RB Investments Pte Ltd v Kardachi, Jason Aleksander and others [2023] SGHC 274

Sushant Shukla

Case Details

Citation: [2023] SGHC 274
Court: General Division of the High Court of the Republic of Singapore
Decision Date: 29 September 2023
Coram: Philip Jeyaretnam J
Case Number: Originating Application No 473 of 2023; Summons No 794/2023
Hearing Date(s): 4 July 2023
Claimant: RB Investments Pte Ltd (“RBI”)
Respondents: Jason Aleksander Kardachi (1st Respondent); Patrick Bance (2nd Respondent); Wong Shaw Mooi (3rd Respondent)
Counsel for Claimant: Vikram Nair, Foo Xian Fong, Liew Min Yi, Glenna and Ashwin Kumar Menon (Rajah & Tann Singapore LLP)
Counsel for Respondents: Yeo Alexander Lawrence, Han Tiong, Ee Jia Min, and Tan Yen Jee (Allen & Gledhill LLP) for the first and second respondents
Practice Areas: Evidence; Legal advice privilege; Insolvency and Bankruptcy

The decision in RB Investments Pte Ltd v Kardachi, Jason Aleksander and others [2023] SGHC 274 addresses the critical intersection between the statutory powers of private trustees in bankruptcy and the common law and statutory protections of legal advice privilege and confidentiality. The dispute arose within the context of the bankruptcy of Mr. Rajesh Bothra, where the appointed Private Trustees (the first and second respondents) sought to examine the corporate secretary of RB Investments Pte Ltd (“RBI”), Ms. Wong Shaw Mooi, under s 335(1) of the Insolvency, Restructuring and Dissolution Act 2018. In support of this examination, the Private Trustees filed an affidavit containing two email chains involving communications with the law firm Oon & Bazul LLP (“O&B”). RBI, the claimant, sought to expunge these email chains, asserting that they were protected by legal advice privilege and, alternatively, were subject to an equitable duty of confidence.

The High Court, presided over by Philip Jeyaretnam J, dismissed RBI’s application in its entirety. The court’s reasoning provides a significant clarification of the "authorised representative" doctrine in the context of corporate legal privilege. The court held that while the underlying communications between RBI’s director and its solicitors might have initially attracted privilege, that privilege did not extend to the "top emails" used to forward those communications to third parties who were not authorised representatives of the company for the purpose of seeking or receiving legal advice. Specifically, the court found that the bankrupt himself, Mr. Bothra, and an external individual, Mr. Mishra, did not satisfy the criteria for authorised representatives of RBI.

Furthermore, the judgment reinforces the principle that once privileged information is disclosed to a third party, the evidentiary protection of privilege is generally lost. While the claimant attempted to rely on the equitable jurisdiction of confidence to restrain the use of the documents, the court applied the three-fold test from Coco v AN Clark (Engineers) Ltd [1969] RPC 41 and concluded that no such duty arose in the circumstances. The court emphasized that the Private Trustees were performing a statutory function in the public interest—investigating the affairs of a bankrupt—and that the documents had come into their possession through legitimate investigative means. This decision serves as a stern warning to corporate entities regarding the casual dissemination of legal advice to individuals outside the core "client" circle, even if those individuals are family members or former directors.

Ultimately, the case underscores the Singapore court's robust approach to insolvency investigations, ensuring that statutory officers like private trustees are not unduly hampered by assertions of privilege that have been compromised by the party's own conduct. The ruling clarifies that the mere marking of an email as "Private and Confidential" is insufficient to maintain privilege or create an enforceable duty of confidence if the recipient is not an authorised agent of the legal entity holding the privilege.

Timeline of Events

2015 – 2016: Mr. Rajesh Bothra serves as a director of RB Investments Pte Ltd (“RBI”).
13 December 2017: Date of the earliest email in the "First Email Chain," involving communications between Oon & Bazul LLP (“O&B”) and RBI representatives.
27 February 2020: Mrs. Rashmi Bothra (RBI’s sole director) transfers ownership of RBI and RB Family Trust to a Cook Islands trust.
28 February 2020: Date of the "Second Email Chain," involving an email from Mr. Bothra to O&B, subsequently forwarded to Mr. Mishra.
25 February 2021: A bankruptcy order is made against Mr. Rajesh Bothra on the application of Maersk Trade Finance A/S.
2023: Mr. Jason Aleksander Kardachi and Mr. Patrick Bance are appointed as the Private Trustees of Mr. Bothra’s estate.
21 March 2023: The Private Trustees file an affidavit (the “JAK Affidavit”) in support of SUM 794/2023, seeking the examination of Ms. Wong. This affidavit contains the disputed Email Chains.
5 May 2023: RBI files Originating Application No 473 of 2023 (“OA 473”) seeking to expunge the Email Chains and restrain their use.
19 June 2023: RBI files an application for an interim injunction to restrain the use of the Email Chains pending the final determination of OA 473.
23 June 2023: The court grants the interim injunction.
28 June 2023: The Private Trustees file their evidentiary response to OA 473.
4 July 2023: Substantive hearing of OA 473 before Philip Jeyaretnam J.
29 September 2023: The High Court delivers its judgment dismissing RBI’s application.

What Were the Facts of This Case?

The claimant, RB Investments Pte Ltd (“RBI”), is a Singapore-incorporated company. At the material time, its sole director was Mrs. Rashmi Bothra, a Singapore citizen. Her husband, Mr. Rajesh Bothra, had previously served as a director of RBI between 2015 and 2016. The third respondent, Ms. Wong Shaw Mooi, served as RBI’s corporate secretary and had also provided administrative assistance to Mr. Bothra across his various business interests. The dispute is set against the backdrop of Mr. Bothra’s bankruptcy, which was initiated by Maersk Trade Finance A/S, leading to a bankruptcy order on 25 February 2021. The first and second respondents were appointed as the Private Trustees of his estate.

In the course of their statutory duties to investigate Mr. Bothra’s financial affairs and identify assets for the bankruptcy estate, the Private Trustees focused on RBI. They noted that in February 2020, Mrs. Bothra had transferred the ownership of RBI to a trust in the Cook Islands. Suspecting that RBI might hold assets belonging to the bankrupt or that the transfer was intended to shield assets, the Private Trustees applied in SUM 794/2023 for an order to examine Ms. Wong under s 335(1) of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”). To justify this examination, Mr. Kardachi filed an affidavit (the “JAK Affidavit”) which exhibited two specific sets of email communications, referred to as the "Email Chains."

The "First Email Chain" consisted of communications dated 13 December 2017. The core of this chain was an email from Oon & Bazul LLP (“O&B”) addressed to Mrs. Bothra and a "Mr. Harsh." This email contained legal advice regarding the potential restructuring of RBI’s assets. Crucially, the chain included "top emails" where these communications were forwarded to Mr. Mishra. RBI contended that O&B had been engaged by RBI to provide legal advice on legacy planning and corporate restructuring, and thus the entire chain was privileged.

The "Second Email Chain" was dated 27 and 28 February 2020. It began with an email from Mr. Bothra to O&B, which was explicitly marked "Private and Confidential." In this email, Mr. Bothra sought legal advice or provided instructions regarding certain corporate matters. This email was then forwarded by Mr. Bothra to Mr. Mishra on 28 February 2020. RBI claimed that Mr. Bothra was acting as an agent or authorised representative of RBI when communicating with O&B, and therefore the privilege belonged to the company.

The Private Trustees came into possession of these emails through their investigations, although the exact mode of acquisition was not detailed beyond the fact that they were obtained in their capacity as trustees. RBI argued that the emails were inadvertently disclosed or obtained without authorization. They sought orders to expunge the emails from the JAK Affidavit, a permanent injunction against their use or disclosure, and the delivery up of all copies. The Private Trustees resisted, arguing that any privilege had been waived or lost by the disclosure to third parties (Mr. Harsh and Mr. Mishra) and that no duty of confidence could prevent their use in the performance of their statutory duties under the IRDA.

The court was thus required to perform a granular analysis of the relationships between the parties in the email chains to determine if the communications fell within the protective umbrella of s 128 of the Evidence Act 1893 or the equitable doctrine of confidence. The status of Mr. Harsh and Mr. Mishra was central: if they were not "authorised representatives" of RBI, their inclusion in the email chains would prove fatal to the claim of privilege.

What Were the Key Legal Issues?

The court identified two primary issues for determination, each involving several sub-layers of legal doctrine:

Whether legal advice privilege can be asserted over the Email Chains: This required the court to determine if the communications were made for the dominant purpose of obtaining legal advice and, more importantly, whether the privilege was maintained despite the involvement of third parties. The court had to apply the "authorised representative" test to determine if Mr. Harsh, Mr. Mishra, or Mr. Bothra could be considered part of the "client" for the purposes of the Evidence Act 1893.
Whether the Email Chains are nonetheless impressed with an obligation of confidence: If privilege was lost or never attached, the court had to decide if the Private Trustees should be restrained in equity from using the documents. This involved the application of the Coco v Clark test and a consideration of whether the public interest in the administration of bankruptcy estates outweighed any residual interest in confidentiality.

These issues are significant because they test the boundaries of corporate privacy in the face of insolvency. The "authorised representative" issue, in particular, is a recurring problem for family-run or closely-held corporations where the lines between directors, shareholders, family members, and external consultants are often blurred. The court's task was to determine whether such informal structures could still benefit from the strict protections of legal professional privilege.

How Did the Court Analyse the Issues?

The court’s analysis began with the statutory framework of the Evidence Act 1893. Philip Jeyaretnam J noted that legal advice privilege is governed by ss 128 and 131 of the Act. Section 128(1) prohibits an advocate or solicitor from disclosing communications made in the course of employment, while Section 131(1) protects the client from being compelled to disclose confidential communications with their legal professional adviser.

The "Authorised Representative" Doctrine
The court emphasized that for a communication to be privileged, it must be between the solicitor and the client. In the corporate context, this extends to "authorised representatives" of the corporation. The court referred to its previous discussion in [2022] 3 SLR 890 at [49]–[53], noting that the test for an authorised representative is whether the individual was tasked with seeking or receiving legal advice on behalf of the entity. The court held:

“Legal advice privilege supports the core value of access to justice by ensuring that a client can consult his lawyer in confidence... However, this protection is not absolute and does not extend to communications shared with third parties who are not authorised representatives of the client.” (at [26]-[27])

Analysis of the First Email Chain
Regarding the First Email Chain, the court found that while the underlying advice from O&B to Mrs. Bothra was likely privileged, the inclusion of "Mr. Harsh" and "Mr. Mishra" was problematic. RBI failed to provide evidence that Mr. Harsh was an employee or officer of RBI at the time. Furthermore, Mr. Mishra was clearly an external party. The court reasoned that the "top emails" forwarding the advice to Mr. Mishra were not themselves for the purpose of seeking legal advice. Instead, they were merely disseminating advice already received. Consequently, the act of forwarding the advice to an external third party resulted in the loss of privilege over those specific communications.

Analysis of the Second Email Chain
The Second Email Chain involved Mr. Bothra (the bankrupt) communicating with O&B. RBI argued that Mr. Bothra was acting as its agent. However, the court noted that at the time of the email (February 2020), Mr. Bothra was neither a director nor an employee of RBI. The court rejected the argument that his status as the husband of the sole director or his past involvement with the company conferred "authorised representative" status. The court observed that the email was forwarded to Mr. Mishra, which further signaled a lack of intention to keep the communication within the privileged circle of the company and its lawyers.

The Loss of Privilege and the Role of Confidence
The court then turned to the interaction between privilege and confidence, citing the Court of Appeal decision in Wee Shuo Woon v HT SRL [2017] 2 SLR 94. The court explained that privilege is an evidentiary rule that prevents the production of documents in court. However, once a document is in the hands of a third party, the question shifts to whether the law of confidence can restrain its use. The court applied the test from Coco v AN Clark (Engineers) Ltd [1969] RPC 41:

The information must have the necessary quality of confidence.
The information must have been imparted in circumstances importing an obligation of confidence.
There must be an unauthorised use of that information to the detriment of the party communicating it.

The court found that RBI failed on the second and third limbs. Regarding the "top emails," the court held they did not have the necessary quality of confidence because they were sent to third parties (Mr. Mishra) without any clear restriction. More importantly, the court held that even if a duty of confidence existed, it would not be enforced against the Private Trustees in this context. The Trustees were not "wrongdoers" who had surreptitiously obtained the documents; they were statutory officers performing a public duty. The court cited Adinop Co Ltd v Rovithai Ltd and another [2019] 2 SLR 808, noting that equity may decline to enforce a duty of confidence where there is a "just cause or excuse" for disclosure, such as the investigation of potential wrongdoing or the administration of a bankrupt’s estate.

The Statutory Context of the IRDA
The court placed significant weight on the Private Trustees' powers under the IRDA. The purpose of s 335(1) is to allow trustees to "get in" the estate and investigate the bankrupt's affairs. To restrain the Trustees from using these emails would interfere with their statutory mandate. The court concluded that the public interest in the full disclosure of a bankrupt's affairs outweighed RBI’s interest in maintaining the confidentiality of emails that it had already shared with third parties.

What Was the Outcome?

The High Court dismissed RBI’s application in its entirety. The court declined to expunge the Email Chains from the JAK Affidavit and refused to grant the permanent injunctions sought by RBI. The interim injunction previously granted on 23 June 2023 was discharged.

The operative conclusion of the court was stated as follows:

“For these reasons, I dismiss RBI’s application in its entirety. The Email Chains were not protected by legal advice privilege because they involved third parties who were not authorised representatives of RBI. Furthermore, no equitable duty of confidence arises that would prevent the Private Trustees from using these documents in the discharge of their statutory duties under the IRDA.” (at [57])

Regarding the costs of the application, the court did not make an immediate order. Instead, it directed the parties to attempt to reach an agreement on costs within 14 days. If no agreement could be reached, the parties were instructed to file brief costs submissions (limited to three pages each) within a further seven days, after which the court would determine and fix the costs. This approach reflects the court's preference for parties to resolve ancillary matters like costs commercially, while remaining ready to adjudicate if necessary.

The practical effect of the judgment is that the Private Trustees are free to use the Email Chains in the examination of Ms. Wong and in any subsequent proceedings related to the bankruptcy of Mr. Bothra. This includes using the documents to trace assets or challenge the validity of the transfer of RBI’s ownership to the Cook Islands trust.

Why Does This Case Matter?

This case is a significant addition to Singapore’s jurisprudence on legal professional privilege and the powers of insolvency practitioners. It matters for several reasons:

1. Clarification of the "Authorised Representative" Test
The judgment provides a clear application of the "authorised representative" test in a corporate setting. It clarifies that mere familial relationship (husband of a director) or past directorship does not automatically make an individual an agent of the company for privilege purposes. Practitioners must ensure that only those specifically tasked with the legal matter are included in email chains. The court’s refusal to extend privilege to Mr. Bothra and Mr. Mishra highlights the risks of informal corporate governance.

2. The "Top Email" Distinction
The court’s distinction between the underlying legal advice and the "top emails" used to forward that advice is a crucial technical point. Even if the attachment is privileged, the act of forwarding it to a third party is a separate communication that may not be privileged. If that forwarding communication is not for the purpose of seeking legal advice, it—and potentially the attachment—loses its protection. This reinforces the "confidentiality" requirement of privilege: once the circle of confidentiality is broken, the privilege is imperilled.

3. Privilege vs. Confidence in Insolvency
The case reinforces the hierarchy of protections. Privilege is a powerful evidentiary shield, but once it is lost (e.g., via disclosure), the party must fall back on the law of confidence. However, confidence is an equitable remedy and is subject to discretionary bars, including the public interest. The judgment confirms that the statutory duties of a bankruptcy trustee to investigate an estate constitute a strong public interest that can override a claim of confidentiality.

4. Investigative Powers under the IRDA
For insolvency practitioners, the decision is a validation of their investigative reach. It suggests that if a trustee legitimately comes into possession of documents that were once privileged but have been "leaked" or shared by the company, the court will be slow to restrain their use. This is particularly relevant in cases involving suspected asset-stripping or complex offshore trust structures, where the "paper trail" is often found in fragmented email chains.

5. Alignment with Wee Shuo Woon
The decision aligns the High Court’s approach with the Court of Appeal’s landmark ruling in Wee Shuo Woon. It confirms that Singapore law does not follow the "once privileged, always privileged" rule in the face of third-party disclosure. Instead, it adopts a nuanced approach that balances the protection of legal consultations with the reality of how information is disseminated and the needs of justice.

Practice Pointers

Strict Email Protocols: Corporations should maintain strict protocols regarding who is included in communications with legal counsel. Avoid "cc-ing" individuals who are not directly involved in the legal decision-making process, even if they are senior stakeholders or family members of directors.
Documenting Authorisation: When external consultants or former directors are involved in a legal matter, the company should formally document their status as "authorised representatives" for the purpose of seeking and receiving legal advice. While not definitive, such documentation provides a stronger evidentiary basis for asserting privilege.
The Danger of Forwarding: Clients must be warned that forwarding legal advice to third parties—even with a "Private and Confidential" header—can result in the immediate loss of privilege. If advice needs to be shared with a third party, it should be done through a separate memorandum that summarizes the position without disclosing the direct communication with the lawyer, or under a common interest privilege framework if applicable.
Immediate Action on Leaks: If a company discovers that privileged documents have been obtained by an adverse party (like a trustee), it must act immediately to assert confidentiality. Any delay can be interpreted as a waiver or can allow the documents to be used in ways that are difficult to undo.
Insolvency Preparedness: Directors of companies in financial distress should be aware that their communications may eventually be scrutinized by trustees or liquidators. The "public interest" exception to confidentiality makes it difficult to shield documents from statutory investigators once the documents have left the immediate lawyer-client circle.
Vetting Affidavits: When responding to applications for examination under s 335 IRDA, counsel should carefully vet any exhibited documents for potential privilege claims before they are filed, as the act of filing itself can complicate subsequent attempts to expunge the record.

Subsequent Treatment

As a relatively recent decision from late 2023, RB Investments Pte Ltd v Kardachi stands as a persuasive authority in the General Division of the High Court. It has been cited for its clear articulation of the "authorised representative" doctrine and the limits of equitable confidence in the face of statutory investigative powers. It reinforces the trend in Singapore law toward prioritizing the transparency of insolvency proceedings over technical assertions of privilege that have been undermined by the parties' own lack of confidentiality. The case is likely to be a standard reference point for any future disputes involving the use of "leaked" or third-party documents by liquidators and trustees.