Deans Property Pte Ltd v Mortazavy Pte Ltd

CourtDistrict Court (Singapore)
JudgeTan May Tee
Judgment Date03 July 2007
Neutral Citation[2007] SGDC 192
Citation[2007] SGDC 192
Published date11 September 2007
Plaintiff CounselLeslie Yeo (Leslie Yeo & Associates)
Defendant CounselBasil Ong (PK Wong & Associates LLC)

3 July 2007

District Judge Tan May Tee


1 The property at 31 Scotts Road, Singapore 228225 (“the Property”) is owned by the Government of Singapore. The Plaintiffs obtained a lease of the Property from the Singapore Government through the Collector of Land Revenue for three (3) years from 1 March 2001 at the monthly rental of $23,500 excluding GST. This suit arose from a sub-tenancy of the Property granted by the Plaintiffs to the Defendants. The Property comprised a main building fronting Scotts Road and an annexe. At all material times, the Plaintiffs occupied the annexe building at the rear of the Property. The main building was sub-tenanted to the Defendants at the monthly rental of $18,000 excluding GST for a period of 2 years from 27 February 2002 to 27 February 2004. The Defendants used the premises for their business dealing in retail of hand-knotted carpets and rugs of Persian origin.

2 Although it was the common understanding between the parties that the rental payable monthly for the premises was $18,000.00 plus the prevailing GST, and the Defendants had been invoiced on this basis, the Plaintiffs had structured the relationship with the Defendants in the form of 2 written agreements; the first was called a Sub-Tenancy Agreement which covered the lease of the premises of the main building at the monthly rental of $13,000.00, the second was a Hiring Agreement supplemental to the Sub-Tenancy Agreement which covered the hire of furniture, fittings and fixtures on the premises at the monthly hire charge of $5,000.00. Had the Defendants complied strictly with the terms of the agreements by making the monthly rent payments in full and on time, there would have been no difficulty with the mechanism of the written agreements chosen by the Plaintiffs. Unfortunately for them, as early as the third month[note: 1] into the tenancy, the Defendants were late with their rental payments. To compound this further, the payments made by the Defendants were made in “dribs and drabs” such that with each payment tendered by the Defendants, the Plaintiffs had to apportion parts of it to cover payments for arrears of previous months, late payment interest charges and other accrued liabilities of the Defendants up to the date payments were received.

3 In August 2003 when the Plaintiffs’ account showed the Defendants to be in substantial arrears of over $40,000.00, the Plaintiffs applied by way of ex parte originating summons for the Court to issue a writ of distress against the Defendants’ goods pursuant to the provisions of the Distress Act (Cap. 84). The Court granted leave for the Plaintiffs to proceed, and Writ of Distress 242 of 2003 was issued and executed at the premises. The Defendants made various payments after the execution of the writ of distress, but their goods were not released by the Bailiff until 2 January 2004.

4 The release of their goods did not spell the end of the Defendants’ troubles, however, because within a short spell of 5 days, on 7 January 2004, the Plaintiffs had caused another writ of distress to be executed. The Plaintiffs had in fact before the end of December 2003 made another ex parte application in Originating Summons 711 of 2003 for leave to issue another writ of distress before they had authorised the Bailiff to release the goods distrained under the earlier writ. This second writ, Writ of Distress 334 of 2003, having been executed on 7 January 2004, effectively meant that the Defendants’ goods remained under seizure. By the Plaintiffs’ accounting, the Defendants were required to pay a sum of $60,907.94 being arrears up to December 2003. This was disputed by the Defendants who contended that the Plaintiffs had wrongly appropriated their previous payments.

5 As the Defendants refused to pay the amounts demanded by the Plaintiffs, the parties remained at an impasse. The Defendants then instructed solicitors to apply to Court for the release of their property[note: 2]. It transpired that after several hearings, the Court then ordered that the goods be released to the Defendants upon payment being tendered to Court. It was also ordered[note: 3] that the proceedings commenced by way of the originating summons in Originating Summons 711 of 2003 be continued as if the matter had been begun by writ and timelines were set out by the Court for the delivery of pleadings by both parties. The record shows that the order made and the directions spelt out by the Court had not been complied with by either party. Neither was any extension of time sought for their compliance. Instead, almost a year later, the Plaintiffs issued the writ of summons in this action claiming the unpaid arrears and other payments that had fallen due after the expiry of the sub-tenancy agreement.

The pleadings

6 The writ of summons against the Defendants commencing this action was issued on 14 April 2005 and endorsed with a simple Statement of Claim in which the Plaintiffs pleaded as follows:

‘1. The Plaintiffs are the Landlord of the property at 31 Scotts Road (Main Building) Singapore 228225 (“the property”) and the Defendants are the former tenants.

2. By a Sub-Tenancy Agreement dated 9 February 2002 (“the Agreement”), the Plaintiffs agreed to let the property to the Defendants for a term commencing 27 February 2002 until 27 February 2004 at a monthly rent of S$18,000 excluding the prevailing GST. Clause 4(4) further provides that the Defendants shall pay to the Plaintiffs such penalty or penalties for late payment at the interest rate of 9% per annum or as may be prescribed by the Plaintiffs from time to time.

3. Further to the Agreement, the Defendants had also agreed to reimburse the Plaintiffs in full for all of the utilities charges incurred by the Defendants with the Singapore Power Supply Ltd.

4. In breach of the Agreement, the Defendants failed to pay the rental for the balance September, October, November and December 2003. After execution under the Writ of Distress No. 711 of 2003, the sum of $48,539.03 paid by the Defendants was utilized to set-off the rental arrears, leaving a balance of S$12,368.91 outstanding.

5. In breach of the Agreement, the Defendants failed to make payment for rent from January 2004 to 27 February 2004, amounting to S$37,800. In further breach of clause 2(16) of the Agreement, the Defendants had failed to deliver vacant possession upon expiry of the lease on 27 February 2004, and are thus liable to pay double rent until delivery of possession.

6. As the Defendants only delivered vacant possession of the premises on 30 April 2004, the Defendants are liable for the sum of $114,703.16, the particulars of which are as follows:-

Breakdown of the Outstanding sum under paragraph 6

January 2004

$ 18,900.00

February 2004

$ 18,900.00

Double rent for 28 & 29 February 2004

$ 1,303.16

Double rent for March 2004

$ 37,800.00

Double rent for April 2004

$ 37,800.00



7. Despite repeated reminders, the Defendants had to date failed to make payment for the rental arrears.”

7 The Plaintiffs’ writ of summons prayed for judgment against the Defendants for the sums of S$12,368.91 and S$114,703.16 under paragraphs 4 and 6 of the Statement of Claim respectively together with interest and costs.

8 In their Defence filed on 17 May 2005, the Defendants began by denying the Plaintiffs’ allegations that they were in breach of their obligations. They included a counterclaim against the Plaintiffs for a declaration that the writs of distress had been wrongly issued and damages arising from the wrongful distress. As the proper determination of the issues in the action is founded on the pleadings filed by the parties, it would be convenient to also set out the relevant portions of the Defence and Counterclaim which are on the following terms:

“2. Paragraph 2 of the Statement of Claim is denied and the Defendants aver that by a sub-tenancy agreement dated 9 February 2002 (“the sub-tenancy agreement”), the Plaintiffs agreed to let the property to the Defendants from 27 February 2002 to 27 February 2004 at a monthly rental of $13,000.00 excluding the prevailing GST.

3. By a separate hiring agreement also dated 9 February 2002, the Plaintiffs agreed to let the furniture, fixtures, fittings and appliances (“the furniture”) found in the property to the Defendants at a monthly hire charge of $5,000.00 excluding the prevailing GST (“the hiring agreement”).

4. The Defendants aver that the sum claimed by the Plaintiffs pursuant to Clause 4(4) of the sub-tenancy agreement is not a genuine pre-estimate of the Plaintiffs’ loss and is an irrecoverable penalty.

5. Paragraph 3 of the Statement of Claim is admitted save that the Defendants aver that a separate meter to record their consumption of utilities was installed at their cost in December 2002. In respect of the amount of utilities consumed by the Defendants between February 2002 and December 2002, it was agreed between the Plaintiffs and the Defendants that the latter would pay an amount based on the average of the first two months of readings taken after the installation of the meter.

6. Paragraph 4 of the Statement of Claim is denied and the Defendants aver that the Plaintiffs had issued Writ of Distress no. 334 of 2003 pursuant to Originating Summons no. 711 of 2003 in respect of arrears of rental and hire charges for the months of September, October, November and December 2003. The Defendants deny that there was any outstanding balance due to the Plaintiffs after payment was made in respect of the arrears in rental.

7. Thereafter the Plaintiffs wrongly continued to distrain on the Defendants’ property even though there were no more arrears in rental.

8. Paragraph 5 of the Statement of Claim is denied and the Defendants aver that rental for the months of January and February 2004 amounted to only $26,000.00. The Defendants further aver that the Plaintiffs were holding a deposit of $26,000.00 that...

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