Pub 1997 Pte Ltd v Scorpion and Others

• Judge: Lim Teong Qwee JC
• Judgment Date: 23 February 1994
• Neutral Citation: [1994] SGHC 41
• Citation: [1994] SGHC 41
• Defendant Counsel: Savliwala Din (Harry Elias & Pnrs)
• Published date: 19 September 2003
• Plaintiff Counsel: Ng Soon Kai and Lisa Theng (Colin Ng & Pnrs)
• Date: 23 February 1994
• Docket Number: Suit No 108 of 1994 (Summons in Chambers No 457 of 1994)
• Court: High Court (Singapore)
• Subject Matter: Personal contracts,No evidence shown that ambiguity in term could be resolved,Covenant preventing employee from working for competitor,Whether term void for uncertainty,Plaintiff's option to extend,Enforcement of negative covenant,Contractual terms,Defendants' loss incalculable if injunction granted,Contract to engage band to perform at club,Plaintiff's loss recoverable by damages if injunction not granted,Injunctions,Enforceability of plaintiff's option to extend,Contract,Enforceability,Interlocutory injunction,Contract for personal services,Civil Procedure,Whether effectively compelling defendants to work for plaintiffs,Balance of convenience

The writ issued in this action is indorsed with a claim for:

(1) an injunction restraining the first defendant without the consent of the plaintiff from rendering his services as a singer, musician or in any other capacity as a performing artiste for anyone other than the plaintiff in Singapore for a period of nine months commencing from 1 February 1994 in breach of an agreement in writing entered into between the plaintiff and the first defendant dated 5 April 1993; and

(2) an injunction restraining the second, third, fourth and fifth defendants and each of them without the consent of the plaintiff from rendering their or his services as a singer, musician or in any other capacity as a performing artiste for anyone other than the plaintiff in Singapore for a period of nine months commencing from 1 February 1994 in breach of an agreement in writing entered into between the plaintiff and the second, third, fourth and fifth defendants dated 5 April 1993;

and for damages for breach of contract and other relief. The plaintiff applied for interlocutory injunctions in the same terms.

The plaintiff is a private company with a paid up capital of $50,000 carrying on business as proprietor of a `Canto pop` club at the International Building in busy Orchard Road. A `Canto pop` club as the name implies is a night club where the patrons are entertained by musicians performing Cantonese popular music. The plaintiff commenced business in October 1992 and engaged the defendants. The first defendant is a singer performing under his own name and the other defendants play instruments in a band called the `Fantasy`. The first defendant and the `Fantasy` have performed together since 1987 but the fifth defendant was not a member of the `Fantasy` until 1989. A contract was signed between the plaintiff and the first defendant and another between the plaintiff and the other defendants. It was for one month from 9 October 1992. When the contract came to an end in November 1992 the defendants continued to perform for the plaintiff without any formal arrangements in writing. On 5 April 1993 two new contracts were signed. One was between the plaintiff and the first defendant and the other between the plaintiff and the other defendants. Both are identical in material respects. These are the agreements in writing referred to in the writ. They are also identical with the contracts signed in 1992 except in two respects which will be referred to later.

Clause 2 of the 1993 contract provides:

That the period of the artiste`s engagement shall be from 27 April 1993 to 31 January 1994.

It is for nine months and five days. The remuneration is expressed to be payable by the month and the defendants have one off day a month.

On 3 September 1993 the defendants wrote a joint letter to Dennis Foo, the managing director of the plaintiff, which begins with this sentence `It was a most difficult and hard decision on our part that we have to say goodbye.` It meant and was understood by the plaintiff to mean that the defendants would not continue to perform for the plaintiff after 31 January 1994. This prompted Foo to write back a letter dated 9 September 1993 which includes this paragraph:

When I confirmed the rumours on your offer from a new competitor, I had highlighted the above again and emphasized the importance of your band to the club. I had also indicated that the club would extend its option on the contract and would match the higher fees you have been offered even though there is no necessity to do so. Please take this as a formal notice from the company to exercise the option.

This was a reference to cl 10 which provides:

Notwithstanding the contract tenor stipulated under cl 2, the company reserves the right to terminate or extend this contract on similar terms and conditions at any time subject to one month`s prior notice given to the artiste.

This clause has clearly been taken from cl 11 in the 1992 contract but with the addition of the words `or extend ... on similar terms and conditions`. Clause 11 provides:

That throughout the duration of this contract, the artiste shall not render any public performance or be engaged by other club or outlets without the prior approval of the company.

The 1992 contract does not contain this provision. The defendants say that they are not bound by the provision as to the right to extend the contract as the contracts were prepared by the plaintiff and it had been represented to them that it would be the same standard form contracts they had signed previously. They also say that the provision for extension is void for uncertainty.

On 19 May 1993 the defendants as a musical group called `Fantasy` signed a contract to perform for Nova Management Pte Ltd (`Nova`), another company with a `Canto pop` club business, for six months from 15 February 1994 with an option for a further period of six months at an increased remuneration but the plaintiff was not told of this. The contract was shown to the plaintiff only in November 1993. The plaintiff`s letter of 9 September 1993 purporting to exercise the right to extend the contract did not say for how long the contract was to be extended and on 23 December 1993 the plaintiff`s solicitors wrote:

Our clients did by way of a letter dated 9 September 1993 exercise their right to extend the term of the agreement on similar terms and conditions pursuant to the agreement.

For the avoidance of doubt, we are instructed by our clients to confirm that they wish to and have exercised their right to extend the term of the agreement on similar terms and conditions, ie for a further period of nine months.

This action was not commenced until 22 January 1994 and the application for interlocutory injunctions was issued the same day.

Plaintiff`s prospect of success

The alleged breach

The claim is for an alleged breach of the contracts dated 5 April 1993. Clause 11 which prohibits the defendants from doing that which the injunctions applied for seek to enjoin the defendants from doing has been set out in full above. The prohibition applies `throughout the duration of [the contract]`. The duration of the contract is the period 27 April 1993 to 31 January 1994. The defendants have signed a contract to perform from 15 February 1994 which is after the duration of the 1993 contract. Mr Ng says that the duration of the contract means the period of nine months from 1 February 1994 to 31 October 1994. If the duration of the contract means that period then it is not the duration of any contract dated 5 April 1993. If anything it would have to be the duration of a contract formed upon the plaintiff exercising its right to extend the contract dated 5 April 1993 under cl 10. As to this the plaintiff`s case is that the plaintiff exercised its right by letter dated 9 September 1993 and confirmed by its solicitors` letter dated 23 December 1993. That would be a contract formed after the defendants` letter of 3 September 1993 notifying the plaintiff that they would not be performing for it after 31 January 1994. There is no indication of any amendment and the statement of claim has not been delivered but it seems to me that the plaintiff`s case is not consistent with the reliefs claimed or the injunctions asked for.

The right to extend

Clause 1 provides for the engagement of the defendants under the `terms and conditions hereinafter contained`. Clause 9 provides for the right of the plaintiff to terminate the service of the defendants if they breach any of the `stipulated terms and conditions of the contract`. Clause 10 provides for the right to `extend [the contract] on similar terms and conditions`. If the `terms and conditions` referred to in cl 10 have the same meaning as the `terms and conditions` in cll 1 and 9 they would include cl 10 itself the effect of which may be a contract which the plaintiff may at its option extend perpetually. Mr Ng says it can be extended once only which is to say that the terms and conditions do not include that part of cl 10 reserving to the plaintiff the right to extend. I agree that the parties could not...