CL Media Pte. Ltd. v Leong Kaiyan

JudgeSheik Umar Bin Mohamed Bagushair
Judgment Date02 October 2019
Neutral Citation[2019] SGDC 209
Citation[2019] SGDC 209
CourtDistrict Court (Singapore)
Published date05 February 2020
Docket NumberDistrict Court Summons No 2674 of 2019, District Court Suit No 2176 of 2019
Plaintiff CounselNevinjit Singh J (Gomez & Vasu LLC)
Defendant CounselOh Kim Heoh Mimi (Ethos Law Corporation)
Subject MatterInjunctions,Interim mandatory injunction,Whether a higher threshold had to be established where the order sought was neither invasive nor irreversible,Whether serious issue to be tried,Whether damages would be adequate remedy,Whether balance of convenience favouring grant of injunction
Hearing Date30 August 2019,16 August 2019,04 September 2019
District Judge Sheik Umar Bin Mohamed Bagushair:

In DC/SUM 2674/2019, the Plaintiff sought the following interlocutory reliefs against the Defendant: An order that the Defendant, whether acting by himself, his affiliates, servants and/or agents, and/or any entities in which he has an interest in, be restrained from doing the following acts or any of them: Engaging in any action whatsoever and how so ever which may interfere, prejudice, or be contrary to the Plaintiff’s rights and/or interests as the owner of the Login Details; Engaging in any action whatsoever and how so ever which may injure, sabotage, interfere with, prejudice and/or be contrary to the Plaintiff’s business, interests and/or rights; and Enabling, assisting, causing, procuring or authorizing others to do any of the acts aforesaid, An order that the Defendant is to deliver up the Login Details within 7 days; An order that the Defendant, whether acting by himself, his affiliates, servants and/or agents, and/or any entities in which he has an interest in, from carrying out the acts set out in prayer 1 above up till the final disposal of the hearing of the Plaintiff’s present Summons for Injunction application (including any appeal thereto).

The Login Details are defined as the login details to four accounts which the Plaintiff says belongs to it, namely: the Instagram account @saltmagzine.asia; the registrar account in respect of the Plaintiff’s web domain, http://saltmagazine.asia; the email account clmedia@outlook.com; and PayPal account. I will refer to these accounts collectively as the “Accounts”. It is the Plaintiff’s case that it owns the Accounts and that it needs the Login Details to the Accounts for its business, and that the Defendant has wrongfully retained the Login Details.

On 4 September 2019, I allowed the application in part, issued brief grounds and made the following orders: On the Plaintiff’s usual undertaking as to damages, which can be satisfied by paying into Court the sum of $5,000 or the provision of a solicitors’ undertaking for the same amount: The Defendant, whether acting by himself, servants and/or agents, be restrained from doing the following acts or any of them: Engaging in any action whatsoever and howsoever which interferes with, prejudices, or is contrary to the Plaintiff’s interest in the Login Details. An order that the Defendant is to deliver up the Login Details within 7 days. Costs in the cause. Liberty to apply.

Both parties have appealed against my decision.

Background

The Plaintiff was incorporated on 8 February 2017 for the purposes of publishing a gourmet magazine, ultimately called “SALT Magazine” (the “Magazine”). The Magazine was the brainchild of one Mr. Loh Liang Yee (“Mr. Loh”) who was at all times the sole director of the Plaintiff. The Magazine was the Plaintiff’s sole revenue-generating product. The Magazine consists of a print platform and an online platform, though the Plaintiff says that its focus is on the online platform and that it primarily targets the digital and online audience. The Plaintiff also says that the main bulk of its revenue comes from its advertising and events management / public relations services.

The Defendant was involved with the Plaintiff from its incorporation, beginning with an investment of $40,000 in the Plaintiff for a 10% shareholding. The Defendant had assisted the Plaintiff with administration issues, as well as in sourcing for loans and funding. The Plaintiff says that it created its digital presence (in the form of its website or social media accounts) with the help of third parties such as one Ms. Li Cheng and Mr. Jun Xian of Four Media, but that the Defendant was not involved in this process. However, the Plaintiff acknowledges that after the website and social media accounts were set up, the Defendant became involved in the Plaintiff’s business as its “ad-hoc IT administrator.” Curiously, the Defendant did not enter into an employment agreement with the Plaintiff, and he did not receive a salary. Nevertheless, it would appear that the Defendant agreed to be the ad-hoc IT administrator in conjunction with his investment into the Plaintiff. The Defendant’s responsibilities as ad-hoc IT administrator also grew over time. After February 2018, the Defendant more or less had control over the Plaintiff’s social media accounts, and after September 2018 he had control over the Plaintiff’s registrar account for its domain.

The relationship between the parties started falling apart after January 2019 onwards. The source of the unhappiness was unpaid loans that the Defendant had made to the Plaintiff. At that time, the Plaintiff had not yet made a profit, was not doing well financially and badly needed an investor. Sometime in May 2019, the Plaintiff entered into a sale and purchase agreement (“SPA”) with Candid @ Media Pte Ltd (“Candid”) providing for the sale of the Magazine business (which consisted of the print and online platform) to Candid for $28,000. The effect of the SPA was hotly contested by both parties. The Defendant argued that the SPA was a critical piece of evidence establishing that the whole Magazine had in fact been sold and that the Plaintiff therefore had no locus to even seek an injunction. The Plaintiff disputed this. This seemed to be a preliminary issue which the Plaintiff had to overcome and I will return to this later.

The parties’ relationship deteriorated further after the SPA. The Plaintiff brought forth evidence of the Defendant abusing his access to the Login Details to sabotage the Plaintiff’s business – for example, by deleting all of the posts on the Plaintiff’s Instagram account and by disabling access to the Plaintiff’s web domain. The Plaintiff accused the Defendant of changing all the Login Details thereby denying the Plaintiff access to all of the Accounts. The Defendant too made serious allegations against Mr. Loh of various financial misdeeds he committed in his capacity as director the Plaintiff.

The Plaintiff filed this application essentially to compel the Defendant to return the Login Details and to prevent the Defendant from committing further acts that may prejudice the Plaintiff’s business. Although the application was initially filed ex parte (and without notice), the Court directed the Plaintiff to serve the application on the Defendant. The matter thereby proceeded on an inter partes basis, with both parties filing affidavits and written submissions.

There were 4 issues for me to resolve: Whether the Plaintiff had transferred the Magazine to Candid, and if so, whether the Plaintiff had standing to seek the injunction; Whether the Plaintiff established a serious issue to be tried in respect of its causes of action against the Defendant; Should the injunction be refused, whether the Plaintiff’s loss can be compensated in damages; Whether the balance of convenience lay in granting or refusing the injunction.

The law on interim injunctions

The parties did not dispute that the American Cyanamid principles applied. The Plaintiff therefore had to establish a serious issue to be tried and that the balance of convenience lay in its favour in granting an injunction (Challenger Technologies Ltd v Courts (Singapore) Pte Ltd [2015] 5 SLR 679 at [13] (“Challenger Technologies”)). An important consideration in the balance of convenience is the adequacy of damages.

A serious question to be tried is established when the Court is satisfied that the claim is not frivolous or vexatious. This is a low threshold and the prospects of the plaintiff’s success are to be investigated only to a limited extent (Challenger Technologies at [15]-[17]).

As the prayer seeking a delivery up of the Login Details was a mandatory injunction, an issue arose as to whether the test for granting such an injunction was any different. As a starting point, the fundamental principle to bear in mind in an injunction application is that the Court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong at trial in the sense of granting relief to a party who fails to establish his rights at the trial, or of failing to grant relief to a party who succeeds at the trial (Chuan Hong Petrol Station v Shell Singapore (Pte) Ltd [1992] SLR(R) 1 at [88] (“Shell Singapore”)). Whilst this fundamental principle also applies where a mandatory injunction is being sought (Shell Singapore at [88]), given that such an injunction is a more invasive remedy and…may lead to irreversible prejudice to a defendant…[a] court must therefore be sure…that the grant of the interim mandatory injunction is indeed the course of action which carries the lower risk of injustice – in other words, that the prejudice to the applicant from not granting the interim mandatory injunction outweighs that to the defendant from granting it (RGA Holdings International Inc v Loh Choon Phing Robin and anor [2017] 2 SLR 997 at [31] (“RGA Holdings”)).

The Plaintiff’s prayer for the delivery up of the Login Details was a mandatory injunction and arguably a higher threshold had to be met. However, the reason why a higher threshold is required is tied to the fact that a mandatory injunction is ordinarily invasive and can cause irreversible prejudice to the defendant. Where the grant of the mandatory injunction is neither invasive nor results in irreversible prejudice, I am not sure that a higher threshold had to be met before the injunction was granted. I will return to this point later.

Whether the Plaintiff had standing to seek the injunction

The Defendant forcefully argued that the Magazine had been sold by the Plaintiff to Candid and therefore the Plaintiff has no standing to seek an injunction in relation to the Login Details. Instead, the right party to seek the injunction is Candid. The Defendant relied on the following points: The SPA...

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