2. Orders for preservation of property

If the situation is slightly less urgent or does not require a surprise search, you can apply for an order under Order 29, rule 2 of the Rules of the High Court (Cap. 4A) or the Rules of the District Court (Cap. 336H). This rule allows the court to make orders for the detention, custody, or preservation of property.

Legal test for granting the preservation order

Under the rules, the type of “property” covered include documents. The court can order that specific documents be placed in the custody of the court or a neutral third party if it is “just or convenient” to ensure a fair trial.

However, this rule is intended to preserve the physicality of the document (e.g. to prevent a forged deed from being destroyed). If the applicant simply wants to see or copy the information inside a document, you should use the standard discovery process.

To obtain a preservation order, the applicant must usually satisfy 4 main requirements:

The applicant must show that there is a serious issue to be tried. For information about what a serious issue to be tried is, please refer to “The trial has not yet commenced but the defendant’s wrongdoing has already caused some damage to the plaintiff. What can the plaintiff do to stop the defendant’s wrongdoing in the meantime?”.
The applicant must show that the property is genuinely connected with the dispute. In legal terms, the property must be bona fide the subject matter of the dispute, or an important question in the case must arise in relation to that property.
The applicant must show that something needs to be done to protect or secure the property. For example, there may be a concern that the property could be damaged, altered, removed, sold, destroyed, or otherwise dealt with before trial.
The applicant must show that the order is necessary and just in all the circumstances, including the balance of convenience and the lower risk of injustice.

Unlike a Mareva injunction, the applicant does not necessarily need to prove that the other side is trying to hide or dissipate assets. A preservation order is focused on protecting specific property connected with the dispute, not freezing a person’s assets generally.

The court will also consider whether money compensation would be enough. There is no need for the applicant to show that damages would not be an adequate remedy. However, if the court opines that the applicant can be adequately compensated by damages later, the court is less likely to make a preservation order.

The court will also consider whether the application has been made promptly. A long delay may suggest that urgent protection is not really needed.

Duties of the applicant

To succeed in stopping the destruction of evidence through these temporary orders, the applicant must fulfill two major obligations to the court:

Where an application is made ex parte, the applicant has a strict duty of full and frank disclosure. This means the applicant must tell the court all important facts, including facts that may help the other side or weaken the applicant’s own case. The applicant must act with the highest good faith. If he fails to do so, the court may later set aside the order.

There is no strict requirement for an undertaking as to damages where the court grants a preservation order, albeit that the court may require such an undertaking “where the circumstances warrant”. An undertaking as to damages is a promise to compensate the other party for any loss caused by the order if the court later decides that the order should not have been granted.

Application procedure

The application should be made as soon as practicable. The plaintiff may apply after the legal proceedings have started. The defendant may also apply, but generally only after acknowledging service of the writ or originating summons, unless the court directs otherwise.

Most applications are made by summons with notice to the respondent, supported by an affidavit/affirmation.

The applicant should explain clearly what the property is, why it matters to the case, and why the court needs to protect it. If the necessary facts are already clear from the pleadings, a separate affidavit/affirmation may not always be required. But in practice, evidence is usually important because the court needs to understand why the order is necessary.

In cases of extreme urgency, the applicant may apply ex parte (without notice) supported by an affidavit/affirmation, but he must justify why notice could not be given.

Consequences of non-compliance

A preservation order is a mandatory direction from the court. If a respondent wilfully fails to comply, for example, by destroying documents after being served, he is in contempt of court. This can lead to serious penalties, including heavy fines or a sentence of imprisonment.