1 In this action the plaintiffs claim the sum of $892,611.77 being the balance due from the defendant to the plaintiffs for goods sold and delivered and for commission and for certain partnership trading business in rubber and latex.

2 Soon after the institution of this action an application was made by the plaintiffs for summary judgment. This was refused by the deputy registrar who granted unconditional leave to defend. The plaintiffs appealed to the judge-in-chambers, who affirmed the decision of the deputy registrar.

3 In the amended defence filed herein the defendant avers that, subject to certain specified items, the goods allegedly sold and delivered to the defendant were, in fact, never sold and delivered. The defendant also alleges fraud. In regard to the claim relating to the partnership business in rubber and latex, the defendant counterclaims against the plaintiffs for moneys due to him in accordance with an oral agreement entered into between the panics in May 1976. In short, there is considerable dispute between the parties as regards partnership accounts as well as the accounts relating to the goods allegedly sold to the defendant.

4 Following a summons-foredirections made under O 25 of the RSC, the court on 20 January 1984 ordered that each party served on the other within 21 days a list of documents and filed an affidavit verifying the same. The court also ordered inspection of documents within 14 days of the service of the list.

5 On 26 August 1987, the defendant filed his list of documents and also made an application by way of summons-in-chambers (No 5845/87) asking for, inter alia, an order that the plaintiffs comply with the order of court of 20 January 1984 and that the defendant and such public accountants as might be nominated by the defendant be allowed access to all of the documents in the plaintiffs` list of documents. In his affidavit filed in support of this application, the defendant stated that:

6 In the affidavit, the defendant expressly asked the plaintiffs to disclose certain primary documents for the period 1976-1980, and he gave his reasons why he needed those documents. The documents were: cash books, ledger books, bank credit/debit notes, sale contract files, purchase contract files, local sale bills and invoice books. The defendant said that he needed these documents to countercheck the plaintiffs` claims and to show that the claims could not be true - in the words of the defendant`s accountant, they require `access to Manilal`s books and original contracts and invoices in order to determine the source of goods and their ultimate disposal`.

7 On 27 August 1987, the plaintiffs filed their list of documents (in compliance with the ordcr of court of 20 January 1984) and an affidavit verifying the same. On 31 August 1987, when the application of the defendant in summons-in-chambers no 5845-87 came up, that became an application whether to order a further and better list of documents. After hearing the parties, the court ordered, inter alia, that:

8 A year later on 21 September 1988, the defendant applied by summons-in-chambers for, inter alia, an order that the plaintiffs` action herein `be struck out for failure or refusal by the plaintiffs to give proper discovery of documents in or which have been in the possession, custody or power of the plaintiffs ... relating to the matter in question in this action`. The defendant also applied for an order to enter judgment on the counterclaim against the plaintiffs but this is not seriously pursued. The application to strike out the plaintiffs` action in the matter is now before me.

9 The basis of this application to strike out is that despite repeated requests, the plaintiffs have refused to give discovery of a large number of crucial documents which the defendant says the plaintiffs must furnish under the order of court of 31 August 1987.

10 Background to the present application

11 To better appreciate the issues before me, it may be necessary that I briefly set out the background facts that give rise to the present action between the parties. For a period of four years from May 1976 to May 1980 the parties were in partnership, and the business of the partnership was to trade in rubber and latex. In this regard the defendant says only in physical rubber and latex. They were also, it would appear, trading with each other in various other commodities and, according to the defendant, also in partnership. Between May 1976 until the end of 1978, an associate company of the plaintiffs, Manilal and Sons (M) Sdn Bhd of Penang, also participated in the partnership to trade in rubber and latex.

12 The plaintiffs say that the partnership`s trading in rubber and latex for the period 1 January to 31 May 1980 made a loss, resulting in there being as on 31 May 1980 a net sum of $113,271.42 due from the defendant to the plaintiffs. The other main heads of claim is for a sum of $779,340.35, being the balance amount due to the plaintiffs for goods sold and delivered to the defendant and for commissions and other charges. The plaintiffs rely on the accounts as set out in certain balance sheets which were signed by the parties.

13 The defendant denies that the partnership business in rubber and latex suffered any loss. The defendant says that if the accounts and primary documents/books are looked into, it will be discovered that the partnership ventures actually made a profit. The defendant also says that the balance sheets are not correct and were deliberately drawn to show artificial balances in favour of the plaintiffs. As stated above, the defendant alleges that there was an agreement between the parties not to rely on the balance sheets and, except for certain specifically admitted goods, the defendant says that no goods were actually sold and delivered by the plaintiffs to him. In fact for the two balance sheets dated 2 June 1980, the defendant had specifically qualified the accounts by stating that they were `subject to verification`.

14 Differences arose between the parties as to the kind of documents that should be discovered pursuant to the order of court of 20 January 1984. The defendant took the view that under the order and under general law, both parties were obliged to give discovery of all relevant documents in their control, custody etc, in so far as the same had a bearing on their business relationship between 1976 and 1980. The defendant said that every document, contract note, bank document, invoice (ie primary documents) which related to the trading transactions of the partnership or which would show whether a transaction was a partnership transaction or a transaction entered into by the plaintiffs on their own account would be relevant and should be produced.

15 The plaintiffs on the other hand felt that the primary documents were not discoverable though they did disclose in the first list of documents certain primary documents for the period January to June 1980 plus the correspondence between the solicitors for the parties and the balance sheets.

16 By the order of court of 31 August 1987 the plaintiffs were required to file a supplementary list. The supplementary list was filed on 25 September 1987 and therein the plaintiffs set out numerous primary documents for the years 1976 to 1980. The supplementary list also stated that certain documents could not now be traced and the plaintiffs did not know what have become of them.

17 Notwithstanding the further list, the defendant contended that the plaintiffs had not given full discovery. The defendant said that not only must the plaintiffs produce documents which showed that they had entered into various contracts, they must also produce documents to show whether those were partnership contracts or contracts entered into by the plaintiffs on their own account. The defendant claimed that throughout the material period there were partnership transactions and there were transactions which the plaintiffs entered into on their own account. This was not denied by the plaintiffs. It was important that these two categories of transactions be differentiated in order to arrive at the true state of accounts between the parties. Following further correspondence between the solicitors for the defendant and the plaintiffs, a second supplementary list and an affidavit were on 20 June 1989 filed by Mr NS Patel on behalf of the plaintiffs.

18 Nevertheless, on 23 August 1988, the defendant`s solicitors wrote to the plaintiffs` solicitors stating that the discovery was not complete. This was because the documents actually disclosed by the plaintiffs referred to other important documents which would help verify the defendant`s defence. The defendant`s solicitors in that letter identified the following 15 categories of primary documents which should have been produced:

19 Item 1: Documents in plaintiffs` possession

20 Item 2: Documents of Manilal & Sons (M) Sdn Bhd

21 The plaintiffs were also requested by the defendant to produce the said documents without delay and to take out an application to extend time for compliance with the order of court of 31 August 1987.

22 In their reply of 26 August 1988, the plaintiffs` solicitors explained that the problem was `there are such a volume of documents which are in the nature of supporting or ancillary documents that it is almost impossible to list every single one`. Having said that, the letter went on to state:

23 Further correspondence took place between the solicitors of the parties. In the letter of 5 September 1988, the plaintiffs` solicitors stated that:

24 Then came the very crucial letter of 6 September 1988 of the plaintiffs` solicitors and I think I ought to set it out in full:

25 On 12 September 1988, the plaintiffs` solicitors wrote to say that Manilal & Sons (M) Sdn Bhd had lodged the following documents for the defendant`s inspection:

26 However, with regard to the other items listed in the defendant`s solicitor`s letter of 23 August 1988, the plaintiffs` solicitors stated that `we have instructions to inform you that our clients do not have the original of such documents in their possession`.

27 By a letter dated 16 September 1988, the defendant`s solicitors gave reasons why they thought the documents requested must have existed and were in the possession of the plaintiffs. The plaintiffs were given until 19 September 1988 to comply. It would appear that this letter of 16 September 1988 was received by the plaintiffs` solicitors on that day at 10.45am. As Mr Anand Karthigesu, who was in charge of the matter, was going on leave on 17 September 1988, he was not able to attend to it. Mr M Karthigesu had sight of the letter only on the morning of 19 September 1988 and thus asked for more time for compliance. It was only at 3pm on 26 September 1988 that Mr M Karthigesu, together with the plaintiffs` auditors, saw their clients.

28 In the meantime, and as stated above, the present application to strike out the action of the plaintiffs for non-compliance with the order of court of 31 August 1987 was taken out on 21 September 1988.

29 Response of the plaintiffs to the application

30 In an affidavit filed on 4 October 1988 by Mr NS Patel to resist the application, the plaintiffs explained:

31 Mr Patel also went on in that affidavit to state that:

32 The plaintiffs said that the partnership to trade in rubber and latex was formed because the defendant and the plaintiffs complemented each other. The defendant had the expertise and the plaintiffs the finance. It was the defendant who was responsible for putting together a transaction from beginning to end, covering negotiations, procuring supplies, making foreign exchange contracts, arranging shipment and attending to claims. When the defendant had put through a transaction he would present to the plaintiffs a complete set of documents with his endorsement on the first page signifying that he had checked and approved the documentation. The plaintiffs would then sign and forward the documents to the bank for finance to be provided.

33 The plaintiffs further clarified that prior to the formation of the partnership, the defendant`s own business and contracts in rubber and latex were with `main ports`, ie United Kingdom, Untied States and Europe. The partnership business was carried on on the same basis. The defendant would enter into a contract with a local supplier to purchase rubber for shipment to a a main port`. Although the contracts were invariably in the name of and signed by the plaintiffs, the plaintiffs said they never retained the contracts or copies thereof. However, the plaintiffs did admit that they had on their own account transacted a small volume of business in rubber and latex with `odd ports`, ie Middle East, Africa, Canada and South America. This, according to the plaintiffs, was how partnership contracts in rubber and latex were differentiated from the similar business transacted by the plaintiffs on their own account.

34 In the affidavit of 4 October 1988, Mr NS Patel gave these answers (and these are very much the same answers as conveyed in the plaintiffs` solicitors` letter of 6 September 1988) to the eight categories of documents which the defendant`s solicitors requested under item I in their letter of 23 August 1988:

35 On `rubber hedging contracts`, Mr Patel also admitted in his affidavit that the plaintiffs did on their own account enter into rubber hedging contracts but had exclusively used Lewis & Peat for this purpose. To his knowledge, the plaintiffs had not, in relation to the plaintiffs` own account, entered into rubber hedging contracts with brokers such as Bee Rubber Co Pte Ltd, Hock Tong Rubber Brokers Pte Ltd, Malaysia Brokers Pte Ltd and Union Rubber Broker (Pte) Ltd. Mr Patel said that the rubber hedging contracts which the defendant entered into for the partnership were concluded in a similar manner as for the purchase and sale of physical rubber and latex described above.

36 At this juncture I ought to observe that the plaintiffs have not, prior to the date of hearing before me, denied that the eight categories of documents requested by the defendant are relevant.

37 Oral examination of the plaintiffs` deponent

38 For the purpose of determining the application before rae both parties agreed that Mr Patel be cross-examined on the facts deposed to in his affidavits, particularly that of 4 October 1988. He was also re-examined by the plaintiffs` own counsel. The position that emerges from the oral examination with regard to the eight categories of document is as follows:

39 The plaintiffs concede that while the plaintiffs have produced the purchase bills relating to the partnership business, the plaintiffs have not produced purchase bills which the plaintiffs allege relate to the plaintiffs` own business. However, the plaintiffs indicated that they are prepared to produce the same to the defendant`s solicitors and auditors. Mr Patel admitted that if the purchase bills were produced, they would show whether a particular transaction was FOB, transshipment or local sales and whether the sales were to the defendant. He also agreed that based on the purchase bills, the defendant would be able to distinguish between partnership transactions and those which are not.

40 Mr Patel confirmed what he stated in his affidavit that the partnership business in rubber and latex was with main ports, ie Europe and the United States. The plaintiffs` own business in rubber and latex was with odd ports and the quantity was not significant. He said that that was the basis upon which he differentiated whether a transaction was that of the partnership or that of the plaintiffs` own. Mr Patel admitted that the documents relating to the plaintiffs` own business have not been disclosed because they have nothing to do with the partnership business and the plaintiffs would be prepared to disclose them if ordered by the court.

41 However, in cross-examination it was shown by counsel for the defendant that this distinction is not really valid because two shipments to odd ports had been reflected as partnership accounts. During re-examination, Mr Patel tried to explain the discrepancy by saying that though rubber was shipped to odd ports, the transactions were nevertheless partnership business because the contracts were negotiated in London and were treated as main-port contracts. But even on this basis it has been shown that there is no consistency.

42 In respect of partnership business, Mr Patel claimed that the foreign exchange contracts were negotiated by the defendant. He said that the originals of all foreign exchange contracts were signed by him and returned to the bank. The duplicates were kept by the defendant. He said the defendant monitored the foreign exchange requirement. When confronted with some documents (A77A to F), Mr Patel was not able to explain why in those instances someone else was monitoring the situation. Mr Patel was also unable to explain satisfactorily why he possessed the foreign exchange contracts (duplicate) of 1978 and not the other years. Mr Patel claimed that separate foreign exchange contracts were negotiated in respect of the plaintiffs` own business. There was no mixing of the two kinds of foreign exchange contracts. Mr Patel admitted that the foreign exchange contracts relating to the plaintiffs` own business have not been produced as they are irrelevant; but the plaintffs would produce them if ordered by the court. Mr Patel agreed that if he produced all foreign exchange contract files, the defendant`s auditors could show which foreign exchange contract was set off against which rubber and latex transaction.

43 The defendant is not pursuing this particular item.

44 Mr Patel initially said, as he has done in his affidavit, that the plaintiffs bought and sold FOB. After being shown documents on stocks, he admitted that non-FOB transactions were done though not frequently. B60, B61 and B62 show the stock position of commodities of the plaintiffs as at the end of December 1978, 1979 and 1980 respectively. A37, A38 and A39 also show stock balances as on 1 January 1977, 1978 and 1979 respectively. The following questions and answers are pertinent:

45 Later Patel explained:

46 Then Patel clarified: `Maybe they were written on a paper or exercise book.` As the amounts shown on the documents run into hundreds of thousands and even millions of dollars, it is hard to believe that those accounts shown in B60, B61 and B62 and A37, A38 and A39 could be drawn up without proper supporting documents, ie stock books. Even the quantities shown in PB77 (Vol I) are also large. Mr Patel admitted having stored cocoa and some insignificant amount of other goods with Yew Lian (Pte) Ltd.

47 Mr Patel tried to explain that the above documents (ie B60, B61, B62, A37, A38 and A39) could refer to goods in transit. If that were so there must be records maintained of goods in transit; otherwise how could the auditors check whether the balances shown in B60, B61, B62, A37, A38 and A39 were correct. But there was no goods-in-transit record. Mr Patel agreed that if he produced the stock books, he could tell whether a particular lot of goods was sold to the defendant or to someone else.

48 The plaintiffs assert that they themselves did not engage in local sales of rubber and latex (A79). When confronted with A81 and A82, Mr Patel admitted that the plaintiffs themselves (apart from partnership business) did engage in local sales of rubber and that there must be in existence local bill files.

49 In this connection, I must refer to an exchange of correspondence between the solicitors for the two parties. On 5 October 1988, the defendant`s solicitors wrote to the plaintiffs` solicitors spelling out clearly what the defendant wanted under this category:

50 On 6 October 1988, the plaintiffs` solicitors replied, inter alia:

51 This reply which the plaintiffs instructed their solicitors to give is clearly false.

52 Very little was raised in cross-examination relating to these files. PB65 (Vol II) shows that claims had been paid. What the defendant wants are the basic documents as shown in A1 to A8, supporting each and every one of those payments. The plaintiffs said that the files are not in their possession.

53 Mr Patel admitted that the plaintiffs have not disclosed rubber hedging contracts relating to the plaintiffs` own business; however, if ordered, the plaintiffs would produce those contracts.

54 Mr Patel said that the plaintiffs` own transactions could be distinguished from those of the partnership by the name of the broker. He said that the plaintiffs only dealt with Peat & Lewis. Two settlement statements of Union Rubber Brokers (Pte) Ltd were produced to Mr Patel by counsel for the defendant and they show that two accounts were maintained by the plaintiffs with Union Rubber Brokers (Pte) Ltd. Mr Patel denied the suggestion of Mr Shanmugam that one account was for the plaintiffs` own account and the other was for the partnership. In re-examination, Mr Patel explained that both accounts were for the partnership, one for speculation and the other for hedging. The questions and answers in this regard are pertinent:

55 All I wish to comment is that the distinction between the two is rather fine.

56 Law

57 I will now turn to deal with the law. Under a general order of court for discovery, a party is obliged to make discovery of all documents relevant to the matters in question in the action. What are the matters in question would depend on the pleadings. A document relates to the matter in question in the action if it contains information which may - not which must - either directly or indirectly enable the party requiring the discovery either to advance his own case or to damage the case of his adversary or which may fairly lead to a train of inquiry which may have either of those two consequences: see Compagnie Financiers et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 at p 62. Documents relate to matters in question in the action so long as they are likely to throw light on the case: see Merchants` & Manufacturers` Insurance Co Ltd v Davies [1838] 1 KB 196 at p 210.

58 Rule 16(1) of the RSC gives the court a general power to enforce compliance with the requirements of the rules or orders for discovery, inspection and production of documents. If any party who is required by the Rules of the Supreme Court 1970 or by any order made under them, to make discovery of documents or to produce any documents for the purpose of inspection or any other purpose, fails to comply with any provision of the rules or with that order, the court may make such order as it thinks just, including in particular an order that the action be dismissed or an order that the defence be struck out and judgment entered accordingly.

59 13 Halsbury`s Laws of England (4th Ed) at para 34 further elaborates on this point as follows:

60 In Danvillier v Myers (1833) 1 WN 58 the plaintiff was required by an order of court to produce certain books. They were not produced on the expiry of the specified date. Accordingly, a summons was taken out by the defendant to dismiss the action. The plaintiff produced some books with an affidavit intended to show that they were the books referred to. Chitty J, considering that the affidavit was insufficient and that the plaintiff was wilfully withholding information, dismissed the action. On appeal the appeal court held that as `fair discovery had not been made and that the plaintiff was keeping back documents which he ought to discover` the appeal had to be dismissed. It should be noted that the failure to comply in Danvillier did not even relate to an `unless` order.

61 The effect of an `unless` order is explained in these terms in para 24/16/1 of The Supreme Court Practice 1988 :

62 Scope of `unless` order of 31 August 1987

63 At the hearing of the defendant`s application that the plaintiffs furnished a further and better list of documents the arguments centred on whether the defendant was entitled to the production by the plaintiffs of the primary accounting documents. The plaintiffs appeared to be prepared only to disclose the primary accounting documents relating to the June 1980 balance sheets which the defendant had qualified but not the primary accounting documents of carlier years. In the then submission of the defendant, the cases Compagnie Financiers et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 and Kent Coal Concessions v Duguid [1910] 1 KB 904 were referred to. Notwithstanding the arguments of the plaintiffs that their claims were in fact based on an account stated (except in respect of the balance sheets which the defendant qualified), the court granted the application of the defendant. The court ordered that the plaintiffs `do comply with the order of court dated 20 January 1984 by filing a further list of documents ... by 28 September 1987`. It is clearly implicit in this order of 31 August 1987 that the court was not satisfied that the plaintiffs had made full and fair discovery in their list of 27 August 1987; thus the necessity for that order.

64 Findings

65 In the light of the oral examination of Mr Patel, it is clear, on Mr Patel`s own admission, that the plaintiffs have not disclosed the documents listed under categories (a), (b), (c), (f) and (h) mentioned above, in so far as those documents relate to what the plaintiffs allege to be their own business. In the letters exchanged between the parties prior to the hearing before me, the plaintiffs have never claimed that the documents bave not been disclosed because they do not relate to the partnership transactions. The plaintiffs` answers have been either that the documents are not in the possession of the plaintiffs and/or that they are in the possession of the defendant. Now in relation to category (a) documents, what the defendant has asked for also include local purchase contract files in respect of general goods. How could they be with the defendant? Further, the correspondence relating to category (f) documents shows quite clearly the kind of stand taken by the plaintiffs. Even after the defendant had pointed out clearly what he wanted (through his solicitors` letter of 5 October 1988), the plaintiffs` reply, as late as 6 October 1988, was that they did not themselves engage in local sales of rubber and latex, and not that such documents were irrelevant to the case.

66 As regards category (h) documents, I see that what the defendant asked for in his solicitor`s letter of 23 August 1988 is `rubber hedging contracts which plaintiffs eniered into with all brokers between 1976-1980`. The answer of the plaintiffs is `Not in the possession of the plaintiffs. In fact in the possession of the defendant.` Now Mr Patel admitted that the plaintiffs have not disclosed rubber hedging contracts relating to the plaintiffs`own business. In this connection I would add that as carly as 11 May 1982, the defendant in an affidavit filed herein on that date stated that the partnership between the plaintiffs and the defendant was limited to physical rubber trading and did not include paper transactions. The defendant further elaborated:

67 In view of this, and noting that the letter of 23 August 1988 has made the position quite plain, I am of the opinion that there is clearly withholding of category (h) documents on the part of the plaintiffs.

68 As I have stated above, what documents a party is obliged to disclose would depend on the facts and the issues raised in the pleadings. And having regard to the pleadings and the affidavits filed herein, there is quite clearly a dispute as to the terms of the partnership arrangements and also a dispute on which transactions are partnership transactions and which are not. In these circumstances the documents, allegedly relating to the plaintiffs` own business, are in issue and should be disclosed. After all, every transaction in rubber and latex was entered into in the name of the plaintiffs, irrespective of whether that transaction was for partnership account or for the plaintiffs` own account. In any event, and as mentioned earlier, irrelevancy has never been raised by the plaintiffs for failing to disclose until the hearing before me. Similarly, the need to impose conditions for disclosure has also never been mentioned before.

69 Even giving the plaintiffs the maximum benefit tha there just might be that possibility that they were really mistaken and were under the erroneous impression that they need not disclose the documents relating to their own transactions, there cannot be any doubt, for the reasons mentioned above, as regards categories (a), (f) and (h) documents.

70 There remains one other category of documents - category (e). I am unable to accept the evidence of Mr Patel that there was no stock books/accounts. As stated above, the documents identified by the defendant have shown the existence of stocks. Even in the plaintiffs` reply and defence to counterclaim, there are the items `PSA duties` and `forwarding charges`. I find it hard to believe that the stock record could have been written on scraps of paper and thrown away. The plaintiffs were in big business. Everything seems to indicate that they have a proper system of recording. He also said they could be written on exercise books: then where are the exercise books? On the authority of Kent Coal Concessions ,they should be produced or an account given. Instead of giving a truthful account, the plaintiffs said that they did not have stock books/records as they `bought and sold FOB`.

71 Under the order of 31 August 1987, the plaintiffs must make full discovery. I cannot accept the suggestion of counsel for the plaintiffs that just because the order for discovery is of a general character, the duty of the plaintiffs to disclose all relevant documents is in any way lessened. Whether a document is explicitly identified in the order is quite immaterial. The crucial factor is relevancy and this point was never raised by the plaintiffs until the hearing before me. Though the plaintiffs have filed two supplementary lists pursuant to the order, for the reasons; I have given above, the plaintiffs have not made the necessary full and fair discovery, particularly as regards the documents in categories (a), (e), (f) and (h). Thus there is non-compliance with the order. If this omission had not been deliberate, then I find that it arose out of gross negligence on the part of the plaintiffs such as to amount to wilfulness.

72 Counsel for the defendant has taken pains to impress upon this court that nothing in his criticism of the plaintiffs should be taken as criticism of the plaintifrs solicitors, who had undoubtedly prepared the lists and the affidavits on the instructions of clients. I share the sentiments of the defendant`s counsel that the plaintiffs` solicitors were not at fault.

73 In the result, I hold that there has been non-compliance with the order of 31 August 1987 and by virtue of the terms of that order, I declare that the action of the plaintiffs be dismissed. The plaintiffs shag bear the costs of this application.

74 Defendant`s application allowed