M2B World Asia Pacific Pte Ltd v Matsumura Akihiko

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 06 November 2014
• Neutral Citation: [2014] SGHC 225
• Plaintiff Counsel: Tang Gee Ni (G N Tang & Co)
• Docket Number: Suit No 944 of 2013 (Registrar’s Appeals Nos 41 and 45 of 2014)
• Date: 06 November 2014
• Hearing Date: 07 March 2014
• Subject Matter: Summary Judgment,Civil Procedure
• Year: 2014
• Citation: [2014] SGHC 225
• Defendant Counsel: Zheng Sicong (Rajah & Tann LLP)
• Court: High Court (Singapore)
• Published date: 12 November 2014

Judith Prakash J: Introduction

The claim in the present proceedings arises out of a purported oral agreement between M2B World Asia Pacific Pte Ltd (“the Plaintiff”) and Mr Matsumura Akihiko (“the Defendant”). The Defendant had allegedly agreed to secure advertising contracts worth at least US$10m annually for the Plaintiff’s new web-based television channel in return for an annual commission of US$1m. No advertising contracts materialised. In April 2010, the Plaintiff sent the Defendant a letter of demand claiming the return of US$1m it said it had paid him as advance commission. The Defendant denied liability.

On 16 October 2013, the Plaintiff commenced this action. The Plaintiff pleaded that at its request, on 24 October 2007, Central Point Co Ltd (“Central Point”) had paid US$1m to the Defendant on its behalf as advance payment of the commission payable under the oral agreement. The Plaintiff claimed repayment of that sum for total failure of consideration. On 18 December 2013, the Plaintiff took out a summary judgment application (Summons No 6467 of 2013 (“Sum 6467/2013”)) pursuant to O 14 r 1 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“ROC”). The Defendant resisted the summary judgment application on the basis that there were triable issues arising from his contention that there was never any oral agreement as alleged.

Sum 6467/2013 was heard by an Assistant Registrar (“the AR”) on 29 January 2014. The AR granted the Defendant leave to defend the action on the condition that the Defendant provided a banker’s guarantee for the sum of $100,000. Subsequently the parties filed cross-appeals against the AR’s decision.

I heard both appeals on 7 March 2014. I dismissed the Defendant’s appeal but allowed the Plaintiff’s appeal. The Defendant has since filed an appeal against my decision.

Background

The Plaintiff is a Singapore incorporated company whose business involves, among other things, the provision of internet entertainment content. In connection with this business, the Plaintiff created WOWtv, a web-based television channel.

In or around July 2007, the Defendant was asked to help the Plaintiff secure advertisement contracts for WOWtv so as to generate advertising revenue for the Plaintiff. The Plaintiff claimed that one of its directors, Mr Torisawa Sakae (“Mr Sakae”), was its sole point of contact with the Defendant. The Defendant, however, claimed that he was approached by Mr Sakae and Mr Eddie Lim (“Mr Lim”), a shareholder of the Plaintiff. The significance of this fact will become apparent in the course of these grounds of decision. It ought to be pointed out that Mr Sakae and the Defendant had been acquainted with each other since 2002. The Defendant was a director of Transcu Ltd, of which Mr Sakae was also a director from 23 April 2007 until his resignation on or about 24 April 2008.

The Plaintiff and the Defendant gave varying accounts of what transpired after the Defendant’s help was sought. I set out their cases below.

Plaintiff’s Account

The Plaintiff claimed that the Defendant mentioned that he knew the senior management of Dentsu Co Ltd (“Dentsu”), a large and well-known advertising agency. The Defendant told Mr Sakae that he was confident that he would be able to obtain Dentu’s commitment to annually channel advertising contracts worth over US$10m to the Plaintiff. In or around October 2007, the Plaintiff and the Defendant reached an oral agreement for the Defendant to get Dentsu to channel at least US$10m worth of advertising contracts to WOWtv annually in exchange for which the Plaintiff agreed to pay the Defendant US$1m in commission annually (“the Agreement”).

Subsequently, the Defendant asked the Plaintiff for advance payment of the commission payable under the Agreement with the promise that if the Defendant failed to deliver on his aforementioned obligation under the Agreement, he would refund the Plaintiff the full commission paid. Relying on this undertaking, the Plaintiff effected payment of US$1m to the Defendant’s Credit Agricole (Suisse) SA account on or about 24 October 2007. The payment was made through Central Point. The Plaintiff exhibited bank debit and credit statements to evidence this transfer.

Thereafter, the Defendant introduced Mr Sakae to the then Senior Managing Director of Dentsu, Mr Haruyuki Takahashi (“Mr Takahashi”). Mr Takahashi arranged meetings for Mr Sakae in Dentsu’s Shanghai and Beijing offices in a bid to help the Plaintiff procure advertising for WOWtv. However, these meetings came to nought and Dentsu did not award a single advertising contract to WOWtv.

Defendant’s Account

There are a number of permutations of the Defendant’s case. The common elements in the various permutations are that (a) there was no agreement between the Plaintiff and the Defendant as alleged by the Plaintiff; and (b) the sum of US$1m that was paid to the Defendant on or about 24 October 2007 was received by him on behalf of a third party. At this juncture, I will simply set out the final version of the Defendant’s case as it was presented before me.

The Defendant claimed that Mr Sakae and Mr Lim approached him sometime during or around July 2007, seeking his assistance to secure advertising revenue for WOWtv. Mr Sakae and Mr Lim asked if he had any business contacts within Dentsu. The Defendant did not personally know anyone within Dentsu. However, he introduced Mr Sakae and Mr Lim to his close business partner of more than 30 years, Mr Kunio Kubota (“Mr Kubota”), who was personally acquainted with Mr Takahashi. The Defendant also requested Mr Kubota to explore the possibility of setting up a meeting between Mr Sakae, Mr Lim and Mr Takahashi. Mr Kubota acceded. The Defendant was present only for the first of a series of meeting between these parties. The Defendant claimed that he helped to set up the meeting, “as a personal favour to [Mr Sakae] and entirely on a gratuitous basis”. He denied ever agreeing to obtain Dentsu’s commitment to annually channel advertising contracts worth over US$10m to the Plaintiff in return for commission.

The Defendant also claimed that he did not receive any money from the Plaintiff. He did not deny that US$1m was credited to his Credit Agricole (Suisse) SA account from Central Point. He claimed that the money in fact came from Mr Lim. He asserted that the Plaintiff had been unable to provide any evidence to show that Central Point had disbursed money on behalf of the Plaintiff despite his expressly disputing that the money had come from the Plaintiff.

The Defendant’s explanation as to why Central Point had transferred US$1m to him is as follows. He claimed that Mr Lim wanted to pay Mr Kubota US$1m to: Reward Mr Kubota and Mr Takahashi so that they would continue to assist the Plaintiff to conclude a deal with Dentsu; and Reimburse Mr Kubota and Mr Takahashi for the substantial expenses they had incurred in introducing Mr Lim to Dentsu’s subsidiaries in Shanghai, Beijing, and Taipei. The expenses included travel and entertainment expenses incurred over the course of more than twenty trips.

However, it was “logistically inconvenient” for Mr Kubota to receive the money in Singapore because he did not have any bank accounts outside Japan. Moreover, payment to Mr Kubota’s bank account in Japan would have involved “cumbersome procedures due to Japan’s foreign exchange controls”. At this time, Mr Kubota owed the Defendant US$1.45m. The Defendant exhibited copies of “IOUs” to evidence Mr Kubota’s debt. Mr Kubota suggested that the Defendant receive the money from Mr Lim and retain it, in part satisfaction of the outstanding loan that he owed the Defendant. It was for this reason that the Defendant agreed to receive the money from Mr Lim. The Defendant maintained that it was Mr Lim and not the Plaintiff who transferred the money to him and that the money was not meant to be advance payment of commission under the Agreement.

Parties’ submissions

The Plaintiff argued that its version of events should be preferred over the Defendant’s because the Defendant’s version was unsubstantiated and had changed several times. It maintained that the Defendant had no defence to its claim and, as such, it should be granted summary judgment. The Defendant on the other hand stated that his version of events raised triable issues and that there was a “litany of factual disputes” between the parties as to whether the Agreement was formed. Therefore, he argued that he should be granted unconditional leave to defend.

The Law

The legal principles governing an application for summary judgment are well known. To obtain judgment, the plaintiff first has to show that he has a prima facie case for summary judgment. If he fails to do that, his application ought to be dismissed. However, once the plaintiff shows that he has a prima facie case, the burden shifts to the defendant who, in order to obtain leave to defend, must establish that there is a fair or reasonable probability that he has a real or bona fide defence: see, for example, Ritzland Investment Pte Ltd v Grace Management & Consultancy Services Pte Ltd [2014] 2 SLR 1342 (“Ritzland”) at [43]–[47].

In Ritzland, it was clarified that it is the tactical burden and not the evidential or legal burden that shifts to the defendant.

The defendant need only show that there is a triable issue or question or that for some other reason there ought to be a trial: Singapore Civil Procedure, vol 1 (Sweet & Maxwell, 2013) at para 14/4/5 (“Singapore Civil Procedure”). A court would not grant leave to defend if all the defendant provides is a mere assertion, contained in an affidavit, of a given situation which forms the basis of his defence: Prosperous Credit Pte Ltd v Gen Hwa Franchise International Pte Ltd [1998] 1 SLR(R) 53 at [14]. The following statement from Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 is also instructive:

Under an...