Back
2020 MarsdenLR 1596
COURT OF APPEAL (PUTRAJAYA)
YA DATO’ SURAYA OTHMAN, J, YA DATO’ HAS ZANAH MEHAT, J, YA TUAN S. NANTHA BALAN, JJCA
Malaysia Debt Ventures Berhad – Plaintiff
Versus
Platinum Techsolve Sdn. Bhd. & Ors – Defendant
RAYUAN SIVIL NO. W-02(IM)(MUA)-1082-06/2019
Kumar Kanagasingam and Chia Oh Sheng (Lee Hishamuddin Allen & Gledhill) for the Appellant.
Lavinia Kumaraendran and Mavinthra Jothy Thillainathan (Thomas Philip) for the Respondents.
A draft settlement agreement is protected by legal professional privilege until it is disclosed to the other party, and mere awareness of its existence does not waive this privilege.
Headnote:(A) Evidence Act 1950 - Section 126 - Legal professional privilege - Draft Settlement Agreement (DSA) - Appeal concerning discovery application for DSA denied by High Court - Appellant contended DSA is protected by legal professional privilege - Respondents sought discovery arguing DSA was crucial for proving a compromise - Court found DSA was neither relevant nor necessary for fair disposal of case and remained a privileged document. (Paras 10, 29, 59, 85, 218)
Facts of the case:
Appellant filed Suit to recover amounts owed under Islamic financing. Respondents contended that a concluded settlement was reached based on correspondence. MDV refused to share DSA, citing privilege. Respondents' application for its discovery was allowed by High Court, prompting this appeal. (Paras 2, 11, 31)
Findings of Court:
DSA did not play a role in MDV's claims; thus, it was deemed irrelevant and unnecessary for the case at trial, and its disclosure would potentially cause increased costs. Court determined DSA was a solicitor's work product protected by privilege. (Paras 60, 212, 229)
Issues: The primary issue was whether the DSA was protected by legal professional privilege and whether it was relevant and necessary for fair disposal of the case. (Paras 10, 176)
Ratio Decidendi: The court emphasized that privilege protects drafts not disclosed, asserting DSA remained privileged since it was never shared with the counterparty. The lack of execution and approval established that it could not be considered evidence of a concluded agreement. (Paras 218, 230)
Result: Appeal allowed; High Court’s order set aside, with costs awarded to Appellant. (Para 232)
| Table of Content |
|---|
| 1. introduction of the appeal context. (Para 1 , 2 , 3 , 4 , 5) |
| 2. arguments related to the privilege of the dsa. (Para 8 , 9 , 10 , 11 , 12) |
| 3. observations related to legal privilege. (Para 59 , 64 , 65 , 66) |
| 4. state of necessity for discovery. (Para 172 , 173 , 174) |
| 5. conclusion and costs order. (Para 232) |
S. Nantha Balan JJCA:
JUDGMENT OF THE COURT
Introduction
[1]This is an appeal against a discovery application which was granted in Suit No. WA-22M-300-07/2018 (“Suit 300”). The appellant in this appeal is Malaysia Debt Ventures Berhad (“MDV”). MDV is the plaintiff in Suit 300. The appeal is against an order of discovery of a specific document, namely a draft settlement agreement (“the DSA”). The discovery application was filed by the respondents – the defendants in Suit 300. The decision of the High Court is reported as Malaysia Debt Ventures Berhad v Platinum Techsolve Sdn. Bhd. & Ors
[2]MDV filed Suit 300 to recover the amounts which are said to be owing under an Islamic financing facility. The respondents counterclaimed and contended that based on the exchange of correspondence and discussions between MDV and the 1st respondent (“R1”), there was a concluded contract of settlement, albeit that a formal settlement agreement had not been executed.
[3]The background to the DSA is as follows. MDV and R1 had exchanged correspondence and held discussions with respect to a settlement of a debt under an Islamic financing facility which was due and owing to MDV. R1 was the counterparty to the proposed settlement.
[4]The terms of the proposed settlement were to follow the terms as stipulated in MDV’s letter dated 19 February 2018. In that letter, MDV had also stipulated that they would prepare the settlement agreement and that it must be executed by 31 March 2018 (“the deadline”).
[5]Thus, MDV instructed their external solicitors to prepare the DSA. The external solicitors prepared the DSA and sent it to MDV. The DSA was at all times in MDV’s possession. R1 was not privy to the contents of the DSA. The DSA was never disclosed or forwarded to R1 for their perusal/approval.
[6]There is some controversy as to whether the DSA was internally discussed and approved by MDV’s management and whether a decision had been made that the DSA was ready to be forwarded to R1. This is dealt with in the later part of the judgment. There is no doubt that R1 was aware that the settlement was to abide by the terms as per MDV’s letter dated 19 February 2018.
[7]However, the parties ultimately did not execute any settlement agreement on or before the deadline or at all. By a letter dated 13 April 2018 MDV intimated to R1 that the settlement was no longer viable. MDV’s gave their reasons for taking the stand as to the alleged non-viability of the settlement. MDV’s said reasons are not relevant for present purposes, although they will be highly relevant for purposes of the trial.
[8]In seeking discovery of the DSA, the respondents’ position was, inter alia, that even though the DSA was a solicitor’s work product, there was (in this case) “no confidentiality” as to its contents, as the terms of the proposed settlement were known to the parties and in any event, the DSA was eventually to be extended to RI for their perusal and approval. As such, the respondents’ position is that the DSA was not protected by privilege.
[9]MDV resisted the application for discovery on the basis that the DSA is neither relevant nor necessary for the fair disposal of their suit and/or the Counterclaim. MDV also maintained that the DSA is protected by legal professional privilege (s.126Evidence Act 1950
[10]One of the issues in this appeal is whether a solicitor’s work-product (in this case, the DSA) which was prepared for and given to the client in “draft” form and which had not yet been disclosed or forwarded by the client (MDV) to the counterparty (R1), is privileged per s.126Evidence Act 1950
[11]MDV contends that the learned Judge erred in the analysis of the evidence and
