Tanya Chua v Music & Movements (S) Pte Ltd [2009] SGHC 75
Court: High Court
Coram: Lai Siu Chiu J
FACTS
This case involves a dispute between the plaintiff, a popular singer and songwriter known as Tanya Chua, and the defendant, a music publishing company named Music & Movements (S) Pte Ltd, in that songs that the plaintiff composed exclusively while under contract for the defendant, are no longer owned by the defendant upon the expiry of two agreements signed between the parties.
On 18 September 2002, the plaintiff signed an agreement with the defendant agreeing to compose songs exclusively for the defendant for a period of three years with the option to renew the contract for a further period of three years by mutual agreement. The plaintiff was then paid royalties for songs composed during the duration of the contract after minus the costs incurred and commission. The plaintiff was also advanced a royalty payment of S$20,000.
On 25 May 2005, the plaintiff signed a second agreement with the defendant, extending the first agreement to at least 17 March 2007. The plaintiff was also advanced S$40,000 as a royalty payment. A clause in the contract allowed the plaintiff to either extend the contract with the defendant by mutual consent at the expiration of the second contract, or cease the agreement upon its termination.
ISSUES
Whether the rights in the composition reverted back to the plaintiff after the termination of the second agreement on 17 March 2007:
The plaintiff asserted that the rights to her compositions reverted back to her at the expiration of the second agreement on 17 March 2007. However, as a gesture of goodwill, she allowed the defendants a final extension till 30 June 2007. She sought to rely on two grounds: (1) that the accounting problems of the defendants, which were not remedied within 30 days, made them in breach of clause 12 of the first agreement which enabled the plaintiff to terminate the contract and (2) that under clause 5 of the second agreement, the rights of the defendants over the Compositions should cease after termination.
With regards to the first ground, the defendant pointed out that these errors had actually benefited the plaintiff, as it oversaw the deduction of withholding tax for royalties due to the plaintiff, thus resulting in the plaintiff receiving more royalties than she should have. He also disputed the defendant’s claim that she only found out about the errors in the email dated 3 April 2008, pointing out that she had already raised the issue in her email dated 14 November 2006, and that they had gone out of their way to let the plaintiff’s solicitors and accountants inspect their books on 23 August 2007, fulfilling their obligations under clause 12 of the first agreement. Furthermore, the plaintiff had been made aware of the timelines relating to the receipt of periodic statements of accounts from Warner-Chappell. There had always been full and complete accounts given to the plaintiff and the overpayment discrepancies were explained to the plaintiff’s solicitors.
With regards to the second ground, the defendant explained that that according to industry practice, in instances whereby a songwriter signed with a new publishing company, rights to songs composed exclusively under the previous publisher would have to be bought over by the new publisher if desired, thought it was still the original publisher’s prerogative to relinquish its rights. A letter from the general manager of Universal Music Publishing Malaysia & Singapore was used to confirm this.
DECISION
Relating to the first ground, the court found that the accounting discrepancies had already been resolved with the plaintiff in December 2006 and that the defendant had fulfilled its obligations in allowing the plaintiff to examine its accounting books. The plaintiff had insufficient grounds to rely on clause 12 of the first agreement.
Relating to the second ground, the court opined that no cogent arguments were raised against clause 6 of the second agreement that the defendant’s rights to the plaintiff’s compositions would survive the expiry of the contractual agreement. The plaintiff would continue to receive royalty payments in perpetuity for the compositions assigned to the defendants.
The court dismissed the case with costs to the defendants.
COMMENTARY
A well drafted contract is difficult to overturn especially one which is rooted in industry practice. Recording companies and artistes should closely scrutinize their contracts at the drafting as the nature of the music business is such that a fledgling artiste has the potential to become a major money-spinner overnight.
