Hean Nerng Holdings Pte Ltd v South East Enterprises (Singapore) Pte Ltd

JudgeFoo Tuat Yien
Judgment Date19 January 2005
Neutral Citation[2005] SGDC 14
CourtDistrict Court (Singapore)
Published date26 January 2005
Plaintiff CounselTeoh Tsu Yang (Teoh and Co)
Defendant CounselSadique Marican (Sadique Marican and Z M Amin)
Subject MatterCivil Procedure,Setting aside judgment
Citation[2005] SGDC 14

19 January 2005

Judgment reserved

District Judge Foo Tuat Yien


1 The plaintiffs, who provide subleases of land and general warehouse facilities, sublet part of their premises rented from the Jurong Town Corporation (‘JTC’) at 27 Jalan Buroh (‘premises’) to the defendants. The defendants deal with, among other things, import and export of wood working machines. When the defendants did not pay an increased rental deposit and rental up to 1 February 2004, the plaintiffs issued writ and entered judgment in default of appearance on 5 March 2004 for $27,940 with interest at 6% from date of writ to date of judgment. On 10 March 2004, the plaintiffs served the defendants with a copy of the judgment and warned that if payment was not made, they would levy execution without further reference. On 19 March 2004, the plaintiffs issued a writ of seizure and sale (‘WSS’), notice of which was given to the defendants. On 11 May 2004, the bailiff seized the defendants’ equipment and goods (‘seized items’) at the premises and posted notice of the seizure at the premises in accordance with Order 46 r 16. On 18 May 2004, the plaintiffs’ solicitors wrote to the Subordinate Courts’ Baliffs section to fix an auction date. The auction date was fixed for 11 June 2004. It was advertised in the Straits Times on 9 June 2004, after which, the bailiff sold the items by public auction at the premises on 11 June 2004 for $51,500.

2 The defendants’ managing director (‘MD’) said that after issue of the WSS, he had spoken to the plaintiffs’ deputy managing director, Kelvin Lim (‘Lim’) and they had agreed not to deal with or remove the items pending the defendants’ alleged intended sale of some items to a Pakistani party for $295,000. Contrary to this alleged agreement, the plaintiffs went ahead with the public auction. The defendants knew of the seizure and sale only when their MD visited the premises on 4 July 2004 and discovered several items missing. Subsequently, a security guard gave them a copy of the notice of seizure and sale on 5 July 2004. On 9 July 2004, the defendants’ solicitors wrote along these lines to the plaintiff’s solicitor to this effect and on 2 August 2004, the defendants applied to set aside the default judgment and the WSS. On 16 August 2004, the plaintiffs’ solicitors wrote denying the defendants’ allegations.

3 On 16 September 2004, the deputy registrar dismissed the defendants’ application to set aside the default judgment and the WSS. On 29 October 2004, I dismissed the defendants’ appeal. On 19 November 2004, I granted the defendants, leave to appeal against my decision not to set aside the judgment in default solely on the defendants’ contention that I had disregarded or failed to give sufficient weight to the inference to be drawn from a Works Order signed by both parties dated 17 February 2003 (‘works order’). These were the only grounds raised in the defendants’ affidavit supporting their application for leave to appeal. The defendants argue that the lease agreement is not enforceable as parties had intended to use the works order to deceive JTC that the defendants’ equipment and goods were at the premises for the plaintiffs to service instead of a sublet agreement. This is illegal and against public policy. The plaintiffs have, in turn, appealed against my decision granting the defendants leave to appeal.


4 The only issue in this appeal to the High Court is that stated in paragraph 3. All other issues, that is whether payment of the rental deposit was due or should be taken in to account to offset the amounts due to the plaintiff, the setting aside of the WSS on the grounds of the plaintiffs’ alleged wrongful or negligent execution of the WSS are not the subject of appeal.


5 Parties had negotiated a ‘warehousing service agreement’ for the defendants to use part of the premises for the storage and servicing of carpentry machines for 3 months from 1 March 2003 at a monthly service charge of $3,120 (inclusive of GST). These terms were in a document dated 17 February 2003, which both parties did not sign. This document provided, that should the use of the premises for the storage or servicing of the carpentry equipment be disapproved by any government/competent authority, either party could terminate. The agreement was not made subject to JTC’s approval nor did it require that JTC’s approval for the sublet be obtained. On 21 February 2003, parties signed the works order on the plaintiffs’ letterhead stating that the plaintiffs were to service the items listed for a fixed rate of $30,000 with progressive payment and payment of a service deposit of $3,000.

6 There is no dispute that the plaintiff did not render any services to or invoice the defendants under the Works Order. The plaintiffs’ version is that they had simply prepared this works order at the defendants’ request for the latter’s purpose and did not make further enquiries. The defendants say that the works order was a document of convenience, signed at the plaintiffs’ request to make it appear that the defendants’ goods were at the premises for servicing. It is clear that both parties were aware of and accepted that there is a condition in JTC leases of industrial property, that JTC’s approval for subletting is required. The defendants had previously occupied JTC premises and would have been aware of this requirement. I accept that both parties signed the works order with the intention of, reserving to themselves the option to present this works order to JTC, should the need arise.

7 The case of Chye Lian Huat Sawmill Co v Hean Nerng Industrial Pte Ltd [2003] 2 SLR 23 are relevant on the issues of illegality and...

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