1 The question before the court was the legality of an agreement between the first respondents (`Amara Hotel`) and the appellants (`Nova`) dated 8 July 1988 (`the agreement`) by the terms of which Nova agreed to operate for Amara Hotel a discotheque on the fourth level of Amara Hotel`s premises at 165 Tanjong Pagar Road, Singapore (`the discotheque`). The legality of the agreement turned on the interpretation of the Public Entertainments Act (Cap 257) (`the Act`) and the rules made thereunder, the Public Entertainment Rules 1969 (`the Rules`) in general, and s 3 of the Act and r 5 of the Rules in particular.

2 The learned judicial commissioner who tried this question decided `that the agreement was illegal and unenforceable as it contravened the Act and the Rules`. His judgment is reported at [1993] 2 SLR 289 . At the conclusion of the appeal we allowed it. Accordingly we set aside his judgment and ruled that the agreement was not illegal. Our reasons follow.

3 The relevant provisions of the agreement are the following:

4 In compliance with cl 1.2 of the agreement Amara Hotel did apply for and were issued with a licence to operate the discotheque under the provisions of the Act and the Rules. The application for the licence was made in the name of Teo Kwee Chuan, the second respondent (`Teo`) who, at the material time, was a director of Amara Hotel and was described as such in the application form. The licence was issued in Teo`s name without any reference to his connection with Amara Hotel or for that matter to Nova.

5 In this connection it is necessary to refer to rr 3(2) and 5 of the Rules which provide as follows:

6 The relevant sections of the Act, for present purposes, are the following:

7 It will be seen from the clauses of the agreement we have set out above that Amara Hotel have delegated to Nova the absolute control, operation and management of the discotheque retaining to themselves, vide cl 16.1 of the agreement, the residual right of entry upon the discotheque at all reasonable times, albeit upon prior notice and with as little disturbance to the operation of the discotheque as is possible, for the purposes of inspecting the operation of the discotheque or for examining the books or records of the discotheque`s operation. Notwithstanding the delegation of the absolute control, operation and management of the discotheque, it would also have been noted that the contractual relationship of Amara Hotel and Nova is described in cl 8.4 as that of principal and agent. Clause 1.2 provided that it was Amara Hotel who were responsible for applying for and maintaining the licence for the operation of the discotheque which they obtained in the name of one of their directors, Teo, although the cost of such licence would be borne by Nova. Be all this so, by reason of the residual right of entry referred to above, the contractual relationship of principal and agent and the fact that the licence for the operation of the discotheque was held in the name of a representative of Amara Hotel thus reserving to themselves the ultimate control over the discotheque, and from a reading of the whole of the agreement, the scheme of the agreement, in our judgment, was that Amara Hotel were engaging the services of Nova to operate the discotheque at their premises for the benefit of their residents, which would also be open to the public.

8 It will also be seen from the sections of the Act we have set out above and rr 3(2) and 5 of the Rules that the scheme of the Act and the Rules is to issue the licence to a natural person or persons and to hold them responsible, under pain of the penalties provided in the Act, for the due performance of the public entertainment in accordance with the provisions of the Act, the Rules and the conditions of the licence.

9 In our judgment the learned judicial commissioner, with all due respect to him, was over-influenced by this aspect of the Act and the Rules and the contractual rights and obligations of the parties created by the agreement. This led him to say:

10 ... The provision in the agreement that the first defendant [Amara Hotel] `shall be responsible for applying for and obtaining the licence and maintaining it throughout the operating term` to enable the plaintiffs to operate the discotheque offended the purpose and context of s 3 of the Act and r 5 of the Rules.

11 We are unable to agree with the reasoning of the learned judicial commissioner. In particular, we are unable to agree with him that, in order not to transgress s 3 of the Act, the person in whose name a public entertainment licence has been issued must be `accountable` to the provider of the public entertainment. We are also unable to agree with the interpretation he placed on r 5 of the Rules. He said:

12 Section 3 of the Act prohibits the providing of public entertainment except in the two circumstances specifically stated in the section, one of which is that there must be in existence, at the time the public entertainment is provided, `a licence issued by a Licensing Officer`. The penalty for a violation of this provision is contained in s 18(1) of the Act. Both ss 3 and 18 of the Act have been set out in full in the earlier part of this judgment.

13 In our judgment the word `licence` in both ss 3 and 18(1) of the Act is used in reference to the public entertainment itself and not in reference to the person or organization providing, or assisting in providing, the public entertainment, notwithstanding that the licence must be held in the name of a natural person. This is made clear by the wording of s 18(2) of the Act which excludes a person from the strictures of s 18(1) of the Act by the words `by reason of his having taken part in the public entertainment provided`. Were this not so, then, each and every person who takes part, or assists in taking part, in the public entertainment provided, in whatever capacity, must be in possession of a public entertainment licence issued by a Licensing Officer or else he will be subject to the penalties of s 18(1) of the Act. This is not what the Act and the Rules intended to prohibit. What the Act and the Rules intended to prohibit is the providing of public entertainment in respect of which there is no licence issued. The reason why the licence is issued in the name of a natural person is manifestly clear. It is so that he may be held accountable to the licensing authority for breaches of the Act, the Rules or the conditions of the licence.

14 It seems to us that the learned judicial commissioner was troubled by r 5 of the Rules which prohibits a transfer or lending of the licence to any other person. Its plain and ordinary meaning is that a licensee shall not transfer or lend the licence issued to him for the purpose of the public entertainment stated in the licence to another person for him to provide public entertainment other than the one for which it was issued. This interpretation is consistent with the interpretation we have given to s 3 of the Act. No licence is issued for providing public entertainment in a general sense. It must refer to a particular public entertainment. Otherwise, the licensing provisions would be rendered otiose, the purpose of which surely is `to provide for the regulation of public entertainments` as the Act clearly indicates. The regulation is the regulation of the public entertainment itself.

15 The learned judicial commissioner also founded his interpretation of the Act and the Rules on the `accountability` of the licensee, Teo, to the provider of the public entertainment, Nova, and the `control` the licensee, Teo, needed to have over the discotheque to assure compliance with the Act. We have already referred to that part of the learned judicial commissioner`s judgment where he alluded to this. He further addressed himself thus:

16 With respect to the learned judicial commissioner, we are unable to agree with this approach. We have already observed that in our judgment the reason for issuing the licence in the name of a natural person is to hold the licensee accountable to the licensing authorities for breaches of the Act, the Rules or the conditions of the licence. The Act and the Rules envisage the licensee`s accountability to the licensing authority. This is clear from the requirements of s 11 which empowers the Licensing Officer, in his discretion, in the classes of public entertainment as prescribed by the Minister, to require the licensee to furnish security or to enter into a bond to ensure due observance of the provisions of the Act, the Rules and the conditions of the licence, and if the licence is issued in the names of several natural persons (s 6 of the Act) that each licensee furnishes security or enters into a bond. This, in our judgment, cannot lead to the interpretation placed on s 3 of the Act by the learned judicial commissioner that `s 3 does not permit the plaintiffs [Nova] to provide the entertainment under a licence issued to someone who has no control over the mode and manner of the management and operation of the discotheque`. In our view, the Act and the Rules could not envisage `accountability` of the licensee to a third party.

17 `Accountability` and `control` in the sense referred to by the learned judicial commissioner are matters of contract between the licensee and the person, be he another natural person or a corporation or firm, engaged by the licensee to provide or `supply` (per Chan Sek Keong J [as he then was] in JB Jeyaretnam v PP 1 at p 132, col 1 at F) the public entertainment for which the licence is issued to the licensee. Such `accountability` and `control` is outside the purview of the Act and the Rules.

18 Adopting the interpretation we have given to s 3 of the Act and r 5 of the Rules, it could not be said, in our judgment, that the agreement is illegal. Clearly a licence was issued for the operation of a discotheque at the premises of Amara Hotel. The licence was held by Teo as the representative of Amara Hotel. By the terms of the agreement, Nova, as the agents of Amara Hotel, were engaged to operate the discotheque. There was no transference or lending of the licence to Nova. It is clear that under the Act the public entertainment can be provided by the licensee or by someone engaged by him for that purpose (see Chan Sek Keong J in JB Jeyaretnam v PP 1). There was no circumvention of s 3 of the Act or r 5 of the Rules or a breach of either of them. The public entertainment, namely, the discotheque provided by Nova at the premises of Amara Hotel as the agents of Amara Hotel, was covered by the licence issued to Teo as the representative of Amara Hotel.

19 It was for these reasons that we allowed this appeal. In our judgment, the agreement was not illegal. It was clearly enforceable between the parties.

20 Appeal dismissed.