OMG Holdings Pte Ltd v Pos Ad Sdn Bhd

CourtCourt of Appeal (Singapore)
JudgeChao Hick Tin JA
Judgment Date20 July 2012
Neutral Citation[2012] SGCA 36
Citation[2012] SGCA 36
Hearing Date04 May 2012
Subject MatterCivil Procedure,Limitation of Actions,Restitution,Unjust enrichment,Particular causes of action,Pleadings
Plaintiff CounselPradeep Pillai and Debby Lim (Shook Lin & Bok LLP)
Published date30 July 2012
Defendant CounselDaniel Koh and Nadia Binte Ibrahim (Eldan Law LLP)
Docket NumberCivil Appeal No 152 of 2011
Date20 July 2012
Chao Hick Tin JA (delivering the grounds of decision of the court): Introduction

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, inter alia, first, that the appellant should not be allowed to retain the royalties collected during the period between 22 April 1999 and 1 July 2002 as it did not then have any rights to sub-license; and, second, that cl 9.3 of an agreement dated 1 July 2004 between the parties (“the 2004 Agreement”) was in restraint of trade (see OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2011] SGHC 246 (“the Judgment”)). The appellant appealed against the aforementioned rulings.

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 dispute

The 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 (ie, between 22 April 1999 and 1 July 2002; hereinafter referred to as the “interim period”), the appellant continued to license the respondent to use the Licensed System and the respondent continued to make royalty payments to the appellant in accordance with the rates provided in the 1993 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: SHELFVISION TAKE-ONE SHELF VISION INSTANT COUPON MACHINE SHELF TELEVISION (PRIME CHANNEL) PRIME VISION INFO VISION FREEZER VISION TROLLEY/CARTVISION SHELF BANNER ANY ACTMEDIA PRODUCT APPLICATION RELATING TO THE 5 SENSES ANY NEW PRODUCTS THAT IS [SIC] DEVELOPED BY THE LICENSOR DURING THE TERMS OF THIS AGREEMENT

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 innovative concept of using the “5 senses” in relation to in-store advertising. The knowledge, methodology and know-how for in-store advertising and sales strategies and in implementing the Licensed Products to achieve maximum benefit for marketers and retailers; Services to train and support the Plaintiffs’ licensees with techniques and with new Licensed Products developed by the Plaintiffs from time to time during the term of [the 2004 Agreement]; and Services to engage retailers and/or marketers, on behalf or in tandem with the Plaintiffs’ licensees. The use of distinctive shelf-mounting brackets and other shelf-mounting brackets perpendicularly holding a mounted advertisement boarding that engages 1 or more of a consumer’s senses brand-framed electronic LCD/TV advertisements displays, shelf-mounted sample dispensers, trolley mounted advertisements, and other customized materials supplied in connection with [the 2004 Agreement].

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).


The 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: that it has “significant goodwill in the Licensed Products and Licensed System … in Asia which are used in the in-store marketing of consumer package goods in supermarkets, hypermarkets, personal care stores and mass-merchandisers more particularly described in Schedule A of [the 2004 Agreement]. The Licensed Products and [the Licensed System] have been in use in Asia and currently in use in inter alia Singapore, Malaysia, Thailand, Phillipines, Hong Kong and Taiwan”; and that the respondent expressly acknowledged the above in the 2004 Agreement.

The respondent pleaded the following in its Defence and Counterclaim (Amendment No 2) in relation to the issues on appeal: it denied that the appellant has goodwill in the Licensed Products and Licensed System; and it asserted that cl 9.3 of the 2004 Agreement is unlawful in its operation as an unreasonable restraint of trade, in particular: the phrase “anything resembling or similar to the said system” constitutes an unreasonable restraint of trade, restricting the respondent’s freedom to make use of any other products resembling or similar to the Licensed System upon termination of the 2004 Agreement; and cl 9.3 exists in perpetuity and on a worldwide basis.

Decision below

The Judge allowed the appellant’s claim in relation to the royalty payments outstanding up to 3 March 2009 (but not for royalties accrued post-termination for the period between 3 March 2009 and 3 May 2009), which amounted to RM 1,161,253.45. However, the Judge found that the plaintiff did not have any rights to the Licensed System which it could sub-license during the interim period. It was undisputed that a total of RM 840,236.49 was paid by the respondent to the appellant during the interim period (applying the same rates of payment as provided under the 1993 Agreement). Consequently, the Judge ordered the appellant to return to the respondent the royalties paid during the interim period. Accordingly, the respondent was ordered to pay to the appellant a total of RM 321,016.96.

The remainder of the appellant’s claim and the respondent’s counterclaim was dismissed.

Issues before the court

In 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...

To continue reading

Request your trial
25 cases
  • Abani Trading Pte Ltd v BNP Paribas and another appeal
    • Singapore
    • High Court (Singapore)
    • 6 d5 Junho d5 2014
    ...had been caused to Abani. To support its position, BNP referred to the Court of Appeal decision of OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] 4 SLR 231, where it was held at [18] that the court may permit an unpleaded point to be raised provided that it does not cause injustice or irrepar......
  • Esben Finance Ltd and others v Wong Hou-Lianq Neil
    • Singapore
    • Court of Appeal (Singapore)
    • 10 d1 Janeiro d1 2022
    ...[2013] 2 SLR 1200 (“eSys”), doubt appears to have been cast on the position in De Beers (CA) in OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] 4 SLR 231 (“OMG Holdings”), where it was suggested that a claim in restitution “could well be time-barred under [s 6] of the Limitation Act” [emphasis......
  • Allenger, Shiona (trustee-in-bankruptcy of the estate of Pelletier, Richard Paul Joseph) v Pelletier, Olga and another
    • Singapore
    • High Court (Singapore)
    • 22 d2 Dezembro d2 2020 the respondent could be adequately compensated with costs (see the decisions of this court in OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] 4 SLR 231 at [18] and Sun Jin Engineering Pte Ltd v Hwang Jae Woo [2011] 2 SLR 196 at [20]). The second objection raised was that the Plaintiff did n......
  • EFT Holdings, Inc. v Marinteknik Shipbuilders (S) Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 11 d2 Dezembro d2 2012
    ...OBG Ltd v Allan [2008] 1 AC 1 (refd) Ocean Frost, The [1985] 3 WLR 640; [1985] 1 Lloyd's Rep 1 (refd) OMG Holdings Pte Ltd v POS Sdn Bhd [2012] 4 SLR 231 (refd) Quah Kay Tee v Ong and Co Pte Ltd [1996] 3 SLR (R) 637; [1997] 1 SLR 390 (refd) Revenue and Customs Commissioners v Total Network ......
  • Request a trial to view additional results
6 books & journal articles
  • Litigation
    • United Kingdom
    • Construction Law. Volume III - Third Edition
    • 13 d1 Abril d1 2020
    ...being amended after the trial has concluded: Dare v Pulham (1982) 148 CLR 658 at 664, and see also OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] SGCA 36 at [18]. hat, however, is generally undesirable: London Passenger Transport Board v Mosscrop [1942] AC 332. 237 See Gould v Mount Oxide Min......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2013, December 2013
    • 1 d0 Dezembro d0 2013
    ...Management Corporation Strata Title Plan No 473 v De Beers Jewellery Pte Ltd[2002] 1 SLR(R) 418 and OMG Holdings Pte Ltd v Pos Ad Sdn Bhd[2012] 4 SLR 231 in connection with restitutionary claims. Detailed examination of those reservations falls within the ambit of the law of unjust enrichme......
  • Restitution
    • Singapore
    • Singapore Academy of Law Annual Review No. 2013, December 2013
    • 1 d0 Dezembro d0 2013
    ...purpose of the Limitation Act) and Singapore law (which does not) noted in its earlier decision in OMG Holdings Pte Ltd v Pos Ad Sdn Bhd[2012] 4 SLR 231 (‘OMG Holdings’, discussed in (2012) 13 SAL Ann Rev 407 at 416–417, paras 22.27–22.30). Without taking a decisive view, the court in eSys ......
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2012, December 2012
    • 1 d6 Dezembro d6 2012
    ...granted to the appellants to amend their pleadings. Order on an issue that was not pleaded 8.50 In OMG Holdings Pte Ltd v Pos Ad Sdn Bhd[2012] 4 SLR 231, the Court of Appeal held that the judge below was not entitled to make an order on an issue that was not pleaded or canvassed at the tria......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT