Sky Blue Media v Goh Sin Teck (WA-22NCVC-657-10/2018)

Content

Page 1 of 25 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE WILAYAH PERSEKUTUAN MALAYSIA IN THE WRIT ACTION NO: WA-22NCVC-657-10/2018 BETWEEN SKY BLUE MEDIA …… PLAINTIFF (Company No.: 842318-P)

Schedule

Schedule 1 annexed hereto. - For the purposes of effecting the above conversion from static to LED, the Plaintiff shall at its own cost and expense tear down, dismantle and/or remove the Static Site. - The Plaintiff must at its own cost and expense obtain all license, approval or permit from Datuk Bandar Kuala Lumpur to carry out its obligations under this Agreement (“DBKL Approval’). Page 6 of 25 - The Plaintiff must at its own cost and expense ensure that the LED Billboard and all ancillary equipment are installed, commissioned, tested and fully operational within ninety (90) days from obtaining the DBKL Approval in Clause 4.3 above. - The Plaintiff shall at its own cost and expense supply, erect, install, sell & market and provide general maintenance and repair of the LED Billboard and all ancillary equipment. - The Plaintiff shall be responsible for and shall bear all costs and expenses of whatever nature pertaining to the installation, operation, management and maintenance of the LED Billboard and all ancillary equipment, including but not limited to electricity and utility charges, submission fees, processing fees, license fees, and third party liability insurance premium and all risk insurance premiums. Page 7 of 25 - The Plaintiff shall (at its own cost and expense) be responsible for obtaining any necessarily license, approval or permit from the relevant authorities to install and advertise media contents on the LED Billboard and all ancillary equipment. - The Plaintiff shall solely be responsible and liable for ensuring the performance of any contracts or agreement entered into by it with third parties in respect of the LED Billboard and all ancillary equipment (“Advertising Contracts”). The Defendant shall not under any circumstances be responsible or liable for any Advertising Contracts. - The Plaintiff shall on or before the 7th day of each calendar month provide to the Plaintiff, monthly sales reports in respect of the LED Billboard and all ancillary equipment for the preceding calendar month. - The Plaintiff shall maintain all materials or records in any form that contains accounts or sales information in Page 8 of 25 respect of the LED Billboard and shall allow the Owner, either itself or through an agent and upon two (2) days’ prior written notice being given, to investigate, review, audit, or inspect the same. 5.5 Clause 6 of the RSA provides the terms on how the revenue generated from the sales of advertising slots for the LED Billboard will be shared between the Plaintiff and the Defendant. 5.6 Pursuant to the RSA, the Plaintiff on its costs and expenses had proceeded to convert the Static Billboard into a LED Billboard, however the LED Billboard erected by the Plaintiff was not measured at 60’ x 60’ as per the RSA but it was a LED Billboard measured at 60’ x 40’. By December 2017, the LED Billboard was fully erected by the Plaintiff. 5.7 Upon, the completion of the LED Billboard, the Plaintiff had proceeded to run its business in regards to the utilization of the LED Billboard. Page 9 of 25 5.8 However, three months after the LED Billboard was fully erected, the Defendant on 6.3.2017 (6th March letter) had written to the Plaintiff and in his letter, he had inter alia stated as follows: 4. I have since discovered that contrary to Clause 4.1(a) of the Agreement, you have installed an LED Billboard with a display size of 60ft x 40ft only, instead of the agreed size of 60ft x 60ft. 5. Also, contrary to Clause 4.3 of the Agreement, until today you have not yet obtained the required licenses, approval or permit from DBKL within a reasonable time or at all. 6. I am writing to notify you that you are required to rectify the above matters within 14 days from the date of this letter. 5.9 Despite the 6th March letter, the Plaintiff on 13.6.2017 had made the 1st payment under the RSA to the Defendant for the sum of RM131,117.90. The payment was made via RHB Reflex wherein the sum of RM131,117.90 was credited into the Defendant’s RHB account bearing account number 21247900009830. (Exhibit “M-1” page 26 of Enclosure 6). The sum of RM131,117.90 was duly accepted or collected by the Defendant (without any objection). Page 10 of 25 5.10 Three months after the 6th March’s letter and after having accepted the 1st payment under the RSA from the Plaintiff, on 22.6.2017, the Defendant wrote again to the Plaintiff and the contents of the letter inter alia reads as follows: 2. As you are aware, I had sent you a letter with regards to our Revenue Sharing Agreement Clause 4.1 (a) pertaining to the size of the LED display. According to our Agreement, the LED display size shall be 60’ x 60’ instead of 60’ x 40’. 3. It has been 60 days, I yet to receive any respond from you with regards to my request to fulfil your contractual obligations with my letter dated 6-3-2018. 4. Also, contrary to clause 4.3 of the agreement, SKY Blue Media Sdn Bhd has not obtained license from DBKL to operate the said LED display at my premises. 5. I hereby to notify you that you are required to rectify the above matters within 14 days of this letter. Failing which, I shall consider your company fail to fulfil the contractual obligations and proper legal actions will be taken to rectify and remedy the situation. 5.11 On or about 11.7.2018 (11th July meeting) , the Plaintiff had a meeting with the Defendant with regard to the LED Billboard and to update the Defendant of the progress of the business Page 11 of 25 and licensing and to discuss future actions with the Defendant. 5.12 After the 11th July meeting, a series of emails were sent to the Defendant by the Plaintiff to obtain his feedback but there was no response from the Defendant. 5.13 By a letter dated 28.8.2018 (28th August Notice) the Defendant through his solicitors issued a termination notice of the RSA alleging that the Plaintiff had breached the RSA and to forfeit the deposits paid by the Plaintiff to the Defendant. 5.14 Through its solicitor’s letter dated 12.9.2018 the Plaintiff had requested the Defendant to retract the said termination notice (28th August Notice). 5.15 By a letter dated 13.9.2018, the Defendant’s solicitors responded that that they will not retract the said termination notice. Page 12 of 25 5.16 Ten days after refusing to retract the 28th August Notice, the Defendant by a letter dated 24.9.2018 (24th September Termination Notice) had yet again issued a termination notice to the Plaintiff terminating the RSA and requested that the Plaintiff at its own costs and expenses, tear down, dismantle and remove the LED Billboard and all ancillary equipment and to deliver vacant possession of the of the Static Site to the him. The Plaintiff is also instructed to restore the Static Site to its original position by or before 28.10.2018, which is 60 days from the 28th August Notice. 5.17 Thereafter, upon receiving the 24th September Termination Notice, the Plaintiff had filed the present writ action. 5.18 Pending the disposal of the main action, the Plaintiff sought for an interim injunctive relief in respect of the LED Billboard which had been erected by the Plaintiff. Page 13 of 25 C. The legal principles in the granting of an interim injunction [6] The principles governing the exercise of court’s discretionary power in the granting of an interim injunction are trite and well settled. Suffice for this Court to refer to the following cases: i. American Cyanamid Co v. Ethicon Ltd [1975] 1 All ER 504 The House of Lords had propounded the governing principles in granting interlocutory injunction. When the court has to consider whether to grant or not to grant an applicant’s application for an interlocutory prohibitory injunction, the Court must consider whether the Plaintiff has satisfied the following four (4) conditions: i. there is a serious question to be tried; ii. damages would not be an adequate compensation for the Plaintiff but would be an adequate compensation for the Defendant; iii. the balance of convenience lies in favour of the Plaintiff's; and iv. there are special circumstances in favour of the Plaintiff or there are no special circumstances in favour of the Defendant. ii. Keet Gerald Francis Noel John v Mohd Noor [1995] 1 MLJ 1993. Gopal Sri Ram JCA (as he then was) said at pages 206-207:- “ To summarize, a judge hearing an application for an interlocutory injunction should undertake an inquiry along the following lines: 1. He must ask himself whether the totality of the facts presented before him discloses a bona fide serious issue to be tried. He must, when considering this question, bear in mind that the pleadings and Page 14 of 25 evidence are incomplete at that stage. Above all, he must refrain from making any determination on the merits of the claim or any defence to it. It is sufficient if he identifies with precision the issues raised on the joinder and decides whether these are serious enough to merit a trial. If he finds, upon a consideration of all the relevant material before him, including submissions of counsel, that no serious question is disclosed, that is an end of the matter and the relief is refused. On the other hand if he does find that there are serious questions to be tried, he should move on to the next step of his inquiry; 2. having found that an issue has been disclosed that requires further investigation, he must consider where the justice of the case lies…” 3. the judge must have in the forefront of his mind that the remedy that he is asked to administer is discretionary, intended to produce a just result for the period between the date of the application and the trial proper and intended to maintain the status quo…” iii. Alor Janggus Soon Seng Trading Sdn Bhd v Sy Hoe Sdn Bhd [1995] 1 MLJ 241 iv. Sunrise Sdn Bhd v First Profile (M) Sdn Bhd [1996] 3 MLJ 533. v. Sivaperuman v Heah Seok Yeong Realty Sdn Bhd [1978] 1 LNS 184 Page 15 of 25 D. Court Analysis and Decision Serious issues to be tried [7] To determine whether or not the Plaintiff is entitled to an interim injunctive relief, this Court must first consider if indeed there are serious issues to be tried in this case. [8] First, this Court must take cognisance the undisputed facts surrounding the RSA. There are as follows: i. It is not in dispute that prior to the execution of the RSA, the Defendant had let out the Static Site measuring 60’x 40’ to another company known as Syarikat Moving Walls Sdn Bhd (Moving Walls). ii. It is also not in dispute that prior to the execution of the RSA, the licence for the said static Site measuring 60’x 40’ was under the name of Moving Walls. It must also be noted that the licence held by Moving Walls for the static Site had expired by 31.12.2015. Page 16 of 25 iii. It is not in dispute that prior to the RSA being executed by the Plaintiff and the Defendant, it was the Defendant who had written to the Dewan Bandaraya Kuala Lumpur (DBKL) applying to transfer the licence of the Static Site under the name of Moving Walls (60’ x 40’) to be transferred to the Plaintiff’s name on the ground that he has terminated the leasing agreement he had with Moving Walls and will be signing a new agreement with the Plaintiff. The Defendant’s letter to the DBKL was dated 30.8.2017. The Defendant had in his letter also informed the DBKL that the license held by Moving Wall has since expired. iv. DBKL had responded to the Defendant’s application and by the DBKL’s letter dated 8.11.2017 to the Plaintiff, DBKL had informed the Plaintiff that it has no objection to the transfer of the licence to the Plaintiff subject to the terms of the license therein. It must be noted here that the licence which had been transferred to the Plaintiff is for Billboard measuring 60’ x 40’. Page 17 of 25 v. Upon receiving the no objection letter from the DBKL and receiving the work permit to erect the LED Billboard, the Plaintiff had proceeded with the construction of the LED Billboard. The LED Billboard structure was fully erected by December 2017. vi. The Defendant had only written to the Plaintiff complaining that the measurement of LED Billboard erected by the Plaintiff was not as per the RSA (60’ x 60’) three months after LED Billboard was fully constructed. Whereas in fact, the Defendant was fully aware that the transfer of the licence from Moving Walls to the Plaintiff is for site measured at 60’ x 40’. vii. Despite the Defendant’s complaint that the LED Billboard was not measured at 60’ x 60, the Defendant had accepted the payment of RM 131,117.98 being 1st payment for the revenue sharing under the RSA. Page 18 of 25 viii. the DBKL had only approved and licensed the placing of the Billboard measuring 60’ X 40’ to the Plaintiff on 7.9.2018. [9] Having set out the undisputed facts as above, this Court agrees with the counsel for the Plaintiff that at all material times the Defendant was not only fully aware of the procedures and timelines required for licensing. The Defendant also has knowledge on the licensing procedures, being an owner of Billboard sites himself. [10] It must also be noted that in the recital of the RSA, the Defendant has represented to the Plaintiff that he is the legal and beneficial owner of the Static Site measuring 60ft x 60ft. [11] It was the contention of the Plaintiff that when the Defendant had represented that he is the owner of a Static Site measuring 60’ x 60’ (whereas in actual fact the existing Static Site owned by the Defendant is only measured at 60ft x 40ft), the Defendant had misrepresented to the Plaintiff in the RSA. Thus, it was submitted Page 19 of 25 by the counsel for the Plaintiff that there is a material representation by the Defendant. [12] It was also contended by the Plaintiff that pursuant to the RSA, the Plaintiff had applied and obtained a valid and subsisting license to erect a 60’ x 40’ LED Billboard. This license is valid for a period one year i.e. 1.12.2017 to 30.11.2018 and the licensing fee had been duly paid by the Plaintiff. [13] It was also the contention of the Plaintiff, the Plaintiff had applied for the license in accordance to DBKL’s normal procedures which also entails that in order to seek additional approval or license to increase the size of the Billboard, the Plaintiff is required to possess a prior valid license. These facts are within the Defendant’s knowledge and the Defendant was fully aware of these facts when the Plaintiff took down the static Site and constructed the new LED Billboard within the measurement of the original static Site. [14] This Court must also consider the fact that despite writing two letters dated 6.3.2018 and 22.6.2018 to the Plaintiff complaining on the size of the LED Billboard at 60’ x 40’, the Defendant had Page 20 of 25 without objection collected or accepted the 1st payment made by the Plaintiff in accordance to the RSA for RM131,117.98. [15] In fact, the Plaintiff has stopped the payment of RM30,771.20 (being the Defendant’s entitlement as at 30.9.2018) to the Defendant, because of the present dispute. [16] The counsel for the Plaintiff submitted that the conduct of the Defendant in collecting the monies being his entitlement as the owner of the Site, constituted a waiver of any stipulation in the letters issued by the Defendant. [17] The counsel for the Plaintiff had further submitted that the notices of termination issued by the Defendant are premature as the said RSA did not stipulate any time frame for the conversion of the static Billboard to a 60’ x 60’ LED Billboard by the Plaintiff. [18] The Defendant in the present case had heavily relied on the Plaintiff’s obligation to erect the LED Billboard as per the measurement spelt out under Clause 4 of the RSA. Primarily, the Defendant had contended that the Plaintiff had failed to construct and install a LED Billboard with a display size of 60’ x 60’. Page 21 of 25 [19] Apart from relying on Clause 4, the Defendant had also in his efforts to deny the Plaintiff of the injunctive relief sought by the Plaintiff, the Defendant had claimed that the Plaintiff has been displaying the LED Billboard without obtaining the relevant license from DBKL on the ground that the Plaintiff had not paid the licensing fee to DBKL. [20] This issue was taken by the Defendant by relying on DBKL’s letter dated 5.10.2018. The DBKL in its letter to the Plaintiff had stated this: 2. Dimaklumkan bahawa semakan Jabatan ini mendapati pihak tuan gagal untuk menjejaskan bayaran lesen bagi tempoh 30 hari seperti tertakluk di dalam surat rujuk: DBKL.JPPP/IL35/1548/01/2018 bertarikh 21 April 2018. Jabatan juga telah menerima notis penamatan perjanjian penyewaan daripada pemilik bangunan bertarikh 26 September 2018. 3. Sehubungan itu, selaras dengan peruntukan Undang-Undang Kecil 8(4), Undang-Undang Kecil Iktan (Wilayah Persekutuan) 1982 (Pindaan 1982), kelulusan lesen paparan iklan milik pihak tuan adalah ditarik balik dan dibatalkan. Page 22 of 25 4. Pihak tuan dikehendaki menurunkan struktur paparan iklan tersebut dalam tempoh empat belas hari (14) hari dari tarikh surat ini. Sekiranya pihak tuan gagal bebuat demikian dalam tempoh yang ditetapkan, tindakan undang-undang akan diambil tanpa sebarang notis lagi termasuk merobohkan papan iklan tersebut dan melupuskannya selaras dengan peruntukan Seksyen 14 Undang-Undang Kecil Iklan (Wilayah Persekutuan) 1982 dan Pindaan-Pindaannya. Segala kos penurunan akan dituntut daripada pihak tuan. [21] In view of such letter, the Defendant had contended that the failure of the Plaintiff to pay the licensing fee deemed the Plaintiff to be in contravention of the Advertisements (Federal Territory) By-Laws 1982 and the Plaintiff thus has displayed advertisements through the LED Billboard illegally. The Defendant had further contended that the Plaintiff having contravened the law should not be entitled to an injunctive relief. [22] The counsel for the Defendant had submitted that this Court cannot grant any relief on a claim that is founded on illegality, let alone enforce any rights based on illegality. The counsel for the Defendant had relied on the Court of Appeal’s decision in the case Page 23 of 25 of Norihan Talib & Ors v. Mohd Nasir Hassan& Ors and Another Appeals [2018] 2 CLJ 66. [23] In response to this issue, the Plaintiff had contended that it had duly paid the licensing fee to the DBKL and by a letter dated 15.10.2018 (15th October letter). The DBKL then had deferred the notice of termination letter dated 5.10.2018 until the final disposal of this action. Paragraph 3 of the DBKL 15th October letter reads as follows: Justeru itu, notis pembatalan kelulusan lessen bertarikh 5 Oktober 2018 adalah ditangguhkan sehingga mendapat keputusan muktamad daripada pihak mahkamah berhubung isu penyewaan tapak di antara pihak tuan dan pemilik bangunan. [24] Having deliberated the facts and circumstances in the present case, there is no reason for this Court to disagree with the counsel for the Plaintiff that there are serious issues to be tried, which inter alia are namely; whether there is a breach of the terms of the RSA; whether there is material misrepresentation on the part of the Defendant; whether there was a waiver; whether the RSA was pre maturely terminated; whether the conduct of parties subsequent to the RSA tantamount to deviation of the RSA. Page 24 of 25 Balance of convenience [25] The Plaintiff had fully erected the LED Billboard since December 2017 and since then the business has been running. The Plaintiff has sold the spaces. Numerous clients had contracted with Plaintiff and advertisements have been put up at the site. If the Defendant is allowed to obstruct and / or forfeit the Plaintiff’s usage of the LED Billboard, it would obviously cause unconscionable damage to the Plaintiff’s reputation, goodwill and future business as its current and potential clients will doubt the Plaintiff’s reliability, capabilities and expertise to provide comprehensive service to its clients. This would inevitably lead to prejudicial inference that the Plaintiff is an unreliable and untrustworthy company. [26] The balance of convenience in this case clearly lies in favour of the Plaintiff. It is pertinent that the status quo is maintained pending proper disposal of the present case. Whether damages are adequate remedy [27] Clearly in the present case, damages would not be an adequate remedy. It is not just the costs and expenses of construction of the Page 25 of 25 LED Billboard expended by the Plaintiff that this Court ought to consider. More pertinently, the nature of the Plaintiff’s business or business model is that if the Defendant is left unrestrained from interfering the Plaintiff from the usage of the LED Billboard, the Plaintiff will suffer loss of business, reputation and goodwill. In respect of such loss, damages would not be an adequate remedy. [28] In light of the aforementioned reasons, this Court is of the view that the Plaintiff is entitled to the injunctive relief it has sought for. This Court hereby allows the Plaintiff’s application in Enclosure 5 with costs of RM5000.00. ………………………………………………………………………. (AZIMAH BINTI OMAR) Judge High Court of Kuala Lumpur 5 December 2018 For the Plaintiff - Messrs Harjinder & Associates Harjinder Singh,Tengku Haris and Nirumala Pasudoray For the Defendant - Messrs Loi & Co. Ong Johnson