OMG Holdings Pte Ltd v Pos Ad Sdn Bhd
Jurisdiction | Singapore |
Judge | Chao Hick Tin JA |
Judgment Date | 20 July 2012 |
Neutral Citation | [2012] SGCA 36 |
Plaintiff Counsel | Pradeep Pillai and Debby Lim (Shook Lin & Bok LLP) |
Date | 20 July 2012 |
Docket Number | Civil Appeal No 152 of 2011 |
Hearing Date | 04 May 2012 |
Subject Matter | Civil Procedure,Limitation of Actions,Restitution,Unjust enrichment,Particular causes of action,Pleadings |
Year | 2012 |
Citation | [2012] SGCA 36 |
Defendant Counsel | Daniel Koh and Nadia Binte Ibrahim (Eldan Law LLP) |
Court | Court of Appeal (Singapore) |
Published date | 30 July 2012 |
By an action in the High Court, OMG Holdings Pte Ltd (“the appellant”) sued Pos Ad Sdn Bhd (“the respondent”) for arrears of royalty payments pursuant to a sub-licensing agreement. The trial judge (“the Judge”) held,
After hearing the submissions of both parties, we allowed the appeal only in relation to the issue of royalties collected during the period between 22 April 1999 and 1 July 2002. We now give our reasons.
Facts Parties to the disputeThe appellant is a Singapore incorporated company that provides in-store advertising programs and products. The appellant was the licensor of a system known as the ActMedia system (“the Licensed System”) for Singapore, Indonesia, Philippines, Thailand, Malaysia and Hong Kong. The appellant had acquired the exclusive right to use the Licensed System within the aforementioned countries through a master licence agreement (“the Master Licence Agreement”) which it had entered into with ActMedia Canada Inc (a Canadian company which developed the Licensed System) on 30 June 1993. In return, the appellant paid ActMedia Canada Inc a royalty fee every quarter for this licence.
The respondent is a Malaysian incorporated company which provides advertising media services to various brand owners for the marketing of their products in supermarkets across Malaysia. The appellant sub-licensed its right to the exclusive use of the Licensed System to the respondent pursuant to a sub-licence agreement dated 1 July 1993 (“the 1993 Agreement”).
Background to the dispute The Master Licence Agreement between the appellant and ActMedia Canada Inc was terminated on 22 April 1999. Consequently, on 28 June 2000, the appellant and the respondent entered into a Surrender of Licence Agreement (“the Surrender Agreement”) which provided that the 1993 Agreement was surrendered (effective 22 April 1999) following the termination of the Master Licence Agreement between ActMedia Canada Inc and the appellant. The 1993 Agreement was later replaced with another agreement dated 1 July 2002 (“the 2002 Agreement”); this agreement was varied twice by two addenda signed by the parties on 13 May 2003 and 28 January 2004 respectively. During the period between the termination of the Master Licence Agreement (which led to the execution of the Surrender Agreement) and the entry into the 2002 Agreement (
Upon the expiry of the 2002 Agreement on 30 June 2004, the parties entered into the 2004 Agreement. Under the 2004 Agreement, the respondent was to pay to the appellant royalties amounting to 7% of the former’s gross revenue generated from use of the Licensed System and associated products. Of especial relevance is cl 9.3 of the 2004 Agreement, which stated:
Upon the termination of this Agreement, the Licensee shall return to the Licensor copies of all manuals or similar written materials regarding the Licensed System furnished to the Licensee hereunder. Upon any such termination, the Licensee shall retain no rights to the Licensed System or any part thereof, all such rights having been deemed to have been surrendered to the Licensor.
For the avoidance of doubt, the Licensee hereby agrees that upon termination of this Agreement, it will refrain from making use of the Licensed System, or any part thereof, or anything resembling or similar to the said system. [emphasis added]
The “Licensed System” was defined in Recital 2 of the 2004 Agreement as:
the Name, Licensed Marks and Licensed Products.
“Licensed Marks” was defined in Recital 1 of the 2004 Agreement as “various logos and intellectual property”. The “Name” was not defined. “Licensed Products” was defined at Schedule A to the 2004 Agreement as including the following:
The appellant provided the following particulars of the Licensed System and Licensed Products (at paras 8A.i-8A.v of the Statement of Claim (Amendment No 2)):
The appellant terminated the 2004 Agreement on 3 March 2009 on account of the respondent’s failure to pay RM 967,753.45 in royalties (as at 31 December 2008).
PleadingsThe appellant initiated legal proceedings against the respondent for (a) arrears of outstanding royalty payments for the period between December 2007 and December 2008 under the 2004 Agreement, which as at 31 December 2008 amounted to RM 967,753.45; (b) an account of all revenue received and profit generated from the respondent’s breach of cl 9.3 of the 2004 Agreement; (c) an injunction to restrain the respondent’s use of the products/copies of the products pertaining to the 2004 Agreement; and (d) inverse passing off.
In response, the respondent counterclaimed for (a) damages for fraudulent misrepresentation and rescission of the 2004 Agreement, alleging that the appellant had made various pre-contractual misrepresentations in relation to the agreements signed in 1993, 2002 and 2004; (b) return of the royalties paid from 2003 to 2007 on the basis that, first, the 2004 Agreement was wrongfully terminated and the appellant had failed to inform it that the Master Licence Agreement had been terminated on 22 April 1999, and, second, that the Surrender Agreement was erroneously prepared and imprecise; and (c) a declaration that cl 9.3 of the 2004 Agreement constituted an unreasonable restraint of trade and was therefore invalid.
The appellant pleaded the following in the Statement of Claim (Amendment No 2) in relation to the issues on appeal:
The respondent pleaded the following in its Defence and Counterclaim (Amendment No 2) in relation to the issues on appeal:
The Judge allowed the appellant’s claim in relation to the royalty payments outstanding up to 3 March 2009 (but
The remainder of the appellant’s claim and the respondent’s counterclaim was dismissed.
Issues before the courtIn these grounds we intend to address only the issue of the Judge’s ruling that the royalties paid during the interim period should be returned by the appellant to the respondent. The other...
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