Chua Chian Ya v Music & Movements (S) Pte Ltd (formerly trading as M & M Music Publishing)

• Jurisdiction: Singapore
• Judge: Chan Sek Keong CJ
• Judgment Date: 06 November 2009
• Neutral Citation: [2009] SGCA 54
• Docket Number: Civil Appeal No 167 of 2008
• Date: 06 November 2009
• Published date: 18 November 2009
• Year: 2009
• Plaintiff Counsel: Jonathan Yuen and Joana Teo (Samuel Seow Law Corporation)
• Citation: [2009] SGCA 54
• Defendant Counsel: Kenneth Tan SC (Kenneth Tan Partnership), Lim Tat and Dew Wong (Aequitas Law LLP)
• Court: Court of Appeal (Singapore)
• Subject Matter: Breach,Contract,Restraint of trade,Illegality and public policy

6 November 2009 Judgment reserved.

Andrew Phang Boon Leong JA (delivering the judgment of the court):

Introduction

1 This is an appeal against the decision of the High Court judge (“the Judge”) to dismiss Originating Summons No 937 of 2008 (“OS 937”), which was filed on 11 July 2008 (see Chua Chian Ya v Music & Movements (S) Pte Ltd (formerly known as M & M Music Publishing) [2009] SGHC 75 (“the GD”)).

2 The appellant is local singer-songwriter, Ms Chua Chian Ya (“Chua”), more popularly known as Tanya Chua. The respondent is Music & Movements (S) Pte Ltd (“M&M”), a music publisher which previously published Chua’s works. In OS 937, Chua sought a declaration that, inter alia, all rights in the songs composed by her during the period of her first agreement with M&M dated 18 September 2002 (“the Principal Agreement”) as extended by a second agreement with M&M dated 25 May 2005 (“the Extension Agreement”) had reverted to her (we shall hereafter refer to these songs as “the Compositions”). The application was dismissed with costs by the Judge on 9 October 2008.

Background

The relevant contracts

3 Chua initially entered into a contract with Ping Pong Music Publishing Singapore (“Ping Pong”) dated 18 August 1999 that lasted three years. Both Ping Pong and M&M were run by one Lim Sek at the material time. After that initial agreement came to an end, Chua entered into the Principal Agreement with M&M on 18 September 2002, also for a period of three years, under which she agreed to compose songs exclusively for M&M. The rights in the Compositions were assigned to M&M. In consideration, Chua received an advance royalty payment of $20,000. M&M remained responsible for promoting Chua’s works and for collecting royalties on Chua’s behalf. The salient terms of the Principal Agreement were as follows:^{[note: 1]}

3. GRANT OF RIGHTS

The Writer [ie, Chua] hereby irrevocably and absolutely assigns, conveys and grants to the Publisher [ie, M&M], its successors and assigns all rights and interests of every kind, nature and description in and to the Composition[s] created by the Writer during the term of this Agreement …

…

10 STATEMENT OF ACCOUNTS AND AUDITS

10.1 A statement of all accounts shall be provided and delivered to the Writer by the Publisher whether or not any royalties or fees are then due to the Writer, and all monies due thereunder pursuant to Paragraph 6 hereof [viz, the provision on royalties] shall be paid by the Publisher to the Writer, by bank order or in cheque, in Singapore Dollars.

10.2 The Writer or its representative shall have the right to inspect all books, records and other documents of the Publisher related to the Compositions, at the place of business of the Publisher, during usual business hours, and upon reasonable notice; all costs of such inspection shall be paid by the Writer; provided, however, that if more than ten (10%) percent of difference between the rendered statements by the Publisher and the result of [the] said inspection has occurred, all costs (except travelling and living costs) of such inspection shall be paid by the Publisher. These audit costs may never exceed an amount equal to the amount of underpayment.

…

12 SUSPENSION AND TERMINATION

In the event that the Publisher fails to account and make payment hereunder or fails to perform any obligations required hereunder and in the event that such failure is not cured within thirty (30) days after written notice has been served on the Publisher, or in the event that the Publisher becomes inactive, ceases doing music publishing business or … [goes] into compulsory liquidation or bankruptcy, then and in any such events the Writer, in addition to such other rights or remedies which it may have at law or otherwise under this agreement, may elect to cancel or terminate this agreement without prejudice to any rights or claims it may have, and then all right[s] in and to the Composition[s] … shall revert to the Writer and the Publisher may not thereafter exercise any rights hereunder.

[underlining and emphasis in bold in original; emphasis added in italics]

4 On 25 May 2005, Chua entered into the Extension Agreement with M&M, which extended the Principal Agreement until 17 March 2007. She was given $40,000 as an advance royalty payment. Of particular importance was the following term in the Extension Agreement:^{[note: 2]}

6. The obligations of the Publisher [ie, M&M], namely to promote, publish and … commercially exploit (“to exploit”) all Compositions … so as to generate royalties, revenue and income therefrom and to pay the same to the Writer [ie, Chua], shall survive 17 March 2007, and the Publisher shall undertake and shall continue to undertake to the Writer to expend all reasonable work and efforts to this end, and shall not neglect and/or fail to exploit any part, portion, or particular Composition. [emphasis added]

5 Pursuant to the Principal Agreement and the Extension Agreement, the Compositions were promoted throughout various countries, including Taiwan, the People’s Republic of China (“China”), Malaysia and Singapore. Chua became famous in the region as a singer and songwriter as a result of her musical talents. Her record albums, by all accounts, sold well. At the time the dispute in the present proceedings arose in late 2006, Chua had written and recorded songs for nine albums. She had also won several musical awards both in Singapore and in Taiwan. M&M appointed an international music publishing house, Warner/Chappell (“W/C”), as the administrator to take charge of tabulating and collecting royalties arising from the use of the Compositions. The arrangement was that W/C would send statements of account on the royalties collected (“W/C’s accounts”) to M&M; M&M, in turn, would summarise W/C’s accounts and send a summary of those accounts along with its copy of the accounts based on W/C’s accounts to Chua every six months. According to counsel for M&M, Mr Kenneth Tan SC (“Mr Tan”), the accounts from M&M would contain a detailed breakdown of the royalty payments collected by it. Chua’s counsel, Mr Jonathan Yuen (“Mr Yuen”), admitted that documents from M&M were sent to Chua, but argued that the correctness of the breakdown of the royalty payments could not be determined from the accounts.

The discrepancies in the accounts

6 The main facts as gleaned from the material correspondence between Chua and M&M’s two representatives, Lim Sek and Jack Lim, which commenced in late 2006, are as follows (in this regard, we have considered only the correspondence that is directly relevant to the accounting discrepancies in issue in this appeal (“the Discrepancies”), viz, the discrepancies between W/C’s accounts for the period from January to June 2006 (which accounts, according to Chua, were sent to her inadvertently) and M&M’s summary). On 14 November 2006, Chua sent an e-mail to M&M and W/C to seek clarification of the Discrepancies. She pointed out that the figures for the royalties collected from China, Malaysia and Singapore as provided in M&M’s summary did not tally with the figures given in W/C’s accounts for the same period. She also asked about the “EZ Peer settlement”,^{[note: 3]} which was (purportedly) a sum that should have been paid to her without any deduction for commission by M&M. In the same e-mail, Chua stated that “[b]ased on inaccurate accounting, [she was] confirming the termination of the publishing agreement between M&M … and [herself], effective on 1st November 2006”.^{[note: 4]}

7 Following Chua’s e-mail of 14 November 2006, Lim Sek responded on 25 November 2006 explaining that the Discrepancies could have arisen because of W/C’s mistake in paying Chua royalties which were actually due to another singer. He then asked W/C to calculate the amount which had been paid to Chua by mistake. However, in her e-mail dated 4 December 2006, Chua disagreed with Lim Sek on the reason for the Discrepancies and asked, instead, for clarification of the statements which had been sent to her. Sometime on or around 26 December 2006, M&M sent another statement of account for the period from January to June 2006 to Chua.^{[note: 5]} We should highlight at this point that, unfortunately, only summaries of the statements of account could be found in the documents submitted to the court by both parties in their respective affidavits. The complete statements of account (including, for example, the breakdown of the royalties from Chua’s performances, the number of record albums sold, the details of the withholding tax deducted and so forth) were never provided to either this court or the Judge.

8 In an e-mail to Chua dated 30 December 2006, M&M’s representative, Jack Lim, confirmed that the most recent statement of account sent by M&M was “[M&M’s] final amendment”,^{[note: 6]} and informed Chua that she should disregard the prior statements. Chua replied by e-mail on the same day stating that Lim Sek had not given her good reasons for the Discrepancies, and reiterating that she wished to terminate her contract with M&M (see [6] above). Jack Lim then sent a summary of the updated accounts listing the sum that had allegedly been overpaid to Chua. In March 2007, Lim Sek again sent an e-mail to Chua explaining that the Discrepancies had arisen because Chua’s individual statements of account had been mixed with those of other songwriters.

9 Sometime in April 2007, Chua appointed her current lawyers to represent her. From that point onwards, M&M corresponded mainly with Chua’s lawyers. In the course of such correspondence, M&M again provided several reasons for the Discrepancies. It was at this juncture that M&M explained that the Discrepancies could have arisen because of withholding tax deducted in Taiwan, where W/C was based. As we stated above (at [7]), the complete statements of account, including W/C’s accounts, were never provided, and the only documentary evidence that we have on record consists of summaries of withholding tax...