LTT Global Consultants v BMC Academy Pte Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 01 April 2011
• Neutral Citation: [2011] SGHC 80
• Date: 01 April 2011
• Docket Number: Suit No 230 of 2008
• Published date: 13 April 2011
• Plaintiff Counsel: Ranjit Singh (Francis Khoo & Lim)
• Hearing Date: 31 August 2010,10 November 2010,01 September 2010,30 August 2010
• Defendant Counsel: Edmond Pereira (Edmond Pereira & Partners)
• Court: High Court (Singapore)
• Subject Matter: Contract

Judith Prakash J: Introduction

This is an action for breach of contract. The plaintiff is a sole proprietorship in Malaysia and has its registered address in Kuala Lumpur. At all material times in its dealings with the defendant, the plaintiff was represented by one Dr Siva Ananthan (“Dr Siva”) who is its chief executive officer. Dr Siva is also the brother of the proprietor of the plaintiff firm.

The defendant is a company incorporated in Singapore and carries on business under the name BMC Academy which is the name used in this action. The defendant provides educational services and runs seven centres in Singapore which offer various educational programmes including professional courses such as those leading to the degree of Bachelor of Laws (“LLB”). One of these centres is located in Dhoby Ghaut (“the Dhoby Ghaut centre”).

The defendant set up its LLB programme in 2005 (“the LLB programme”) and operated the same from the Dhoby Ghaut centre. In August 2007, the defendant entered into a contract with the plaintiff which provided for the parties to collaborate in the delivery of the LLB programme to students enrolled with the defendant. This contract was prematurely terminated sometime in September 2007 and it is the plaintiff’s case that the defendant is liable to it for breach of contract. The defendant on the other hand contends that it was the plaintiff that was in breach and therefore cannot maintain this claim against it.

The background

Dr Siva holds an LLB degree from the University of London (1985) and a doctoral degree which he obtained in Human Behaviour (Leadership) in 1992 from La Jolla University, San Diego, USA. Since 1986, Dr Siva has been a law teacher and at one time he ran his own private law school in Malaysia. After selling the school, he joined the plaintiff which provides services as a consultant on education and learning.

Dr Siva first learned of the defendant’s LLB programme in about 2006. He then contacted the defendant to enquire if it required any consultancy services to help it expand its LLB programme. A meeting with two of the defendant’s directors took place but the discussions did not lead to any agreement as the defendant did not require the plaintiff’s services at that time.

The parties contacted each other again in June 2007. Dr Siva met Mr Shaik Mohamed Maricar s/o SM Mohamed Osman Maricar (“Mr Shaik Maricar”), the founder of the defendant and its chairman and chief executive officer, and his wife, Mrs Khatijah Phua Anne, who is also a director of the defendant and its general manager. The meeting took place at the Dhoby Ghaut centre. Dr Siva was shown around the premises and the parties had fruitful discussions. Mr Shaik Maricar was desirous of employing Dr Siva as a law lecturer for the defendant as most of its lecturers had left. Dr Siva, however, made it clear that he was not interested in being an employee and that the plaintiff was in the business of providing overall academic support and worked on a profit sharing model with its clients.

The written contract between the parties was signed on 17 August 2007. It was drafted by Dr Siva and amended before signature by Akbar Sharif Maricar (“Mr Akbar Maricar”), the defendant’s director of operations and the son of Mr Shaik Maricar. This document was entitled “Collaboration Agreement relating to LLB Degree Program, Other Undergraduate & Post Graduate Degree Programs” (“the agreement”). Its preamble noted that the plaintiff had the expertise to conduct and deliver the LLB programme of the University of London and other undergraduate and post graduate programmes and that the parties would work collaboratively in the delivery of such programmes to students in Singapore.

Among the material terms of the agreement were the following. First, it was provided (cl 9.1) that the agreement would come into force on the Commencement Date and would continue in force for a period of five years from that date and thereafter continue for further periods of five years. The term “Commencement Date” was defined (cl 1.1) as being:

[T]he start date of the responsibilities which starts when the necessary approval from the Ministry of Education in the case of a teaching licence and the Ministry of Manpower in the case of an employment pass both applications for Dr Siva Anathan [sic] to effectively engage his services to begin this cooperation and need not be the signature date of the agreement;

Second, Part B of the agreement which was headed “The Nature of the Academic Collaboration, the Learning Experience and Responsibilities of the Parties”, set out the various responsibilities of the plaintiff (identified therein as LTT) and of the defendant (described therein as BMC) as follows: 2 Responsibilities of BMC 2.1 BMC shall provide premises and have the necessary approvals for the programme to be conducted in Singapore and provide the following services: 2.1.1 handling student enquiries pertaining to the Programmes under this Agreement; 2.1.2 recruiting, selecting and admitting students into the Programmes such that student shall be eligible for admission as students on a Programme in accordance with eligibility criteria agreed with LTT from time to time; 2.1.3 the registration of students at BMC; 2.1.4 managing the marketing and publicity for Programmes under this Agreement; 2.1.5 providing all learning resources required for the delivery of the course in accordance with the criteria agreed with LTT; 2.1.6 collecting any fees charged to students on Programmes from time to time; 3 Responsibilities of LTT 3.1 LTT shall provide the overall academic support for the programme and the following services: 3.1.1 managing the course delivery for the Programmes, including teaching, course development, student administration and quality assurance; 3.1.2 ensuring that Dr Siva Ananthan shall be personally involved as Head of the LLB department at BMC and shall be directly involved in the teaching and delivery of the lectures. 3.1.3 providing the students in the Programmes with appropriate access as may be agreed between the parties from time to time to materials specially developed by LTT and use of LTT’s intellectual property; 3.2 LTT shall be accountable for ensuring for [sic] the quality and standard of all Programmes and awards offered or made in its name which are provided for under this collaborative arrangement. 3.3 All expenses incurred with regard to obtaining a teaching permit and an employment pass for Dr Siva Ananthan shall be borne by LTT.

Part C of the agreement contained the arrangements for fees and payment. Clause 4.1 provided that the plaintiff should have the right to inspect the receipt books and accounting records of the defendant in relation to the collaborative programmes at any time. Clauses 4.2 and 4.3 dealt with payment to the plaintiff for its services and stated that these were to be as set out in Schedule 1. Clause 8.1 obliged the defendant to keep supporting documents containing all data required for the provision of services under the agreement and to allow the plaintiff to inspect the same upon giving reasonable notice.

Turning to Schedule 1, the defendant agreed to pay the plaintiff, in respect of students studying at the defendant’s centre for programmes run and delivered by the plaintiff, as follows: the plaintiff was entitled to 30% of all fee revenues collected including registration fees as long as Dr Siva taught a minimum of four subjects at any time in respect of the LLB programme; the balance of the revenue was to be shared by the plaintiff and the defendant on a 50-50 profit-sharing basis; sub-clause 1(iii) listed the items of expenditure that could be deducted from revenue for the purpose of calculating profit; under cl 2, the defendant was obliged on “a bi-monthly basis” to forward to the plaintiff an account of fees collected from students and on that basis, the plaintiff would send an invoice to the defendant. The payment was to be made within two days of receipt of the invoice; and further, adjustments in terms of new student enrolments and withdrawals was to be “made on a weekly basis” thereafter.

From August 2007 onwards, Dr Siva conducted several “free preview classes” to publicise the LLB programme. One of the disputes between the parties is as to duration of the “free preview classes”. During this period, Dr Siva informed the defendant that it required a better and larger law library in order to obtain recognition of the programme from the University of London. The defendant subsequently made two payments of $10,000 each to Dr Siva. Both parties agree that the first payment was made for the purchase of law books on behalf of the defendant. In regard to the second payment, the defendant says that this was also to buy law books but the plaintiff says that the second payment was part payment of moneys owing to the plaintiff from the fees collected.

On 3 September 2007, the Ministry of Education (“MOE”) gave permission to the defendant to employ Dr Siva as a teacher to teach specified legal subjects in the LLB programme, subject to Dr Siva having obtained a valid work pass from the Ministry of Manpower (“MOM”). On the same day, the MOM issued an “In-Principle Approval Letter for Employment Pass” by which it approved the issue of an employment pass for Dr Siva for a period of 24 months. The letter also provided, inter alia, that: the In-Principle Approval was valid for six months from the date of the letter and if the Employment Pass was not collected by Dr Siva within that period, the application would be regarded as withdrawn; the In-Principle Approval allowed Dr Siva to commence employment for a period of one month from the date of the letter; and in order to collect the Employment Pass, Dr Siva had to undergo a medical examination and produce a satisfactory medical report.

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