevant line of authority provides that the proper function of discovery allows access to or production of a document which may fairly lead to a train of inquiry which enables a party to advance his case or damage the case of the opposing party.  It is that principle that has guided me in evaluating the applications for discovery.

29.  The 1^st defendant has stated that he is not in possession or control of financial documents relating to the bank accounts of KDT Entertainment, SAS KDT and/or KDT Global.  I note however that he is a director of KDT BVI and if these companies are related or subsidiaries then access to the documents in question should be available.  He also stated that KDT Management is no longer used for the purpose of KDT business but he has controlled of it and will provide the documents sought.  There seems to be no issue on these documents.

30.  Class (C) documents concern all communications between the 1^st defendant and the 2^nd defendant in relation to fund transactions between KDT BVI and KDT Management.  The 1^st defendant stated that he no longer has access to his former email accounts for the KDT business.  I note again that he is a director of KDT BVI and should be able to access email accounts of the company. 

31.  Mr Martin Ho, for the 2^nd defendant, complained about the relevance of these classes of documents.  However, I am satisfied that the documents sought come within the terms and the scope of the case pleaded by the plaintiffs. 

32.  I am of the view that discovery of these classes of documents should be permitted. 

Class (D) documents

33.  This class of documents concerns communications between the 1^st or 2^nd defendants with Rodyk and Davidson LLP (Rodyk) concerning to the LCap transaction. 

34.  Rodyk acted for the plaintiffs and the defendants in the transactions but it is claimed by the plaintiffs that the majority of instructions to Rodyk came from Au.  This seems somewhat inconsistent with the role played by all of the plaintiffs and defendants in bringing this transaction to fruition. 

35.  It is further submitted that Au was responsible for ensuring that representations and warranties to L Capital were true and accurate, and not misleading.  It is on the basis that L Capital later claimed for breaches of representations and warranties in the sum of around $7.9 million that discovery of the documents is sought. 

36.  I therefore allow discovery of the documents only on that basis. 

Class (E) and (F) documents

37.  These classes of documents concern communications regarding the handling of the KDT business’ funds between the 1^st defendant and KDT SG’s financial controllers. 

38.  As I have already mentioned, the Deloitte’s report identifies a wide variety of questionable transactions concerning Au’s use of KDT funds.  The plaintiffs submitted that the documents recording communications relate to the issue of Au’s misappropriation of KDT Group company funds, and failure to account or distribute to the other investors their entitlement to profits or dividends and to Ho’s breaches of her fiduciary duties as trustee.  It is submitted that Au’s communications with key accounting staff at KDT SG is therefore necessary to fairly establish the reasons for the questionable transactions.

39.  I grant discovery to these classes of documents.

Class (H) and (I) documents

40.  These classes of documents concern the communications between Au and Samuel Cheung / Albert Chin regarding the acquisition of motor vehicles with funds emanating from KDT BVI. 

41.  The Deloitte’s report identifies various transfers of funds from KDT BVI to Albert Chin and Samuel Cheung Kwok Ching.[6]

42.  It is submitted by the plaintiffs that this relates to the material issue of misappropriation of monies, and failure to account or distribute profits or dividends.

43.  I grant discovery for these classes of documents. 

Class (G) documents

44.  This class of documents concerns communications between Au and Teeka.  

45.  It is submitted by the plaintiffs that the communications with Teeka sought are limited to those regarding the following:

(1) the sale of shares in Retribution to Teeka or any company controlled by him;

(2) the LCap transactions;

(3) Teeka’s appointment to the KDT BVI board; and

(4) any issue that came before the KDT BVI board from the date of appointment of Au and Teeka to the board.  

46.  I note that item (4) was amended in the course of submissions to relate to any relevant issue concerning the Court order of 26 March 2014 that came before the board of directors of KDT BVI. 

47.  The plaintiffs argued that Au sold part of his interest in KDT BVI to Teeka in about April and August 2013, which gave Teeka a 10% interest.  The plaintiffs further argued that the sale was in breach of the Declaration of Trust and of certain terms of agreements then in force. 

48.  It is submitted by the plaintiffs that communications between Au and Teeka are relevant to the issue concerning the percentage interest of the parties prior to and after the L Capital acquisition in KDT BVI.   

49.  It is also submitted that the communications sought are relevant to the issue of contractual interference by Au, leading to L Capital’s action against the 1^st and 3^rd plaintiffs, and the dilution of Retribution’s shareholding in KDT BVI. 

50.  I agree with the discovery of the documents in Class (G)(i), (ii) and (iii) but I refuse the discovery in relation to (iv) on the grounds of lack of relevance and evidential materiality. 

Class (J) documents

51.  This class of documents concerns communications regarding registration of shareholdings, directorships and corporate structures of KDT BVI, its subsidiaries, and Retribution. 

52.  This class of documents is clearly necessary to fairly dispose of the case given the pleaded cases of the parties.  I note that both Au and Ho agree to disclose these documents.  I also note however that there has already been disclosure of documents within this class and this request concerns any additional documents that are in the possession or control of the1st and 2^nd defendants.

53.  I agree to the discovery of this class of documents. 

Class (K) documents

54.  The plaintiffs seek the corporate documents of KDT BVI, its subsidiaries, and Retribution, including all resolutions and board minutes from July 2009 to present date.  

55.  Until 30 January 2014, Au and Ho controlled KDT BVI and related companies and the corporate affairs of these entities are relevant to the pleaded case of the parties.  The documents seek to address central matters in this dispute and both Au and Ho have accepted that they will disclose them.  I note that this class of documents is in the same situation as the Class (J) documents in that there has been previous discovery in relation to these documents.

56.  I agree to the discovery of this class of documents. 

The 1^st defendant’s application

57.  The terms and scope of the class of documents that the 1^st defendant seeks are set out below.

“(a) Bank statements, payment instructions / authorisations / receipts of all bank accounts held or controlled by the 4^th Plaintiff in the period from 20 July 2009 to present, including but not limited to the bank account held by the 4^th Plaintiff with OCBC Singapore with the account number 629561168001.

(b) Bank statements, payment instructions / authorisations / receipts of all bank accounts held or controlled by Essence in the period from 22 October 2010 to present including but not limited to the bank account held by Essence with OCBC Singapore with the account number 629488487001.

(c) Bank statements, payment instructions / authorisations / receipts of all bank accounts held or controlled by the 1^st Plaintiff, 2^nd Plaintiff and 3^rd Plaintiff into which funds from the 4^th Plaintiff and/or Essence were remitted from 20 July 2009 to present.”

Class (a) documents

58.  The Class (a) documents concern the bank records of the bank accounts held or controlled by Rocky Cape, including bank account number 629561168001 with OCBC Singapore, from 20 July 2009 to present date. 

59.  The plaintiffs agree to give the Class (a) documents for the period from 20 July 2009 to October 2012 because as acknowledged by the 1^st defendant, KDT BVI did not declare any dividends or make payments by way of shareholder loans as intended dividends after that date.[7]

60.  It is argued by the 1^st defendant that the documents sought are necessary to see not only what funds enter Rocky Cape’s bank accounts, but also to whom payments were made from such accounts.  It being relevant to see how the intended dividends received by Rocky Cape were disbursed in ascertaining the beneficial ownership of Rocky Cape and therefore the ultimate beneficial ownership of KDT BVI.  What the 1^st defendant seeks is when funds from KDT BVI entered Rocky Cape’s bank accounts and when they left the accounts and to whom they were made. 

61.  I will grant discovery on that basis only which covers the bank records in relation to the payment of funds from KDT BVI to Rocky Cape bank accounts and any payment or transfer of those funds to another. 

Class (b) documents

62.  The Class (b) documents concern the bank records of the bank accounts held or controlled by Essence, including bank account number 629488487001, from 22 October 2010 to present date. 

63.  The plaintiffs argued that discovery for Essence documents is wrongly directed to them.  They stated that they do not possess or control the Class (b) documents and the discovery of them should be directed to Essence.  It is noted that Essence is the 5^th defendant in the 1^st defendant’s counterclaim which will be giving discovery in due course. 

64.  The 1^st defendant argued that numerous emails show that Essence acted on the instructions of Patel and that he is in possession of documents belonging to Essence.[8] Mr Grossman took me to extracts from email correspondence where there were communications by Patel either with or about Essence but in my view they did not support the 1^st defendant’s assertion that Patel controls Essence and is in possession of the Class (b) documents. 

65.  I fail to see the evidential materiality of the documents in relation to the original claim.  I refuse the discovery sought against the plaintiffs with respect to the Class (b) documents. 

Class (c) documents

66.  The Class (c) documents concern the bank records of the bank accounts held or controlled by the 1^st, 2^nd and 3^rd plaintiffs into which funds from Rocky Cape and/or Essence were remitted from 20 July 2009 to present date. 

67.  The plaintiffs stated that they have not received any dividends from Essence and there are therefore no such documents in their possession or control.  They submitted that there is no proper basis for discovery with such documents.  The records of remittances from the 4^th plaintiff are included in the Class (a) documents but this class of documents seeks the bank records of the 1^st, 2^nd, and 3^rd plaintiffs in relation to such remittances.  The plaintiffs agreed to give the Class (c) documents for the period up to October 2012 which is the date when no further payments were made by KDT BVI to Rocky Cape. 

68.  As I did with the Class (a) documents, I will grant discovery of the bank records of the 1^st, 2^nd and 3^rd plaintiff in relation to remittances from Rocky Cape attributable to payments from KDT BVI. 

The plaintiffs’ application for an injunction order

69.  The plaintiffs have taken out a summons dated 23 April 2015 in which they seek an injunction order by the removal of the 1^st defendant as a director of KDT BVI; the reinstatement of the 1^st plaintiff to the board of directors of KDT BVI; and the appointment of the 1^st and 3^rd plaintiffs as beneficial shareholders of the 3^rd defendant to its board of directors.

70.  Mr Chua Guan-Hock SC and Ms Ebony Ling, for the plaintiffs, argued that the situation with the Ku De Ta business and their interest in it has become a matter of serious concern to them as a result of conduct that they allege the 1^st defendant has engaged in which has put at serious risk their interest in KDT BVI.  The 3^rd plaintiff has filed affidavits in support of this application.[9] 

71.  The allegations made by the 3^rd plaintiff on their face are serious and I agree to fix this matter for hearing as soon as practical. I would be assisted when considering this application by any representations from L Capital, which holds the majority interest in KDT BVI, about the allegations that have been made by the plaintiffs. 

72.  The directions I make in relation to this application are as follows:

1. The plaintiffs’ injunction summons dated 31 March 2015 is adjourned for argument to be fixed on a day in the first half of June 2015, with 1 day reserved, in consultation with counsel’s diaries. 

2. The plaintiffs do file and serve any further evidence and support of this application by 30 April 2015.

3. The 1^st, 2^nd and 3^rd defendants do file and serve any evidence in opposition within 14 days thereafter.

4. The plaintiffs do file and serve any evidence in reply if so advised within 10 days thereafter.

5. No further evidence to be filed without leave of the Court.

6. Any application for filing and serving of further evidence shall be made 10 days before the substantive hearing. 

Costs

73.  As to costs in relation to the two applications, I make an order nisi that costs be in the cause.