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    12:14 PM Ronald JJ Wong and Jeremy Yeo Wen An (Rajah & Tann Singapore LLP)

    Case Comment: Gimpex Ltd v Unity Holdings Business Ltd and others and another appeal [2015] SGCA 8

        

    Introduction

    In Gimpex Ltd v Unity Holdings Business Ltd and others and another appeal [2015] SGCA 8 (“Gimpex v Unity”), the Court of Appeal considered various issues of admissibility of hearsay evidence in a civil case under the Evidence Act (Cap. 97, 1997 Rev. Ed.) (“EA”), which was recently amended in 2012 on the same. This decision is illuminating for: (a) the Court’s views on the factors to be considered in exercising the discretion to exclude otherwise admissible hearsay evidence pursuant to s 32(3), EA and its application of the same; (b) the requirements for admitting hearsay evidence under s 32(1)(j) viz evidence from unavailable witnesses; and (c) the notice requirement under s 32(4)(b) for adducing hearsay evidence under s 32(1). 

    Brief Facts

    The case concerned a dispute regarding a contract for sale of coal by Unity Holdings Business Limited (“Unity”) to Gimpex Limited (“Gimpex”), who purchased the coal for on-sale to Awan Trading Co Pvt Ltd (“Awan”). Gimpex and Awan found the coal quality to be non-compliant with contractual specifications. Awan rejected the coal and Gimpex sued Unity and related parties for inter alia breach of contract and tort of conspiracy. Unity counter-claimed against Gimpex for alleged unlawful rejection of the coal.

    Three reports--the Sucofindo, Intertek and Inspectorate Reports--prepared by the respective entities were material to the parties’ cases, were found to be adduced for hearsay usages, and were accordingly disputed as to admissibility ([67]). We now turn to analyse significant aspects of the Court’s decision. 

    Admissibility of hearsay business records under the amended s 32(1)(b)(iv), EA

    With regard to s 32(1)(b)(iv), EA, the Court observed that the significant amendment was that business records “based on information supplied by other persons” would be admissible, thereby removing the requirement that the compiler and persons who supplied the information must have personal knowledge of the information: [94] (see Chin Tet Yung, "Hearsay Reforms Simplicity in Statute, Pragmatism in Practice" [2014] SAcLJ 398 (“Chin Tet Yung) at [30]). This removed the uncertainty in relation to composite business reports, i.e. consolidated reports consisting of information collected by different people, which was recognized in Vaynar Suppiah & Sons v Abdul Rahim K M A and Another [1974-1976] SLR(R) 112, and on which the Law Reform Committee in the Singapore Academy of Law, Report of the Law Reform Committee on Reform of Admissibility of Hearsay Evidence in Civil Proceedings (May 2007) (“LRC”) at para. 15 noted to be an uncertainty as regards admissibility. 

    Accordingly, the Court found that although the Sucofindo Report was hearsay as the witness giving evidence on the same had no first-hand knowledge as to whether the statements in the report regarding quality of the coal were true ([84]), the Report was prima facie admissible under s 32(1)(b)(iv): [90], [95]. However, the Court excluded it as evidence pursuant to s 32(3), on which we elaborate further below. 

    When is a witness considered unavailable for the purposes of s 32(1)(j), EA

    Gimpex sought to adduce the Intertek and Inspectorate Reports under s 32(1)(j), a new provision introduced to allow statements made by a party who is unavailable as witness to be admissible in court. The Court’s dicta in this case provided clarity on ss 32(1)(j)(iii) and (iv). 

    On limb (iii), the Court stated at [98] that the defendants had to establish 2 requirements: (a) that the witness is outside Singapore; and (b) that it is not practicable to secure his attendance. On requirement (b), the Court at [99] approved Professor Colin Tapper’s view it involved “assessing the likely effectiveness of taking normal steps to secure the attendance of the witness and considering in relation to such judgment the importance of the evidence, the degree of prejudice to the defence if it is admitted, and the expense and inconvenience involved in securing attendance”. On the facts, the Court held that the defendants failed to satisfy s 32(1)(j)(iii) in respect of the Sucofindo Report. Significantly, on requirement (b), the Court held that the fact that the witnesses had resigned from the company did not necessarily mean they were no longer contactable; that what would have been relevant was “how the potential witnesses were previously contacted and what efforts had been made to contact them”: [101]. 

    This approach is congruous with earlier related decisions. The Court of Appeal in Teo Wai Cheong v Credit Industriel et Commercial [2013] 3 SLR 573 (CA) (“Teo Wai Cheong”) took a similar approach in respect of s 33, EA, which concerns evidence given by a witness in a previous judicial proceeding being relevant for a subsequent judicial proceeding where the witness was unavailable. In this regard, the court opined that the party relying on the evidence should satisfy the court that “due diligence” was exercised in contacting the witness. It should provide, inter alia, details as to specific steps and efforts undertaken, including the identity of the individuals who had attempted to locate the witness, instructions given to these individuals and who the individuals had spoken to when attempting to locate the witness: Teo Wai Cheong at [29]-[32]. 

    Teo Wai Cheong should be contrasted with Wan Lai Ting v Kea Kah Kim [2014] 4 SLR 795 (HC) (“Wan Lai Ting”), where Edmund Leow JC, in the context of s 32(1)(j), found at [17] that although it was impracticable for the witness to travel to Singapore as she was wheelchair-bound and suffered from asthma and back pains, there was still the option of video link. Leow JC found the submission that video link was not practical due to the witness’ risk of stroke was equivocal at best. He also rejected the argument that videolink was too expensive as it was incumbent on the party to take “all reasonable steps” to make the witness available. 

    The “all reasonable steps” standard is to be contrasted with the “due diligence” standard in Teo Wai Cheong. The “all reasonable steps” standard is arguably equivalent to the “best efforts” standard, which the court in Teo Wai Cheong implicitly rejected: [29]-[31]. (See Chin Tet Yung at [35]-[39].) Unfortunately, the Court in Gimpex v Unity did not cite either decisions and therefore did not provide guidance on this issue. What is the content of these standards? Absent authoritative clarification, it may be helpful to draw an analogy with the distinction between “all reasonable endeavours” and “reasonable endeavours” clauses, on which the Court of Appeal in KS Energy Services Ltd v BR Energy (M) Sdn Bhd [2014] SGCA 16 (“KS Energy”) recently opined at [62]-[63], [93]-[94]. The practical lesson here is that the party under obligation should apprise the other party of steps it has taken and seek the latter’s comments or suggestions on the same: Teo Wai Cheong at [32]; KS Energy at [91], [93(e)]. The failure to do so might undermine the former’s position at trial. 

    On s 32(1)(j)(iv), the Court found that this limb was satisfied in respect of the Intertek Report as there was evidence of Gimpex’s request to the makers of the report to testify and a reply explaining their reasons for refusal, and an attempt to subsequently contact Intertek to follow up on the failed request: [124]-[127]. The Court did however opine that “more could have been done to procure Intertek’s cooperation to give evidence”: [129]. This suggests that the Court requires reasonable efforts in procuring the witness’ attendance before it would find that the witness had indeed refused attendance for purposes of s 32(1)(j)(iv). 

    Notice requirement under s 32(4)(b), EA

    As Gimpex ran its case on the basis that the Inspectorate Report was not hearsay ([133]), it did not seek to adduce the same under s 32(1), EA, and further did not fulfill the new notice requirement in O 38 r 4 of the ROC, which was introduced to ensure “that the expanded exceptions [on hearsay] are not abused” (Sing., Parliamentary Debates, vol. 88(12) (14 February 2012) (Mr. K Shanmugam, Minister for Law)). 

    The Court held that as a matter of plain construction, the result of non-compliance with O 38 r 4 is that “evidence may not be given” (s 32(4), EA), but that the Court was able to cure the non-compliance pursuant to O 2 r 1 of the ROC ([137]-[138]). In determining whether to cure the non-compliance with O 38 r 4, the Court observed that two main considerations are applicable: (i) the considerations in respect of the exclusionary discretion under s 32(3), EA (elaborated on below); and (ii) whether the failure to give notice prejudices the opposing party (approving Professor Pinsler’s view in Evidence and the Litigation Process (LexisNexis, 4th Ed, 2013) (“Pinsler”) at [6.046]). On (ii), the focus on prejudice is congruous with existing jurisprudence on curing irregularity under O 2 (see Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd [2014] 3 SLR 524 (CA) at [112]-[113]). 

    On the facts, the Court found that the defendants were not prejudiced by the lack of notice as they were given an opportunity to, and did, challenge the evidence, including to cross-examine witnesses on the same: [141]. 

    It is interesting to note that the LRC at para. 102 (in the context of recommending the abrogation of the hearsay rule) proposed a notice requirement “not as a condition of admissibility, but as a safeguard in the sense that failure in compliance will give the trial judge discretion to penalise the party in breach in costs or adversely affect the weight to be given to the hearsay evidence or in extreme cases give rise to an adverse inference”. However, the position taken in s 32(4), and by the Court of Appeal, is that the notice requirement goes to admissibility and not merely costs or weight of evidence. Also, the LRC at para. 103 considered but rejected the possibility that the affidavits verifying list of documents during discovery and/or agreed bundle of documents should be deemed as sufficient notice for the purposes of O 38 r 4 and s 32(4), EA. Nevertheless, it is submitted that these considerations would likely go towards evincing lack of prejudice (c.f. Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd [2014] 3 SLR 524 (CA) at [113]). 

    Finally, on this section, practitioners should pay heed to the Court’s observation at [140] that it would be prudent for parties to take the fallback position that the evidence sought to be adduced is hearsay, admissible under s 32(1), EA, and accordingly, to give the requisite notice under O 38 r 4 and furnish necessary evidence to fulfil the s 32 requirements: [144]. Otherwise, there is a risk that the evidence is not admitted because of prejudice to the opposing party or other considerations of “interests of justice”. 

    Judicial discretion to exclude hearsay evidence pursuant to s 32(3), EA

    The 2012 amendments to the EA introduced s 32(3), EA, which provided for a judicial discretion to exclude hearsay evidence admissible under s 32(1), EA ([105], see also Jeffrey Pinsler, “Admissibility and the Discretion to Exclude Evidence: In Search of a Systematic Approach” (2013) 25 SAcLJ 215 (“Pinsler SAcLJ”) at [30]; and Explanatory Statement to the Evidence (Amendment) Bill, Bill No. 2/2012 at 21). This safeguard was introduced to ensure “that the expanded exceptions [on hearsay] are not abused” and is “in addition to the Court’s inherent jurisdiction to exclude prejudicial evidence” (Sing., Parliamentary Debates, vol. 88(12) (14 February 2012) (Mr. K Shanmugam, Minister for Law)). The present case afforded the Court of Appeal an opportunity to comment on this statutory judicial discretion under s 32(3), EA. 

    The Court at [106]-[108] cited and approved Professor Pinsler’s proposals on the relevant considerations in the application of s 32(3) (Pinsler SAcLJ at [32]; and Pinsler at [6.052]). The proposals draw from the factors stipulated in corresponding legislation in the U.S., Australia and UK. The Court opined that the factors proposed are appropriate generally but need not all be considered in each case: [108]. Further, it appears the Court’s principal concern is with the reliability of the hearsay evidence, although the Court noted there is a balance to be struck between excluding hearsay evidence under s 32(3) on one hand, and on the other hand admitting but giving the evidence less weight under s 32(5): [109]. 

    On the facts, the Court held that the Sucofindo Report should be excluded pursuant to s 32(3), EA as it found that “the report had serious issues concerning its reliability”: [120]. In respect of the Intertek Report, the Court held that it should not be excluded pursuant to s 32(3) ([130]) but should be afforded less weight pursuant to s 32(5) given a (relatively minor) issue of reliability regarding the sampling size of coal: [131].

    While the Court’s observations and decision on s 32(3) in this case is to be welcomed, it left several unresolved issues. First, the Court left open the issue of whether the exclusionary discretion under s 32(3) should be exercised with different approaches in criminal and civil proceedings: [110]. The concern that greater precautions against hearsay evidence should be taken in criminal proceedings has been ventilated in other settings (Sing., Parliamentary Debates, vol. 88(12) (14 February 2012) (Ms. Sylvia Lim, Member of Parliament for Aljunied); ANB v ANC and another [2014] 4 SLR 747 (HC) (“ANB”) at [51], per Quentin Loh J; Deya Shankar Dubey, "Exclusionary discretion and 'in the interests of justice'", SLW Commentary, Issue 1/Oct 2014 at 5). It is significant that the Court at [110] offered a tentative view that the suggestions in Pinsler SAcLJ at [34]-[35] that a different approach should be adopted in criminal proceedings have merit, a sign for the way forward on this potentially contentious issue. 

    Secondly, the relationship between the statutory exclusionary discretion under s 32(3) and s 47(4) on one hand, and on the other hand, the exclusionary discretion grounded in the court’s inherent jurisdiction remains unclear (Muhammad bin Kadar v Public Prosecutor [2011] 3 SLR 1205 (CA), ANB at [47]-[50]; see generally Chen Siyuan, "The judicial discretion to exclude relevant evidence: perspectives from an Indian Evidence Act jurisdiction" (2012) 16(4) E&P 398). It appears that they operate in parallel (Sing., Parliamentary Debates, vol. 88(12) (14 February 2012) (Mr. K Shanmugam, Minister for Law); Pinsler SAcLJ at [36]; on s 47(4), EA, see Ronald JJ Wong, “Judging Between Conflicting Expert Evidence” (2014) 26 SAcLJ 169 at [23]). However, insofar as the latter is not limited to evidence admissible under s 32 or s 47, it is unclear whether the application of the respective discretionary powers differ. The courts in ANB at [49]-[50] and Wan Lai Ting at [19] appear to have treated both types of discretionary powers as equivalent (see Chen Siyuan, "‘In the interests of justice’ as the new test to exclude relevant evidence in Singapore: ANB v ANC [2014] SGHC 172; Wan Lai Ting v Kea Kah Kim [2014] SGHC 180" (2015) 19(1) E&P 67–72). If they do not differ, then s 32(3) and s 47(4) are arguably otiose and conceptually problematic. If the discretionary powers differ, then are the considerations for “prejudicial effect” under the inherent jurisdiction discretion narrower in scope than the “interests of justice” considerations? 

    Conclusion

    The Court of Appeal’s clarifications on some aspects of the recently amended s 32, EA are certainly helpful. It would be prudent for counsel to pay heed to the Court’s observations and guidelines on the same, as well as its tentative direction on the application of s 32(3) in criminal proceedings. However, it is hoped that the Court will have an opportunity in the near future to clarify the relationship between the statutory and inherent jurisdiction exclusionary discretionary powers. 

    * This blog entry may be cited as Ronald JJ Wong and Jeremy Yeo Wen An, "Case Comment: Gimpex Ltd v Unity Holdings Business Ltd and others and another appeal [2015] SGCA 8", Singapore Law Blog (23 February 2015) (http://www.singaporelawblog.sg/blog/article/86)

    ** A PDF version of this entry may be downloaded here

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