WHETHER TO STAY CIVIL PROCEEDINGS DUE TO CONCURRENT CRIMINAL PROCEEDINGS
In Debenho Pte Ltd & Anor v Envy Global Trading Pte. Ltd. & Anor [2022] SGHC 7, the Singapore High Court had to consider whether the defendant should be permitted to stay civil proceedings brought against the defendant on the basis that, among others, the defendant also faces criminal proceedings arising out of the same facts.
The issue. The issue in the case is encapsulated in the first paragraph of the judgment:
“1 In this matter, the defendant seeks to stay a civil suit that has been brought against him on the ground, amongst others, that he also faces criminal charges arising out of the same facts, and that he will be prejudiced if both the civil suit and criminal case proceed concurrently. He argues he enjoys the right of silence and the privilege against self-incrimination, both of which will be infringed if the civil suit is not stayed. He also argues that he will be compelled to reveal his defence to the criminal charges in the civil suit, and that would give the Prosecution a significant advantage that they would not otherwise have. This stay application thus engages the legal principles that are applicable when the court has to decide whether civil proceedings should be permitted to proceed in the usual course, when there are at the same time pending criminal proceedings, faced by the defendant, that arise out of the same factual matrix.”
In brief, the second defendant brought an application that the civil suits commenced against him be stayed:
(1) Pending the final outcome of any application that the plaintiffs may make for leave to continue the suit against the first defendant (which have been stayed as the first defendant was wound up and the plaintiffs have not sought leave of court to pursue their claims against the first defendant); and
(2) Final determination of the criminal proceedings against the charges brought against the second defendant, including any appeals.
The stay application was dismissed by the Assistant Registrar and the second defendant appealed against the Assistant Registrar’s decision. This article focuses on the legal principles set out by the High Court, and specifically, on the issue of whether the civil proceedings should be stayed due to the criminal proceedings.
The historical approach. The High Court observed that it was “once a rule of the common law that the court would stay a civil action when criminal prosecutions arising out of the same events or subject matter were also pending” ([33]).
The High Court stated that as this was the result of the “felonious tort rule”, it is questionable whether the rule would have been part of the common law as it applied in Singapore, given that Singapore’s criminal law was based on the Penal Code (which draws no distinction between felonies and misdemeanours) and the impact of the Straits Settlements Penal Code (SS Ord No 4 of 1871) ([33]).
The modern approach. However, “modern approach at common law” is to address the matter as a question of judicial discretion, citing the case of Panton and others v Financial Institutions Services Ltd [2003] UKPC 86 at [6] – [7].
As such, the court may stay the civil proceedings if the court is of the view that the balance of justice so requires. In doing so, the court will take into account ([34]):
The defendant’s right of silence; and
The plaintiff’s prima facie entitlement to have the plaintiff’s action proceed in the ordinary course of procedure and business of the court.
The burden is on the defendant (applying for the stay) to show that “… there is a real danger that the continuance of the civil action against him will result in injustice in the criminal proceedings, so that it is just and convenient that the plaintiff’s ordinary rights of having his claim heard and decided are interfered with … It will not suffice for the defendant to merely point to notional dangers …” ([35]; emphasis in italics in original).
Relevant Factors. The High Court referred to Megaw LJ’s judgment in Jefferson Ltd v Bhetcha [1979] 1 WLR 898 and Wootten J’s judgment in McMahon v Gould (1982) 7 ACLR 202 for a list of the factors which are relevant in considering if there is a “real danger” of injustice at [36]. We set out the factors below:
“the possibility that the civil action might obtain such publicity as to influence jurors and deprive the defendant of a fair trial”;
“the proximity in time of the trial of the criminal proceedings to the trial of the civil action”;
“where the disclosure of the defence in the civil action by an accused enables the fabrication of evidence by Prosecution witnesses or interference with Defence witnesses, resulting in a miscarriage of justice in the criminal proceedings”;
“the burden on the defendant of preparing for both sets of proceedings concurrently”;
“whether the defendant has already disclosed his defence to the allegations”; and
“the conduct of the defendant, such as his own prior invocation of the civil process when it had suited him”
Privilege against self-incrimination. The High Court accepted that a relevant issue to consider in assessing the “real danger” of injustice is that “If a civil action is not stayed, the defendant may eventually have to give evidence on matters relating to the concurrent criminal proceedings, in respect of which he may have enjoyed the right of silence and the privilege against self-incrimination” ([37]).
After reviewing the authorities, the High Court held that “a defendant in a civil action should not be able to invoke the right of silence in connection with any interrogatories served or questions asked of him in the civil proceedings, save where they may encroach upon his privilege against self-incrimination” ([41]), accepting that “the practical consequence of the above means that, if a defendant chooses to defend himself in the concurrent civil action, he may be required to speak about matters touching upon the subject matter of the criminal proceedings” ([42]).
The High Court then referred to Riedel-de-Haen AG v Liew Keng Pang [1989] 1 SLR(R) 417 and Reid v Howard and others (1995) 131 ALR 609 as examples where a defendant may avail itself of the privilege against self-incrimination in civil proceedings (at [43] – [45]), before cautioning that privilege against self-incrimination must be considered in light of the specific steps which the defendant is required to take (see [46] – [50]; and in particular [48]).
Advantage to Prosecution. The High Court also dealt with whether the Prosecution will “enjoy some advantage” if the Prosecution is “likely [to] have a preview of the defendant’s case before the trial of the criminal proceedings takes place” (at [51]).
The High Court rejected this argument, distinguishing the case of State of Queensland v Shaw [2003] QSC 436 (at [55]).
The High Court held that such a submission would be tantamount to saying that the “the defendant has an unconditional right to a stay of the civil action whenever there are concurrent related criminal proceedings and when the continuation of the civil action has the practical result of requiring the defendant to take steps that can disadvantage him in the criminal proceedings” (emphasis in original in italics), which would be contrary to the requirement that the defendant has the burden of establishing a “real danger” of prejudice (at [56]).
The High Court also gave other reasons why such a position should be rejected at [58] – [62].
Plaintiff’s entitlement. Lastly, the High Court explained that even if a defendant has established that the defendant would suffer a “real danger of prejudice”, it must nonetheless be balanced against the plaintiff’s prima facie entitlement to pursue its civil action (at [63]).
The High Court referred to the case of In re DPR Futures Ltd [1989] 1 WLR 778, where Millet J (as he then was) was satisfied that “there would be a real risk of prejudice to the defendants’ right to a fair trial in the criminal proceedings … he did not consider that real risk of prejudice to be a sufficient reason for the civil proceedings to be stayed, because serious injustice would be caused to large numbers of people … who would have no chance to pursue recourse to recover the moneys they had lost to the company, until the conclusion of the criminal proceedings” (at [64] – [65]).
Conclusion. Debenho Pte Ltd & Anor v Envy Global Trading Pte. Ltd. & Anor [2022] SGHC 7 shows that if an applicant is facing concurrent civil and criminal proceedings arising out of the same facts, it is open to the applicant to apply for a stay of the civil proceedings pending resolution of the criminal proceedings.
However, the applicant must convince the court that, on the facts of the case, (a) there would be a “real danger” of prejudice caused to the applicant if the civil proceedings were not stayed and (b) that balance of justice lies in favour of staying the civil proceedings as opposed to the respondent’s prima facie entitlement to have the civil proceedings continue.
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