Comfort Management Pte Ltd v Afco East Pte Ltd and others

CourtHigh Court (Singapore)
JudgeJudith Prakash J
Judgment Date29 June 2012
Neutral Citation[2012] SGHC 137
Citation[2012] SGHC 137
Defendant CounselCheah Kok Lim (Cheah Associates LLC)
Plaintiff CounselSoh Gim Chuan (Soh Wong & Yap)
Published date05 July 2012
Docket NumberSuit No 313 of 2011
Date29 June 2012
Subject MatterDistress for Rent,Landlord and Tenant,Conversion,Tort,Illegal Distress
Judith Prakash J: Introduction

In its statement of claim, the plaintiff, Comfort Management Pte Ltd, formulates its claim against the defendants as being “for conversion and/or for wrongful or illegal distress of the Plaintiffs’ properties”.

There are three defendants. The first defendant is Afco East Pte Ltd (“Afco”), a Singapore incorporated company. Mr Lee Bee Eng and Ms Ang Lay Hong, the second and third defendants respectively, are the directors and shareholders of Afco.

The proceedings herein are an offshoot of OS 71 of 2008 (“OS 71”) filed in the Subordinate Courts by Afco in February 2008. In OS 71, Afco applied under the provisions of the Distress Act (Cap 84, 1996 Rev Ed) (“the Act”) to procure the issue of a Writ of Distress against a firm called Alaskan Ice Distribution (“Alaskan Ice”). Pursuant to this writ certain equipment lying in Afco’s premises at 9 Jalan Tepong Singapore (“the premises”) was seized by the Bailiff of the Subordinate Courts and subsequently sold by auction in July 2008. The plaintiff’s position is that the equipment was wrongly seized and sold because it did not belong to Alaskan Ice but belonged to the plaintiff as the defendants well knew at the time of the seizure.

The trial of the action took place over two days in December 2011. At the end of the plaintiff’s case, the defendants elected not to call any evidence and submitted that there was no case to answer. The parties subsequently filed written submissions.

No case to answer – the law

The test of whether a defendant has a case to answer is whether the plaintiff's evidence, taken at face value, establishes a case in law or, alternatively, whether the evidence led by the plaintiff was so unsatisfactory or unreliable that the plaintiff was unable to discharge its burden of proof. See Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani [2008] 4 SLR(R) 657 at [20] following Bansal Hemant Govindprasad v Central Bank of India [2003] 2 SLR(R) 33 at [11].

In this case, while the defendants say that they have no case to answer based on both of the above grounds, the reasons given in their written closing submissions seem to suggest that they are mainly pursuing the first ground of no case to answer, namely, that the plaintiff’s evidence at face value does not establish a prima facie case in law.

The facts

From 2005, Afco was the landlord of the premises. At the time that Afco became the landlord, the premises housed certain equipment (“the equipment”) which was used to produce ice. The plaintiff’s position is that it was at all material times the beneficial owner of the equipment and was the producer of the ice which was then distributed by Alaskan Ice. According to the plaintiff, Alaskan Ice was an associate business of the plaintiff but the plaintiff did not clarify the exact relationship between it and Alaskan Ice. The evidence before me establishes that the plaintiff was at all material times the absolute owner of the ice production machine, two refrigeration systems and the switchboard which formed part of the equipment. As for another part of the equipment, the automatic freezing tank, the plaintiff was purchasing this on hire purchase and completed all its hire purchase payments in July 2008 when it became the owner of the tank. Before that it was the bailee of the tank under the hire purchase agreement.

The plaintiff’s position was that at all material times, it was the tenant of the premises. It produced evidence of a tenancy agreement dated 31 December 2002 between itself and the prior landlord of the premises, one Fong Fo Eng (“Mr Fong”), under which the premises were let to the plaintiff for two years. The plaintiff said that this tenancy agreement was succeeded by another one made in 2004 for the period from 1 January 2005 to 31 December 2006. The plaintiff, however, admitted through its counsel that the 2004 tenancy agreement was never signed by Afco. It also appears from the copy of the document that was produced in court that it was not signed by Mr Fong either and was also not stamped. The plaintiff subsequently learnt that Mr Fong had transferred the premises to Afco and that Afco was the landlord.

The defendants’ position was that the plaintiff was not the tenant of the premises from 2005 onwards. They said that Alaskan Ice was the tenant under a month-to-month tenancy because Alaskan Ice was the party who paid the rent of the premises. This rental payment was evidenced by statements of account which Alaskan Ice issued to Afco from 30 April 2005 to 31 January 2006.

The plaintiff’s response was that Alaskan Ice was not the tenant because it had never signed any tenancy agreement. The plaintiff admitted, however, that Alaskan Ice had paid the rental for the premises under the 2002 and 2004 tenancy agreements but asserted that such payments were made on the plaintiff’s behalf because the plaintiff and Alaskan Ice had a contra agreement in respect of the dealings between them relating to the sale and purchase of ice. There was, however, no documentary proof (as the plaintiff admitted) of the purchase of ice by Alaskan Ice and no documentary proof that Alaskan Ice and the plaintiff had agreed that Alaskan Ice should pay the rental and that such payments should be set off against the cost of ice supplied to Alaskan Ice by the plaintiff.

The plaintiff also asserted that there was another contra agreement between it and Afco. Afco bought ice from Alaskan Ice and agreed that the amount due from it should be set off against the rent payable for the premises. The statements of account between Alaskan Ice and Afco were prepared by the plaintiff and although they show a contra agreement between these two parties, there is no indication at all that Alaskan Ice was paying the rent that was being set off on behalf of the plaintiff. The plaintiff did not, it seems, seek to protect its position by documenting it. There is thus no proof of such an arrangement between the plaintiff and Afco.

The plaintiff ceased ice production activities on the premises on 28 January 2006. It admitted that from February 2006 onwards, no rent was paid for the premises. Its position was that it had the intention to remove the equipment from the premises and to sell it but that it did not do so because Afco wanted to use the equipment and this resulted in a verbal agreement under which Afco would set off the rent for the equipment against the rental that the plaintiff had to pay for the premises. This verbal agreement was denied by Afco which said it never used the equipment. Further, the evidence given in court that an agreement was arrived at was contrary to the position that the plaintiff took in a letter to Afco’s solicitors written on 19 February 2008. In that letter, the plaintiff said that despite numerous discussions held, the plaintiff and Afco could not arrive at an agreement. The plaintiff’s position is that Afco continued to operate the equipment until it broke down completely in July 2007.

On 3 January 2008, Afco’s solicitors sent the plaintiff a letter of demand claiming rental of $212,688 for the period from January 2006 to December 2007. On 19 February 2008, the plaintiff responded. It denied Afco’s allegations and asserted that Afco owed it money for the use of the equipment and for damage caused to the equipment.

On 26 February 2008, Afco commenced OS 71 against Alaskan Ice seeking, inter alia, leave to levy a distress for rent due in respect of the premises from January 2006 to December 2007. The ground of the application was that Afco had issued invoices to Alaskan Ice for rent since January 2005 and Alaskan Ice had in turn issued statements of account admitting its indebtedness to Afco for such rent. These documents were accepted by the District Court as evidencing the tenancy between Afco and Alaskan Ice and Afco was granted leave to levy a distress for rent amounting to $100,800, which represented the rental amount for the period of January 2007 to December 2007. The writ of distress was issued on 2 April 2008 and executed on 15 April 2008.

More than a month after the writ was executed (26 May 2008), the plaintiff filed a Notice of Claimant of Property taken in Execution. It claimed that it was the owner of, or, had right title and interest in, the equipment. The plaintiff’s Notice was, however, rejected by the Registry of the Subordinate Courts apparently because it did not fulfil procedural requirements. On 14 July 2008, the plaintiff filed Summons 9768 of 2008 in OS 71 seeking an injunction to restrain Afco from selling or otherwise disposing of the equipment and further, an order discharging the writ of distress or any sale made thereunder. This application was heard on 18 July 2008 and was totally unsuccessful. The plaintiff did not appeal and the equipment was sold on 21 July 2008. The plaintiff then took no further steps until the writ of summons herein was filed on 29 April 2011, almost three years later.

The pleadings

In its statement of claim, the plaintiff stated that its claim was against all the defendants for conversion and/or for wrongful distress of the equipment. It asserted that the second and third defendants were at the material time, the directors and shareholders of Afco. It went on to make the following allegations: On 3 January 2008, Afco had demanded payment of the rental arrears in respect of the premises; On 19 February 2008, the plaintiff had denied the allegation and claimed that instead it was Afco that owed the plaintiff money for the use of the equipment and demanded payment from Afco; Afco did not pay the claim but instead “quietly commenced” OS 71 against Alaskan Ice for possession and arrears of rent “when Alaskan Ice Distribution was not the tenant [of the premises]”; Afco obtained default judgment against Alaskan Ice and then seized the equipment. The plaintiff alleged that it was “at all material times the...

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2 books & journal articles
  • Tort Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2012, December 2012
    • 1 December 2012
    ...CDP and registered in the name of the CDP or its nominee. 24.9 The action in conversion in Comfort Management Pte Ltd v Afco East Pte Ltd[2012] 4 SLR 66 arose from prior court processes initiated by the parties. The first defendant (‘Afco’), the landlord of certain premises, had earlier app......
  • Land Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2012, December 2012
    • 1 December 2012
    ...the appeal was dismissed. Whether common law action in illegal distress existed 20.7 In Comfort Management Pte Ltd v Afco East Pte Ltd[2012] 4 SLR 66, the defendants had earlier commenced action against Alaskan Ice seeking, inter alia, leave to levy a distress to recover rental due in respe......

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