General Hotel Management (Singapore) Pte Ltd and another v The Wave Studio Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Steven Chong JCA
• Judgment Date: 04 April 2023
• Neutral Citation: [2023] SGHC(A) 11
• Court: High Court Appellate Division (Singapore)
• Docket Number: Civil Appeal Nos 12 of 2022 and 46 of 2022
• Hearing Date: 13 February 2023
• Citation: [2023] SGHC(A) 11
• Year: 2023
• Plaintiff Counsel: Lai Tze Chang Stanley SC, Ramesh Kumar s/o Ramasamy and Edmond Lim Tian Zhong (Allen & Gledhill LLP)
• Defendant Counsel: Mahesh Rai s/o Vedprakash Rai, Yong Wei Jun Jonathan and Samuel Soo Kuok Heng (Drew & Napier LLC) and Llewelyn Gordon Ionwy David, Tan Lin Yin Gladys and Moh Huixian Estelle (David Llewelyn & Co LLC)
• Subject Matter: Intellectual Property,Copyright,Ownership,Licenses,Civil Procedure,Offer to settle
• Published date: 12 April 2023

Steven Chong JCA (delivering the grounds of decision of the court): Introduction

AD/CA 12/2022 (“AD 12”) and AD/CA 46/2022 (“AD 46”) were appeals against the decision of a judge in the General Division of the High Court (the “Judge”) delivered on 16 June 2022, reported as The Wave Studio Pte Ltd and others v General Hotel Management (Singapore) Pte Ltd and another [2022] SGHC 142 (the “GD”).

AD 12 concerned the proper interpretation of a provision in the Copyright Act (Cap 63, 2006 Rev Ed) (the “Copyright Act”) (which has since been repealed) in relation to the commissioning of photographs. The question that was presented to us was: when a client engages a company for a photoshoot, who owns the copyright to the photographs – the client, the company, or the photographer?

Section 30(2) of the Copyright Act provides the default position that the copyright should belong to the “author”, which in the context of photographs, is the photographer. However, that default position can be displaced by s 30(5) of the Copyright Act, which provides that the copyright belongs to the client when the client makes, for valuable consideration, an agreement with another person for the taking of the photographs. In the court below, the Judge held that for the default position to be displaced, the agreement must be made with the actual photographer and the agreement must solely be for the taking of photographs. For reasons explained below, we respectfully disagreed with the Judge on this point. AD 12 was however, ultimately dismissed as the operation of s 30(5) of the Copyright Act can be excluded by agreement. This was the case here, in the light of a validly incorporated provision in the agreement between the parties which reserved the copyright of the photographs to the company engaged for the photoshoot, ie, the respondents.

AD 46 was the appellants’ appeal against the Judge’s award of costs on an indemnity basis. In AD 46, we had to consider whether the respondents’ offer to settle (“OTS”) was a serious and genuine one; and whether the judgment obtained below was not less favourable than the OTS. AD 46 was allowed on the basis that the judgment obtained was in fact less favourable than the OTS.

We heard both appeals on 13 February 2023. AD 12 was dismissed while AD 46 was allowed with brief oral grounds. These are our detailed grounds.

Material background facts

The background facts have been comprehensively set out in the GD at [4]–[18]. We will therefore only highlight the facts pertinent to the appeals.

The parties

The second respondent, Ms Lee Kar Yin (“Ms Lee”), an interdisciplinary artist, creative designer and entrepreneur, set up various business entities for the purpose of carrying out her work in the creative industry (collectively, “Wave”). Wave provided design, branding and marketing services. The first respondent, The Wave Studio Pte Ltd, was incorporated on 1 July 2005 in Singapore. The third respondent, The Wave Studio, LLC, was incorporated as a limited liability company in the United States under the laws of New York. Through a series of assignments effected from 2008 to 2013, the third respondent had the eventual ownership of the intellectual property rights to Wave’s literary and artistic works.

The first appellant was incorporated in Singapore and is a wholly owned subsidiary of the second appellant. The second appellant was a company incorporated in the British Virgin Islands with its principal place of business in Singapore. The appellants were part of the General Hotel Management Group (“GHM”), which managed, operated and promoted luxury hotels and resorts all over the world.

Between 1995 and 2008, GHM engaged Ms Lee, as well as Wave, to provide a range of services to the hotels under its management (collectively, the “Hotels”). Wave was appointed by GHM to provide exclusive “one-stop shop” services, which included comprehensive branding and marketing designs for the Hotels that GHM were managing. At the time when Ms Lee began her working relationship with the appellants, Mr Ralf Ohletz Count von Plettenberg (“Mr Ohletz”), the Executive Vice-President of the appellants until 2010, testified that GHM was “not too concerned with the paperwork” and that their business was done “on a handshake basis”. GHM thus never entered into any formal written contract of service or commissioning contract with Ms Lee.

Production Estimates

From the outset of Wave’s working relationship with the appellants, Wave would, as part of its standard procedure, provide a document referred to as a “Production Estimate” to GHM and the Hotels for its work in respect of the marketing collaterals. Each Production Estimate contained key terms and conditions that governed the work under each purchase order. Ms Lee or the relevant Wave entity would also issue to the Hotels an invoice describing the work done, typically after the provision of the services.

Critically, the Production Estimates contained a clause confirming that any “intellectual property copyright” which arose from Wave’s work on the project is owned by Wave (the “Reservation Clause”). The exact wording of this clause varied over time, though the essence of the clause remained the same. No objections were raised to the Reservation Clause over the 13 years that Wave worked with GHM and the Hotels.

Taking of Hotel Photographs

Hotel photoshoots were included as part of the “one-stop shop” services that Wave was engaged to provide to the Hotels. These were conducted at the premises of various hotels managed by the second appellant or other companies in GHM.

For the photoshoots, Ms Lee engaged two photographers in the following capacities: Mr Masano Kawana (“Mr Kawana”) was sub-contracted by Wave for most of the photoshoots, save for the photoshoot of The Saujana, Kuala Lumpur in 2007. Mr Lim See Kong (“Mr Lim”), an employee of Wave, was involved in the photoshoot for The Saujana, Kuala Lumpur in 2007.

While Mr Kawana and Mr Lim took the raw photographs, Ms Lee was present at each photoshoot and was actively involved in the planning, composition and styling of the photoshoots. After each photoshoot, Ms Lee would commence post-production editing work on the raw images, together with other employees or contractors engaged by Wave. Ms Lee would then conduct a final review to produce a curated collection of photographs appropriate for the respective hotel’s branding and design (the “Hotel Photographs”).

Use of the Hotel Photographs in The Magazine

Sometime in 2012, after the parties’ working relationship had ended, it came to Ms Lee’s attention that some of the Hotel Photographs were featured on the websites of several online travel agencies. Subsequently, between 18 January 2013 and 30 June 2013, Ms Lee discovered that the Hotel Photographs had appeared on 242 instances in Issues 1 to 12 of GHM’s in-house production magazine entitled “The Magazine”, which could be accessed and downloaded via GHM’s website. Issues of The Magazine were also available for download from other websites owned or operated by GHM and copies were distributed to the Hotels managed by GHM and to their guests.

Procedural history

On 31 December 2013, the third respondent commenced an action against the second appellant and other third parties in the United States District Court (the “US Action”) for copyright infringement of the Hotel Photographs. The United States District Court dismissed the third respondent’s claims against the second appellant on the grounds of forum non conveniens and held that Singapore was the natural forum to determine the ownership of the copyright in the Hotel Photographs. The third respondent’s proceedings against the other third parties for copyright infringement of the Hotel Photographs were also stayed pending the resolution of the proceedings in Singapore. Thereafter, on 19 February 2018, the respondents commenced HC/S 175/2018 (“S 175”) against the appellants.

On 5 January 2021, the respondents served on the appellants an OTS which was not accepted. The trial of the action took place over several tranches from September 2021 to March 2022 and on 16 June 2022, the Judge rendered her decision.

Decision below

The Judge found that the ownership of the copyright in the Hotel Photographs belonged to the relevant Wave entity. In order for s 30(5) of the Copyright Act to apply to photographs, the party purporting to rely on it must have made an agreement for valuable consideration with the photographer for the taking of a photograph. Furthermore, the agreement between Wave and the Hotels was not an agreement for the taking of photographs, but was an agreement for Wave to operate as a “one-stop shop” for the Hotels’ branding, design and marketing needs, for which photography was only one function (GD at [50]). The operation of s 30(5) of the Copyright Act was nevertheless excluded by agreement between the parties per s 30(3) of the Copyright Act, as the Hotels had accepted Wave’s reservation of the copyright in the Hotel Photographs by accepting the Reservation Clause in the Production Estimates (GD at [51]). Through a series of copyright assignments over the years, the owner of the copyright of the Hotel Photographs became the third respondent (GD at [93]–[97]).

The Judge found that there was no implied term assigning the copyright in the Hotel Photographs to the Hotels, as the Reservation Clause had been accepted by the Hotels and incorporated into the agreement between the parties. The Reservation Clause was thus an express term of the agreement between the Hotels and Wave. Wave had also included the clause in the Production Estimates issued for the photoshoots and this indicated that they had no intention to assign the ownership of the copyright to the Hotels (GD at [107]–[108]). There was also no implied assignment of copyright to the second appellant (GD at [111]) or implied licence granted...