Introduction

In the realm of legal proceedings, understanding the nuances of evidentiary rules and their implications is paramount. One such concept is that of adverse inference. This article delves into the intricacies of adverse inference within the context of Singapore's legal landscape, examining its significance, application, and ramifications in commercial litigation.

What is adverse inference?

Adverse inference is a legal principle wherein a court draws a negative inference from the absence or withholding of evidence by a party. Put simply, if a party fails to produce evidence within its possession or control that is relevant to the case, the court may infer that the evidence would have been unfavourable to that party's position.

Section 116 of the Evidence Act 1893 (EA) grants the court the authority to make assumptions about events that are likely to have occurred, considering “common course of natural events human conduct, and public and private business” within the specific context of the case. Specifically, illustration (g) of section 116 EA allows the court to presume that “evidence which could be and is not produced would if produced be unfavourable to the person who withholds it”. This gives rise to the doctrine of adverse inference.

The Singapore Courts’ position

In the recent case of Wong Shu Kiat and another v Chen Jinping Michelle (personal representative of the estate of Tin Koon Ming, deceased) and another [2023] SGHC 105 (Wong Shu Kiat), the High Court addressed the issue of drawing adverse inferences in the absence of key witnesses. The defendants sought to draw an adverse inference against the plaintiffs for not calling Mr. Wong's sister as a witness, arguing that her testimony could have substantiated crucial aspects of the case.

The Court referenced Section 116 Illustration (g) of the EA, which allows for adverse inferences to be drawn when evidence that should have been produced by a party is withheld. However, the Court clarified that such inferences are not automatic and must be considered in the context of each case. There needs to be a basis for drawing such inferences and the presence of some evidence on the issue in question.

In this instance, the Court declined to draw an adverse inference against the plaintiffs for not calling Mr. Wong's sister as a witness. The defendants had not advanced a positive case or provided rebutting evidence on the matters in question. Drawing from the Court of Appeal's ruling in Sudha Natrajan v The Bank of East Asia Ltd [2017] 1 SLR 141, the Court emphasised that adverse inferences cannot be drawn merely based on speculation or the belief that certain evidence could have been presented.

Further, the Court clarified that adverse inferences cannot be drawn where there is reasonable and credible explanation for evidence not being adduced. The plaintiffs in Wong Shu Kiat sought to draw an adverse inference against the defendants for failing to call Mdm Yang as a witness. Mdm Yang's testimony was deemed significant as it could have corroborated Mr. Wong's account of a crucial telephone conversation. However, the Court found it inappropriate to draw adverse inferences against either party due to Mdm Yang being out of jurisdiction in China, which was a reasonable and credible explanation for her absence as a witness.

From the case of Wong Shu Kiat, it is clear that relevance of the evidence omitted itself is insufficient for a court to draw an adverse inference.

Developments in case law

This position appears to be the one adopted by the Singapore Courts in subsequent cases. In the case of Ivanishvili, Bidzina and others v Credit Suisse Trust Ltd [2023] 5 SLR 59 just one month after Wong Shu Kiat, the Singapore International Commercial Court (SICC) took into account the pressures and complexities of the preparation for and conduct of the trial, including the numerous amendments to the pleadings in that case. The SICC concluded that no adverse inferences should be drawn that the defendant deliberately withheld documents, but rather it was consistent with the defendant’s desultory approach to compliance with its disclosure obligations in the chaos of trial.

In the subsequent case of Xu Yuan Chen (alias Terry Xu) v Attorney-General [2023] SGHC 200, the High Court affirmed the position in Wong Shu Kiat, and held that an adverse inference cannot be drawn simply because one party argues that there is evidence that could have been adduced but was not. There must be “a substratum of evidence that justifies the drawing of an adverse inference” (at paragraph [40]).

Practical recommendations

Implementing effective document management practices is crucial for ensuring compliance with evidentiary obligations and minimising the risk of adverse inference being drawn. This may include measures like maintaining comprehensive records, conducting regular audits, and employing digital tools for efficient data retrieval.

Strategic litigation planning should encompass proactive measures to address the possibility of adverse inference. From the outset, parties should identify key evidence and witnesses, assess their relevance, and develop a cohesive legal strategy that anticipates evidentiary challenges.

Conclusion

Adverse inference still wields significant influence over the outcome of legal disputes under Singapore Law. It can still play a critical role in the court’s decision of the matters placed in front of them. By understanding its application, adhering to evidentiary obligations, and adopting proactive strategies, parties can navigate the complexities of litigation with greater confidence and efficacy.

If you have any queries/clarifications on the above, please do not hesitate to contact the authors.