Subaru sole distributor to pay S$164,000 to ad agency after axing Forester video project

AP Media started work shortly after this meeting and later sent a fee quote with a contract price of S$301,200.

The payment terms specified that 50 per cent of the fees was to be paid on confirmation of the project, and the other half upon delivery.

It also stated that in the event of cancellation, the customer is required to pay 50 per cent compensation on the full amount of the order.

Motor Image Enterprises accepted the fee quote in November 2023 and issued a purchase or works order to AP Media.

The live shoot for the ad took place in Malaysia in December 2023. Over about a month, AP Media provided five draft videos to Motor Image Enterprises.

The distributor gave feedback on the videos, but was not happy with them. AP Media made several requests and demands for payment but none were made.

District Judge Jonathan Ng Pang Ern found that a valid contract had been formed when Motor Image Enterprises accepted the fee quote, and that the company had breached the contract.

Therefore, it had to pay the 50 per cent cancellation fee, which comes up to S$164,154.

“Despite having put the claimant to considerable work on the project, the defendant refused to make payment because it assessed that the claimant would not be able to deliver the video advertisement to its satisfaction,” the judge said.

“The overarching question presented in this trial is not whether this assessment was correct. 

“Instead, it is whether the defendant was entitled to refuse payment.”

Judge Ng said that the defendant had raised “a litany of defences to impugn the parties’ contract from its formation right through to the remedy for its breach”.

“I have found these defences to be devoid of legal merit,” he added.