Khng Thian Huat and Another v Riduan bin Yusof and Another

• Jurisdiction: Singapore
• Judge: V K Rajah JC
• Judgment Date: 21 October 2004
• Neutral Citation: [2004] SGHC 237
• Docket Number: Suit No 929 of 2003
• Date: 21 October 2004
• Published date: 26 October 2004
• Year: 2004
• Plaintiff Counsel: Hri Kumar, Tan Teck San Kelvin and Wong Chin Soon Wilson (Drew and Napier LLC)
• Citation: [2004] SGHC 237
• Defendant Counsel: Mohamed Hashim and N Kanagavijayan (A Mohamed Hashim and Madelene Sng)
• Court: High Court (Singapore)
• Subject Matter: Whether property being occupied purely on periodic basis,Civil Procedure,Creation of tenancy,Principles,Failure to hand over property in same condition as at commencement of third tenancy,Landlord and Tenant,Court's approach to assessment of costs in such circumstances,Whether letter of intent sufficient acknowledgment and acceptance of existence of tenancy,Order 59 rr 5, 6A Rules of Court (Cap 322, R 5, 2004 Rev Ed),Whether tenants wrongfully holding over property,Factors to consider,Proceedings not conclusively resulting in triumph for any party,Covenants,Costs,Whether tenant obliged to deliver property inclusive of alterations made to property during first and second tenancies,Whether issue-based approach to allocation of costs appropriate

21 October 2004

V K Rajah JC:

1 Legal costs conventionally follow the event or in common parlance, the result of the proceedings. However from time to time, proceedings may not conclusively result in triumph for any of the parties. In such cases, should the court be inclined to eschew the normal practice of granting costs on a broad all-embracing basis? When should costs be awarded solely by reference to the outcome of each of the various issues canvassed? The resolution of this issue emerged as a significant point of interest in these proceedings.

2 The first and second plaintiffs, who are husband and wife respectively, are the owners of 95 Telok Kurau Road, Singapore 279022 (“the property”). The first defendant was the tenant of the property. The second defendant, the first defendant’s wife, owned and managed a kindergarten at the property for the duration of the first defendant’s tenancies. The first tenancy initially ran from 1 January 1995 to 31 March 1997 (“the first tenancy”) but was subsequently extended from 1 April 1997 to 31 March 2000 (“the second tenancy”).

3 In January 2000, the first plaintiff signed a letter of intent (“the letter of intent”) with the first defendant to let the property for a further period from 1 April 2000 to 31 March 2003 (“the third tenancy”). The material terms of the third tenancy were contained in the letter of intent that also stipulated that “[a]ll other terms and conditions shall be stated in an official lease agreement to be signed by both parties” (“the official lease”). For a variety of reasons, the precise details of which are now largely irrelevant, the official lease was not signed.

4 In these proceedings the plaintiffs claimed against the defendants double rent for holding over the property after the expiry of the second tenancy, damages for failing to restore the property to its original condition when the property was eventually vacated on 10 April 2003, as well as the consequential loss of usage arising from the property’s state of disrepair. At the conclusion of the trial, I dismissed the plaintiffs’ claim for double rent but allowed their claim for damage to the property and loss of its usage for the period required to effect restorative repairs. I also ordered that the parties bear their own costs incurred in these proceedings. The first defendant, after discharging his solicitors, now appeals against my decision on damages as well as costs.

5 I shall briefly deal with the events leading to the dispute, as it will assist in clarifying my decision on the costs order.

Factual matrix

6 Soon after the letter of intent was signed, the parties’ relationship rapidly deteriorated. The first defendant was habitually late in making rental payments. Promises were made and repeatedly broken; excuses were given and inexplicably forgotten; deadlines for payment were serially overlooked by the first defendant. The defendants claimed to be having cashflow problems. Quite understandably the plaintiffs became increasingly frustrated. The defendants in turn claimed that the plaintiffs lacked empathy and had themselves repeatedly reneged on their oral commitments. Deep feelings of mistrust and unhappiness permeated the parties’ relationship. The official lease was not signed. In these proceedings each side vehemently and unflinchingly assigned the sole responsibility for this unhappy state of affairs to the other side.

7 After a lapse of several months, matters came to a head on 2 March 2001. The plaintiffs sent a letter to the first defendant asserting that the property was being occupied purely on a periodic basis, thereby denying the validity and indeed existence of the third tenancy. The exchange of solicitors’ correspondence that swiftly followed only served to exacerbate the tension between the parties. In addition, the plaintiffs received a notice from the Urban Redevelopment Authority (“URA”) drawing their attention to complaints about the usage of the property. The complaints related to noise and traffic congestion generated by the kindergarten’s operations. The URA warned the plaintiffs that if the complaints were not satisfactorily addressed it would have to reappraise approval of the existing usage of the property. The plaintiffs drew the defendants’ attention to this letter but were not satisfied with the measures taken by the defendants. On 29 March 2001, the plaintiffs’ solicitors served on the defendants a notice of “termination”. The defendants immediately rejected the unilateral termination of their occupancy rights and refused to vacate the premises. In addition, they refused the plaintiffs any access to the property when the plaintiffs sought to inspect it.

The plaintiffs’ claims

8 The plaintiffs then asserted that the first defendant was liable for double rent pursuant to s 28(4) of the Civil Law Act (Cap 43, 1999 Rev Ed) for wrongfully holding over the property. Proceedings were commenced against the defendants in the District Court. The plaintiffs’ claim exponentially increased with the passage of time. After the plaintiffs’ claim for summary proceedings failed, the proceedings were transferred by consent to the High Court. The double rent claimed in these proceedings extended from 1 May 2001 to 10 April 2003, the latter being the date the plaintiffs finally gained access to the property. After deducting the rental payments actually paid during this period, the plaintiffs’ total claim for double rent amounted to $458,000. I dismissed the plaintiffs’ claim on the basis that, notwithstanding the omission to sign the official lease, both parties had by their earlier conduct acknowledged and accepted the existence of the third tenancy. The plaintiffs have not appealed against this decision.

9 The plaintiffs also claimed compensation for the damage caused by the defendant’s failure to hand over the property in the same condition as it was at the commencement of the third tenancy. It could not really be disputed that there was some damage to the property caused by the defendants. The real issues were the degree of damage, the apportionment for fair wear and tear and the quantum of the claim. Both parties engaged experts to assess the quantum. The disparity between their respective experts’ evidence was unfortunately quite substantial. Acceding to the court’s suggestion, both parties’ solicitors sensibly agreed to abide by the decision of a court-appointed expert on the issue of identifying and quantifying the alleged damage to the property. The agreed terms of reference negotiated by the parties included the following stipulations:

5 The Expert shall determine the time that it would take to perform rectification works …

6 The Expert’s decision on the matters … shall be final and binding on both parties, and no appeal or revision shall be brought in respect of the Expert’s decision.

[emphasis added].

The terms of reference also directed the court expert to allow both parties to make submissions and adduce evidence for her consideration. The court expert subsequently carried out three site inspections and duly met the parties’ experts. The court expert thereafter concluded that the defendants were responsible for damage to the property in the sum of $110,575.00, in addition to the sum of $15,595.00 which the parties’ experts had earlier jointly accepted as the sum due from the defendants. She also stated that it would have taken seven weeks to repair the damage and reinstate the property.

Findings

10 I accepted the court expert’s views and findings. Defence counsel had no complaints about the process the court expert had employed in arriving at her conclusions, which to all intents and purposes appeared to be amply and objectively supported by facts. Indeed, it was plainly not open to the defendants to take issue with her “decision” in light of the explicit agreement the parties had reached that it was to be “final and binding”. Damages were awarded only against the first defendant qua tenant and on the basis of the plaintiffs’ pleaded case. The first defendant was held liable for damages in the sum of $79,170.00 derived in the following manner:

(a) compensation in the sum of $110,575.00 as assessed by the court expert, plus the sum of $15,595.00 agreed as being due to the plaintiffs by the parties’ experts;

(b) loss of use of property for seven weeks assessed on the basis of the applicable rental amounting to a total of $40,250.00;

(c) reimbursement of the sum of $2,750.00 being the portion of the court expert’s fees paid earlier by the plaintiffs;

less credit for the sum of $90,000.00 which had been held by the plaintiffs as a security deposit for the third tenancy.

11 The sole legal issue to be determined in relation to the plaintiffs’ claim for property damage was whether the first defendant was obliged to deliver the property inclusive of the additions and alterations (“alterations”) made to the property before the commencement of the third tenancy. The defendants obdurately took the position that they were contractually obliged to deliver the property to the plaintiffs in its original state, ie at the commencement of the first tenancy.

12 I upheld the defendants’ submission only in so far as it asserted that the terms of the third tenancy...