Case Details
- Citation: [2022] SGHC 218
- Title: DMX Technologies Group Ltd (in liquidation) v Deloitte & Touche LLP (George, Richard John Weir and another, non-parties)
- Court: High Court of the Republic of Singapore (General Division)
- Date of decision: 14 September 2022
- Judges: Goh Yihan JC
- Hearing date: 5 September 2022
- Proceedings: Registrar’s Appeal No 254 of 2022 (rehearing)
- Underlying suit: Suit No 920 of 2017
- Plaintiff/Applicant (in appeal): DMX Technologies Group Ltd (in liquidation) (respondent in the appeal)
- Defendant/Respondent (in appeal): Deloitte & Touche LLP
- Appellants / Non-parties: (1) Richard John Weir George; (2) Tse, Fung Chun
- Legal area: Civil Procedure — Service (service out of jurisdiction; non-party discovery)
- Key procedural instruments: Summons 2153 and Summons 2154 (applications to set aside service orders); First Leave Application and First Service Order (against Mr George); Second Leave Application and Second Service Order (against Ms Tse)
- Statutes referenced: Rules of Court (2014 Rev Ed) (“ROC 2014”), in particular O 11 r 8
- Cases cited: Burgundy Global Exploration Corp v Transocean Offshore International Ventures Ltd and another appeal [2014] 3 SLR 381 (“Burgundy”); [2022] SGCA 27 (also cited in the judgment)
- Judgment length: 36 pages, 10,661 words
Summary
In DMX Technologies Group Ltd (in liquidation) v Deloitte & Touche LLP ([2022] SGHC 218), the High Court considered two related but distinct procedural challenges arising from non-party discovery applications served out of Singapore. The non-parties, who were Deloitte partners in Hong Kong, appealed against an Assistant Registrar’s decision not to set aside orders granting leave to serve the discovery applications on them in Hong Kong.
The Court allowed the appeal in part. It set aside the first service order (against Mr Richard John Weir George) on the basis that the respondent failed to make full and frank disclosure of a material fact in the ex parte leave application. However, the Court dismissed the appeal in respect of the second service order (against Ms Tse), holding that the applicable legal test for leave to serve out of jurisdiction on a non-party was not met for setting aside only in the first instance, and that the close connection test derived from Burgundy governed the analysis for both non-parties. The Court’s key contribution lies in clarifying the test to be applied under O 11 r 8 of the ROC 2014 for service out of jurisdiction on non-parties.
What Were the Facts of This Case?
The respondent, DMX Technologies Group Ltd (in liquidation) (“DMX”), is a Bermuda-incorporated company that brought an underlying suit in Singapore against Deloitte & Touche LLP (“Deloitte SG”). The claim alleged that Deloitte SG, as appointed auditor for DMX and its subsidiaries for the financial years 2011 to 2013 (the “Relevant Audit Years”), acted in breach of duties owed to DMX in contract and in tort. The alleged breaches related to the planning, preparation, and/or conduct of the audit of DMX’s consolidated financial statements and/or the making of the subsequent audit report.
Two Deloitte partners in Hong Kong were not parties to the underlying suit but were targeted by DMX’s non-party discovery applications. The first non-party, Mr Richard John Weir George (“Mr George”), was a partner in Deloitte Touche Tohmatsu (“Deloitte HK”) and held a leadership role as Reputation and Risk Leader of Deloitte China, with duties including overseeing quality and risk management across Deloitte China’s multi-disciplinary practice. The second non-party, Ms Tse Fung Chun (“Ms Tse”), was also a partner in Deloitte HK and was the audit partner having overall responsibility for the conduct of the audit for the financial year 2011.
DMX commenced the underlying suit in October 2017. In June 2021, DMX sought non-party discovery against Mr George. The discovery application sought 13 categories of documents (the “Documents”), largely comprising audit working papers relating to the work done in the audit, which DMX asserted were relevant to the issues in its claims against Deloitte SG. DMX’s position was that, because Mr George was a partner in Deloitte HK, the Documents were in his possession, custody, or power.
DMX then applied ex parte for leave to serve the non-party discovery application and relevant papers out of jurisdiction on Mr George in Hong Kong. The High Court granted leave on 29 June 2021 (the “First Service Order”). After service, Mr George filed a reply affidavit stating that he was not involved in the audit. DMX subsequently explained that it had believed that the partners with overall responsibility for the audit in the Relevant Audit Years—Mr Martin Hills and Ms Tse—were no longer partners of Deloitte HK, and therefore DMX could not pursue them. DMX chose Mr George instead because he remained a partner of Deloitte HK.
It later emerged that Ms Tse was still a partner of Deloitte HK. Rather than withdrawing the discovery application against Mr George, DMX commenced a second non-party discovery application against Ms Tse. DMX again sought leave to serve out of jurisdiction, and the High Court granted this on an ex parte basis on 1 April 2022 (the “Second Service Order”).
On 9 June 2022, the non-parties filed Summons 2153 and Summons 2154 to set aside the First Service Order and the Second Service Order respectively. The Assistant Registrar dismissed both applications. The non-parties appealed to the High Court, raising two issues: (1) whether the First Service Order should be set aside for non-disclosure of a material fact; and (2) whether both service orders should be set aside because the applicable legal test for leave to serve out of jurisdiction on a non-party was not met.
What Were the Key Legal Issues?
The first legal issue concerned only Mr George. It asked whether the First Service Order should be set aside because DMX failed to make full and frank disclosure of all material facts in the First Leave Application. The specific alleged non-disclosure was that Mr George was not involved at all in the audit, a fact that DMX did not disclose when seeking ex parte leave.
The second legal issue applied to both Mr George and Ms Tse. It asked whether the service orders should be set aside on the ground that the applicable legal test for leave to serve out of jurisdiction on a non-party under O 11 r 8 of the ROC 2014 was not satisfied. In particular, the parties disputed what test should be used: whether the “close connection test” from Burgundy governed, and if so, how it should be applied to non-party discovery served out of jurisdiction.
The Court noted that the second issue raised an “unexplored question” on the applicable test for leave to serve a summons on a non-party out of jurisdiction under O 11 r 8. This gave the decision its broader procedural significance beyond the immediate dispute.
How Did the Court Analyse the Issues?
(1) Non-disclosure and the First Service Order (Mr George)
The Court approached the non-disclosure issue by focusing on two questions: whether the undisclosed fact was “material”, and whether the Court should exercise its discretion to set aside the service order given the nature and effect of the non-disclosure. The parties agreed that the fact of Mr George’s non-involvement in the audit was not disclosed in the First Leave Application. The dispute was therefore about legal consequences.
Mr George argued that his lack of involvement was material because the court deciding whether to grant leave to serve out of jurisdiction would consider the recipient’s connection to the underlying claim. If the recipient had no involvement in the audit, that would bear directly on whether the discovery sought was plausibly relevant and whether the court should grant the exceptional ex parte relief. In other words, the non-disclosure went to the factual basis for the court’s assessment of whether the non-party was an appropriate target for discovery.
DMX contended that although the fact was material, the non-disclosure was not intended to mislead the court. The Assistant Registrar had accepted that the non-disclosure was material but did not treat the absence of an intention to mislead as determinative. On rehearing, the High Court disagreed with the conclusion that the service order should stand.
The Court held that the non-disclosure was of a material fact. The reasoning reflects a strict approach to ex parte applications: where leave is granted without inter partes argument, the applicant bears a heightened duty of candour. Even if the non-disclosure was not deliberate in the sense of an intention to deceive, the court’s decision-making process is undermined when material facts are withheld. The Court therefore exercised its discretion to set aside the First Service Order.
(2) The test for service out of jurisdiction on non-parties (both non-parties)
The second issue required the Court to determine the correct legal test for leave to serve out of jurisdiction on a non-party under O 11 r 8 of the ROC 2014. The Assistant Registrar had declined to apply the Burgundy close connection test on the basis that it was confined to the factual situation in Burgundy. The non-parties argued that the close connection test should apply, while DMX supported the Assistant Registrar’s approach.
The High Court treated this as an important clarification. It held that the applicable test was indeed the close connection test, and that it was not limited to the specific factual matrix in Burgundy. The Court examined the Court of Appeal’s formulation of the close connection test in Burgundy, and emphasised that the Court of Appeal intended to lay down a test of general application for the relevant service-out context. The Court also considered consistency with approaches in other jurisdictions, reinforcing that the close connection test is a principled and workable framework for determining whether Singapore courts should assume jurisdiction in service-out scenarios.
Crucially, the Court rejected the idea that the applicable test should be derived from the grounds in O 11 r 1 (which relate to service out of jurisdiction in other contexts). Instead, it focused on O 11 r 8’s specific procedural setting—service of summonses on non-parties—and applied the close connection test as the governing standard.
Application to the present case
Applying the close connection test, the Court concluded that only the First Service Order (against Mr George) should be set aside for failure to meet the close connection test. This outcome is consistent with the Court’s earlier finding on non-disclosure: the First Leave Application was defective because it omitted a material fact undermining the basis for the court’s leave decision. By contrast, for Ms Tse, the Court was satisfied that the close connection test was met such that the Second Service Order should not be set aside.
While the truncated extract does not reproduce the full evidential analysis, the structure of the judgment indicates that the Court distinguished between the non-parties based on their connection to the audit and the plausibility that the discovery sought would be relevant and obtainable from them. Ms Tse’s role as the audit partner with overall responsibility for the conduct of the audit for 2011 provided a stronger factual nexus to the audit working papers sought. Mr George’s claimed non-involvement, coupled with the non-disclosure, weakened the connection and justified setting aside the First Service Order.
What Was the Outcome?
The High Court allowed the appeal in relation to Summons 2153 (the application to set aside the First Service Order against Mr George). The First Service Order was set aside because DMX failed to make full and frank disclosure of a material fact in the ex parte First Leave Application.
However, the Court dismissed the appeal in relation to Summons 2154 (the application to set aside the Second Service Order against Ms Tse). The Second Service Order therefore remained in force, meaning DMX could proceed with non-party discovery served on Ms Tse in Hong Kong under the existing leave granted.
Why Does This Case Matter?
This decision is significant for practitioners because it clarifies the procedural framework for service out of jurisdiction on non-parties under O 11 r 8 of the ROC 2014. By holding that the Burgundy close connection test is of general application and is the appropriate test for the relevant service-out context, the Court provides a clear analytical pathway for future applications seeking leave to serve non-party discovery summonses abroad.
Equally important is the Court’s strict approach to ex parte candour. The case illustrates that non-disclosure of a material fact can lead to the setting aside of service orders even where the applicant argues that the non-disclosure was not intended to mislead. For litigators, this reinforces the need for careful factual verification before seeking ex parte leave, particularly where the relief is exceptional and the court’s decision is made without the benefit of adversarial testing.
From a practical standpoint, the judgment also demonstrates how courts may distinguish between non-parties based on their actual connection to the underlying dispute and the likely relevance of the requested documents. In audit-related disputes, where discovery often targets working papers and internal materials, the identity and role of the proposed non-party can be decisive for both the close connection analysis and the candour expected in ex parte applications.
Legislation Referenced
- Rules of Court (2014 Rev Ed) (“ROC 2014”), O 11 r 8
- Rules of Court (2014 Rev Ed) (“ROC 2014”), O 11 r 1 (discussed as a contrast, but not treated as the governing test for O 11 r 8 in this context)
Cases Cited
- Burgundy Global Exploration Corp v Transocean Offshore International Ventures Ltd and another appeal [2014] 3 SLR 381
- [2022] SGCA 27
- [2022] SGHC 218 (this case)
Source Documents
This article analyses [2022] SGHC 218 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.