What is Pre-Action Discovery?

by Donovan & Ho | Oct 8, 2018 | Dispute Resolution

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The strength of your case depends on what evidence you have to substantiate your
claims. Discovery applications are often used by litigants to enable them to obtain
documents which are relevant to their case, but are in the possession, custody or
power of their opponent.
Discovery applications are typically made after a suit has already been commenced
in court. However, there are instances where a discovery application may be done
before the filing of a legal suit.  Prior to the Rules of Court 2012, there was no
express mechanism for a party to apply for discovery before commencing a suit. 
Pre-action discovery was therefore governed by the limited scope of case law under
the Norwich Pharmacal principles (derived from the House of Lords’ decision
in Norwich Pharmacal Co v Customs and Excise Commissioners [1973] UKHL
6, [1974] AC 133). Under the Norwhich Pharmacal principle, discovery may be
obtained against a third party if the information sought is necessary to identify a
wrongdoer, or to find/preserve evidence that may support an action against an
unknown wrongdoer.
In 2012, the Malaysian Rules of Court were amended to include Order 24 Rule 7A,
which allows parties to apply for pre-action discovery. This article will examine the
ambit of a pre-action discovery application under Order 24 Rule 7A.
Purpose of Pre-Action Discovery
Imagine this situation: you enter into a contract with X, whereby in exchange for
services rendered, X agrees to give you 20% of the proceeds from the sale of his
assets. After your services are rendered, you notice that Y is now in possession of
X’s assets. You therefore suspect that X has sold his assets to Y and you are

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 entitled to 20% of the proceeds pursuant to the contract.  However, when you press
X, he refuses to tell you whether he sold his assets, or how much he sold his assets
for.  You are aware that a certain amount of money may possibly be owing to you
from X, but you have no idea how much because X doesn’t want to tell you the
purchase price or even confirm the sale. You could potentially file a suit against X,
but because you don’t know how much is owing to you or when the liability arose (if
at all – what if X never sold his assets to Y and you made a wrong assumption?),
your suit may be vague and lacking in material particulars.
Pre-action discovery may be applied for where one party (the applicant) requires
documents or information from another party in order to:
 decide whether the applicant has a cause of action;
 identify a wrong-doer;  or
 obtain necessary information and documents to properly frame or quantify a
claim
Legal Requirements
Generally, a litigant must demonstrate the following requirements if they want to be
granted pre-action discovery:
 State the material facts pertaining to the intended proceedings;
 Whether the person against whom the order is sought is likely to be a party in
the subsequent proceedings
 The documents sought are relevant to an issue arising or likely to arise out of
the future claim to be made;
 Identify the persons likely to have or had the documents in his possession
custody or power for the Order to apply upon.
Of the four criteria above, the most “controversial” is the relevancy test.  The test of
relevancy was explained in Ahmad Zahri Mirza v Pricewatercoopers Capital Sdn
Bhd & Ors [2015] 7 CLJ 930, whereby it held that a document would be relevant if it
contained information which either directly or indirectly allows the requestor to
advance his own case or to damage the case of his adversary, or otherwise fairly
lead him to a train of inquiry.  In short, a document may be deemed relevant if it
would help strengthen a proposed case or negate a defence.
In the Ahmad Zahri Mirza case, the Plaintiff was entitled under a contract to receive
a cut of the purchase price from the acquisition of shares in a certain company.   He
applied for pre-action discovery to obtain the valuation report so he could assess and
quantify the amount due to him under the contract. The Court granted pre-action
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discovery since without the valuation report, the Plaintiff would not know how to
quantify the exact amount owing to him:
Without knowing the valuation … as a whole, the plaintiff would be in no position to
find out the price per share … and hence would not be able to calculate the
purchase price due to him for the disposal of his shares… His claim though, founded
on a breach of the sale of shares contract, would be lacking in material particulars
with respect to the amount of balance purchase price that is due to him from
Megawisra. Indeed the plaintiff would not even be in a position to issue a letter of
demand much less to reasonably and rationally negotiate for a settlement and failing
which then, to proceed to file an action.
Should the plaintiff proceed to claim for the payment of purchase price to be
ascertained, that would be embarrassing to him and he might even suffer his claim
to be struck out for being vague and lacking in material particulars. Should he then
wring his arms in despair, having on one hand a valid cause of action and on the
other hand not being able to know the balance purchase price due to him and hence
not being able to proceed?

Additional Considerations
Merits of the Future Action
A party may try to resist an application for pre-action discovery on the grounds that
the applicant intends to file a baseless suit, ie: even if discovery is granted and the
applicant files a claim, that claim will not succeed. As such, the Court should not
waste their time granting a pre-action discovery.
It has since determined that there is no such requirement for an applicant to prove
that the case it intends to file is a good or strong case. The Court of Appeal
in Infoline Sdn Bhd Benjamin Lim Keong Hoe [2017] MLRAU 1 held that a
prospective litigant does not need to show in advance that he has a good cause of
action in order to succeed in a pre-action discovery application. This is because the
very purpose of pre-action discovery is to enable a plaintiff to find out before he
starts his action whether he has a good cause of action or not. The object of pre-
action discovery would be defeated if the Plaintiff must first demonstrate, before he
saw the documents, that he has a good case. 
Similarly, in Archer Recruitment Pte Ltd v Savills Project Management Sdn
Bhd [2018] 1 LNS 703  the High Court held that it ought not be concerned with the
merits of the Plaintiff’s intended claim as the merits of the future action are not
relevant to an application for pre-action discovery. The Court in a pre-action
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discovery was not required to delve into merits or demerits of Plaintiff’s intended
action against the Defendant. On appeal, the Court of Appeal agreed with the High
Court’s decision and maintained the order for pre-action discovery.
It can therefore be surmised that so long as an applicant can meet the legal
requirements set out in Order 24 Rule 7A, pre-action discovery may be granted
(subject to the other considerations mentioned here). The applicant does not need to
demonstrate the strength of their future claim, so long as their application is also not
a “fishing expedition” (ie: hunting for addition information to merely strengthen their
case or to find out more wrong doings which they were previously unaware of).
Confidentiality
It is also not uncommon for a party to object to pre-action discovery on the basis that
the documents sought are confidential. In this context, courts have held that the right
to confidentiality must also be properly balanced with the interests of the applicant in
enforcing his rights.  On its own, confidentiality is not a bar to pre-action discovery
since the Court may impose a condition in the discovery order that the applicant
cannot use the information disclosed for any purpose other than for the intended
action.
Equitable Considerations
The Court of Appeal in its recent (June 2018) judgment  (Bandar Utama
Development Sdn Bhd & Anor v Bandar Utama 1 JMB [2018] 4 MLRA 345)  has
also clarified that pre-action discovery is an equitable remedy. Being an equitable
remedy, it is not granted “as of right”. As such, if there is an alternative remedy
available that must be resorted, or if an action can be filed without pre-action
discovery, that action ought to be filed and subsequently discovery orders should be
obtained through the normal process.  In the Bandar Utama case, there was a
dispute between parties relating to delivery of strata titles. The Court of Appeal
refused to grant pre-action discovery because the applicant’s concerns and relief
should have been dealt with at another forum, ie: the Strata Management Tribunal,
as provided under the Strata Management Act 2013. Since an alternative
remedy/forum was available to the applicant, the Court of Appeal found that the pre-
action discovery approach was inappropriate.
Pre-action discovery applications, if utilised correctly, can result in significant time
and costs savings for all parties. In some situations, after receiving the necessary
documents, litigation may be avoided. Even if litigation is unavoidable, pre-action

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discovery may help reduce time and costs by identifying the real issues, whether
existing or anticipated.
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India: Discovery By Interrogatories
23 August 2018 by Manish Lakhawat

What is Interrogatory and Discovery by Interrogatories?

 Interrogatories are covered under Section 30 and Order XI Rule 1 to 11, 21 and 22 of
the Code of Civil Procedure, 1908.
 Interrogatories are a set of questions which a party administers on the other party
with the leave of the Court.
 The party to whom interrogatories are administered, must answer them in writing and
on oath. The party to whom interrogatories are administered, discovers or discloses
by his affidavit, in answer to the interrogatories, the nature of its case. This is called
Discovery by Interrogatories.
 Interrogatories have to be confined to the facts which are relevant to the matters in
question but not as to conclusions of law, inference from facts or construction of
words or documents.
 The Application for leave to administer interrogatories is as a rule made ex parte and
the Court shall decide the said application within 7 days from its filing. (Rule 2)
 Interrogatories shall be in Form 2 of Appendix C. (Rule 4)

Purpose of Interrogatories

Interrogatories are allowed for the following purposes:

1. To ascertain the nature of the opponent's case or the material facts constituting his
case
2. To support one's own case, either

a. Directly, by obtaining admissions, or

b. Indirectly, by destroying the opponent's case

Which types of Interrogatories may not be allowed

 Interrogatories for obtaining discovery of facts, may not be allowed, which

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 o constitute the evidence of the opposite party
o contain any confidential or privileged communication
o involve disclosures injurious to public interests
 Interrogatories in the nature of fishing or roving enquiries are not allowed

Interrogation of a body corporate

 Where the party to be interrogated is a body corporate, the interrogatories should

specify the officer or member on whom the interrogatories are to be served. (Rule 5)

Objections to Interrogatories by answer can be made on following grounds, if the

interrogatory is: (Rule 6)


o Scandalous
o Irrelevant
o Not exhibited bonafide
o Premature i.e. not material at that stage
o Privileged communications
o Any other ground such as provided under Rule 7 or the answers are likely to
be incriminating in offences.
 These objections must be taken by the answering party in its affidavit of answers to
the interrogatories in Form No. 2, Appendix C. (Rule 8&9)

Setting aside and Striking off Interrogatories can be made on the following grounds (Rule
7)


o Unreasonably or vexatiously exhibited
o Prolix, Oppressive, Unnecessary or Scandalous
 The Application for setting aside or striking off interrogatories shall be made within 7
days after service of interrogatories.

Interrogatories not answered or insufficiently answered (Rule 11)

 If the interrogatories are not answered or insufficiently answered, then the

interrogating party may apply to the Court for an order requiring the other party to
answer or answer further.
 The Court may direct the party to answer either by affidavit or by viva
voce examination.

Consequence of failure to answer interrogatories (Rule 21)

If a party fails to comply with an order to answer interrogatories, then:

 If the failing party is a Plaintiff, its suit is to be dismissed for want of prosecution
 If the failing party is a Defendant, its defense to be struck out and be placed in a
position as if it had not defended.

o The party which served the interrogatories may apply to the Court for an order
to this effect.
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 o The Court shall pass such order after notice to the other party and giving
them an opportunity of being heard.

The Rajasthan High Court in a recent judgment of Govind Narayan and Ors. vs. Nagendra
Nagda and Ors. MANU/RH/0832/2017 has held the following:

 The whole purpose of interrogatories is to seek admission of a party on matter in

dispute so that the issues can be accordingly framed, minimizing the contentious
issues or disputes left for the adjudication of the Court, with the ultimate object of
facilitating an early and expeditious disposal of the suit.
 A perusal of the corresponding substantive provisions contained in Section 30 of the
Code of Civil Procedure shows that the Court has been clothed with a power to order
discovery or permit interrogatories at any time. Order XI Rule 1 of the Code
contemplates service of interrogatories on the opposite party, with a leave of the
Court. A close and conjoint reading of these two provisions make it clear that the
Court can allow service of interrogatories, at any stage of the suit, for which it has
been conferred wide discretion, but at the same time, the discretion must be
exercised judiciously.
 The information sought to be furnished must have some nexus or relevancy with the
dispute in question.
 The stage of the suit is a very significant aspect to be borne in mind, while deciding
an application admitting or permitting interrogatories. As stated above, the whole idea
or purpose of the provisions contain in Order XI Rule 1 of the Code is to save time
and cost by confining the controversy or narrowing down the points of differences or
disputes.
 Hence, the Court can be a bit liberal in admitting the interrogatories at the initial stage
of a suit but the same standards cannot be applied at the advanced stage of the trial,
when the evidence of the parties has begun. Interrogatories cannot be permitted,
once the evidence of the concerned opposite party is over.

The content of this article is intended to provide a general guide to the subject matter.
Specialist advice should be sought about your specific circumstances.

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