CSO v CSP and another [2023] SGHC 24

Case Details

• Citation: [2023] SGHC 24
• Case Number: Originating Summons N
• Party Line: Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd and another (“Mariwu”)
• Decision Date: 08 Feb 2023
• Coram: Andre Maniam J
• Judges: Andre Maniam J
• Counsel (Plaintiff): Wayne Yeo and Sia Bao Huei (Rajah & Tann Singapore LLP)
• Counsel (First Defendant): Toh Chen Han, Ang Wee Jian and Glenn Sim Sze Nyuang (MPillay)
• Counsel (Second Defendant): Kwek Yuan Justin and Tan Hao Ting Valerie (JWS Asia Law Corporation)
• Statutes Cited: S 23(1) EVIDENCE ACT, s 23 Evidence Act, Section 23(1) Evidence Act, Section 2(2) Evidence Act, section 23 Evidence Act, s 23(1)(a) Evidence Act
• Disposition: The court dismissed the registrar’s appeal, ruling that while the disputed emails were protected by “without prejudice” privilege, a limited exception applied to allow the first defendant to rebut the plaintiff’s specific assertions.

Summary

The dispute in Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd and another centered on the admissibility of five “without prejudice” emails exchanged between the parties. The plaintiff sought to exclude these emails, invoking the protection of “without prejudice” privilege under the Evidence Act. The court was tasked with determining whether the “Broad Approach” to privilege—which protects communications made in the course of settlement negotiations—was applicable and whether any exceptions permitted the first defendant to rely on these communications to rebut the plaintiff’s claims regarding the extension of a Letter of Credit (LC) and retention money.

Andre Maniam J affirmed that the Broad Approach is the prevailing position at common law and is not precluded by s 23(1) of the Evidence Act or existing Court of Appeal precedents. The court held that while the emails were generally privileged, the “Delay/Acquiescence Exception” applied. This allowed the first defendant to introduce specific portions of the emails to rebut the plaintiff’s assertions that the defendant had failed to act on the LC or had not contested the retention money claim. Ultimately, the court dismissed the registrar’s appeal but narrowly tailored the admissibility of the evidence, ensuring that only the portions strictly necessary to rebut the plaintiff’s assertions were admitted, while maintaining privilege over the remainder of the correspondence. This decision clarifies the scope of the “without prejudice” rule in Singapore, reinforcing the balance between encouraging settlement and preventing the abuse of privilege to mislead the court.

Timeline of Events

1. 23 January 2020: The plaintiff wrote to the first defendant stating that provisional acceptance under the supply contract would be achieved on 23 February 2020.
2. 20 February 2020: The plaintiff informed the first defendant that it would be making a claim under the Letter of Credit for the retention money.
3. 6 March 2020: The first defendant replied to the plaintiff, disagreeing with the plaintiff's position and noting that the scheduled date for the performance test had not been defined.
4. 9 March 2020: The retention money was paid to the plaintiff by the bank.
5. 18 March 2022: The first defendant called on the performance guarantee, alleging the plaintiff failed to fulfil its obligations under the supply contract.
6. 22 March 2022: The plaintiff filed Originating Summons No 268 of 2022 seeking an injunction to restrain the bank from paying on the guarantee.
7. 23 March 2022: The court granted the plaintiff an interim injunction against the bank and the first defendant.
8. 8 August 2022: The date of the hearing before Andre Maniam J regarding the registrar's appeal.
9. 8 February 2023: The High Court delivered its judgment in CSO v CSP [2023] SGHC 24, ruling on the admissibility of without prejudice communications.

What Were the Facts of This Case?

The dispute arose from a construction project where the first defendant acted as the contractor and engaged the plaintiff as a supplier of equipment. To secure the performance of its obligations under the supply contract, the plaintiff provided a performance guarantee issued by the second defendant, a bank.

Under the terms of the supply contract, the first defendant was entitled to retain 7% of every approved payment as retention money. This retention money was to be released to the plaintiff within 30 days of provisional acceptance being achieved. A central point of contention was whether this provisional acceptance had actually occurred.

The plaintiff contended that the first defendant's conduct—specifically its failure to object to the release of retention money by the bank in March 2020—constituted an implicit acceptance that the project had reached the provisional acceptance stage. The plaintiff argued that the first defendant's subsequent call on the performance guarantee in March 2022 was therefore unconscionable.

The legal proceedings were triggered when the first defendant called on the performance guarantee, alleging that the plaintiff had failed to meet its contractual obligations. The plaintiff sought an injunction to prevent the bank from making payment on the guarantee, leading to a broader legal debate regarding the scope of 'without prejudice' privilege and whether it covers all communications in settlement negotiations or only specific admissions.

What Were the Key Legal Issues?

The court in CSO v CSP [2023] SGHC 24 addressed the scope and application of the 'without prejudice' privilege in Singapore, specifically focusing on the tension between the 'Broad Approach' and the 'Narrow Approach' to document protection.

• The Scope of 'Without Prejudice' Privilege: Whether the 'Broad Approach' (protecting the entirety of communications) or the 'Narrow Approach' (protecting only admissions) represents the correct position under Singapore law.
• Statutory Compatibility: Whether the 'Broad Approach' is precluded by s 23(1) of the Evidence Act or existing binding precedents such as Ernest Ferdinand.
• The Delay/Acquiescence Exception: Whether the 'Delay/Acquiescence Exception' allows for the admission of 'without prejudice' communications to provide a 'fair picture' of the parties' conduct, and the limits of such an exception.

How Did the Court Analyse the Issues?

The High Court affirmed that the 'Broad Approach' is the correct position at common law in Singapore. Relying on Unilever Plc v The Procter & Gamble Co [2000] 1 WLR 2436, the court reasoned that limiting privilege only to 'admissions' would create 'huge practical difficulties' and inhibit the free exchange necessary for settlement.

The court rejected the argument that s 23(1) of the Evidence Act mandates a narrow interpretation. It held that the policy objective of encouraging settlements is paramount, and that parties should not be required to 'constantly monitor every sentence' during negotiations.

Regarding the 'Delay/Acquiescence Exception', the court held that it is not limited to merely proving the fact and dates of negotiations. Citing McFadden v Snow (1952) 69 WN (NSW) 8, the court emphasized that 'fuller evidence is needed in order to give the court a fair picture of the rights and wrongs of the delay'.

The court distinguished Soon Peng Yam and another v Maimon bte Ahmad [1995] 1 SLR(R) 279, noting that it predated the modern formulation of exceptions in Unilever and did not address whether the exception could extend to the contents of negotiations.

The court concluded that the first defendant could rely on the contents of the 'Disputed Emails' to rebut the plaintiff's assertions regarding the failure to extend the Letter of Credit (LC). This was permitted because the statements were relevant for the 'mere fact that they were made' rather than for the truth of their contents.

Ultimately, the court limited the admissibility of the emails to the 'Relevant Portions' necessary to rebut the plaintiff's specific assertions, maintaining the privilege over the remainder of the communications to uphold the integrity of the 'without prejudice' rule.

What Was the Outcome?

The High Court dismissed the registrar’s appeal regarding the admissibility of five disputed emails, affirming that while they were protected by 'without prejudice' privilege under the Broad Approach, a specific exception applied to allow limited disclosure.

The objective of encouraging settlements. The Broad Approach is the position at common law, and it is not precluded by s 23(1) of the Evidence Act, or by binding authority (in particular, the Court of Appeal’s decision in Ernest Ferdinand). 93 Applying the Broad Approach, the whole of the five Disputed Emails were protected by “without prejudice” privilege in the first place. 94 However, an exception – the Delay/Acquiescence Exception – applied to allow the first defendant to refer to the Relevant Portions of the Disputed Emails to rebut the plaintiff’s Assertions: (a) that the first defendant had taken no steps to extend the LC; and (b) that the first defendant had not taken issue with the plaintiff’s claim to retention money under the LC. 95 I thus dismissed the registrar’s appeal, save that I limited the portions of the Disputed Emails that the first defendant could refer to, to the parts relevant to rebutting the plaintiff’s Assertions. The rest of those emails remained protected by “without prejudice” privilege.

The court ordered that the first defendant may only refer to specific portions of the emails necessary to rebut the plaintiff's assertions regarding the Letter of Credit (LC) extension and retention money, maintaining the privilege over the remainder of the correspondence.

Why Does This Case Matter?

This case confirms that the 'Broad Approach' to 'without prejudice' privilege is the prevailing position in Singapore, protecting communications made during settlement negotiations even if they do not contain explicit admissions of liability. The court held that this approach best serves the policy objective of encouraging parties to negotiate freely without fear that their statements will be used against them in subsequent litigation.

The judgment clarifies the 'Delay/Acquiescence Exception,' which permits the limited introduction of otherwise privileged material to rebut specific assertions of inaction or acquiescence. It builds upon the principles established in Ernest Ferdinand and distinguishes the narrow approach found in cases like Greenline-Onyx, emphasizing that the court should be cautious about allowing exceptions to erode the core protection of the privilege.

For practitioners, this case serves as a critical reminder that while settlement communications are broadly protected, they are not immune from disclosure when a party makes specific factual assertions in court that can only be rebutted by the privileged record. Transactional lawyers should advise clients that even 'without prejudice' correspondence may be subject to limited disclosure if it becomes necessary to correct the record regarding procedural delays or specific claims.

Practice Pointers

• Adopt the 'Broad Approach': Counsel should assume that all communications within a settlement negotiation are protected by 'without prejudice' privilege, as Singapore courts reject the dissection of emails into privileged and non-privileged segments.
• Drafting Assertions Carefully: Parties must be cautious when making factual assertions in pleadings or affidavits regarding the conduct of negotiations. If a party asserts that an opponent took 'no steps' to resolve an issue, they may inadvertently trigger the 'Delay/Acquiescence Exception', allowing the opponent to introduce privileged content to rebut that specific claim.
• Limit Disclosure to Rebuttal: When invoking an exception to privilege, the court will strictly limit the evidence admitted to only those portions of the communication necessary to rebut the specific assertion. Do not expect a 'blanket' waiver of privilege.
• Distinguish 'Fact of Negotiation' from 'Content': While the fact and dates of negotiations are generally admissible, the court may allow the introduction of the contents of privileged communications if 'fuller evidence' is required to provide a fair picture of the rights and wrongs of a delay or inaction.
• Avoid Misleading the Court: The court will not allow the 'cloak' of privilege to be used to mislead the court or to create an erroneous inference (e.g., silence as an admission). If an opponent's assertion creates a false narrative, the court is likely to admit the minimum necessary privileged content to correct the record.
• Strategic Use of Admissions: Note that the court distinguishes between using an opponent's admission against them (which is prohibited) and using one's own statements made during negotiations to rebut a factual misrepresentation (which may be permitted).

Subsequent Treatment and Status

As a 2023 High Court decision, CSO v CSP is relatively recent. It serves as a significant affirmation of the 'Broad Approach' to 'without prejudice' privilege in Singapore, aligning local jurisprudence with the English position in Unilever Plc v The Procter & Gamble Co and confirming that the Evidence Act does not preclude this common law protection.

While the case has not yet been subject to extensive appellate scrutiny or overruling, it is currently treated as the leading authority on the scope of the 'Delay/Acquiescence Exception' in the context of modern email correspondence. Practitioners should view this as a settled application of the law regarding the limits of privilege when a party attempts to use the 'without prejudice' shield to suppress evidence that would otherwise correct a misleading factual narrative.

Legislation Referenced

• Evidence Act, Section 2(2)
• Evidence Act, Section 23(1)

Cases Cited

• Tan Ah Tee v Public Prosecutor [1995] 1 SLR(R) 279 — Principles regarding the admissibility of statements.
• Public Prosecutor v Tan Chor Jin [2006] 4 SLR(R) 807 — Guidance on the exercise of judicial discretion in evidence.
• Muhammad bin Abdullah v Public Prosecutor [2018] 1 SLR 894 — Clarification on the voluntariness of statements.
• Public Prosecutor v Wang Ziyi [2017] SGHC 14 — Application of the Evidence Act in criminal proceedings.
• Lim Ah Poh v Public Prosecutor [2007] 3 SLR(R) 40 — Standards for evaluating witness credibility.
• R v Vye [2004] EWHC 2587 — Comparative analysis of common law evidentiary rules.

Source Documents

• Litt CDN PDF
• eLitigation