Deputy Registrar Kim Bum Soo:
This is a landlord-tenant dispute. The plaintiff-landlords (“the landlords”) have brought an application for summary judgment. The landlords claim that the defendant-tenant (“the tenant”) has overstayed his welcome. They claim that the tenancy agreement ended on 31 January 2022 and was not renewed. The tenant vigorously denies this. He says that the tenancy agreement was validly renewed. He remains on the premises till this day.
The issue to be determined
Everything, therefore, turns on whether the tenancy agreement was validly renewed and the interpretation of the clauses dealing with renewal of the tenancy. There were two different clauses dealing with tenancy renewal and there was great argument at the hearing about the relationship/interaction between these clauses. I will, however, focus on just one of these clauses (as the tenant urged me to do), because the tenant’s position is shaky, even when his case is taken at its highest.
The clause in question (“the renewal clause”) reads:
The tenant shall have the guaranteed option to renew the lease for a further period of one (1) year with the renewal period commencing at the expiration of the initial lease term on 31st January 2022 at a rent to be mutually agreed between the parties, provided always that any increase in the rent is limited to a maximum of 10% of S$2,800.
Crucially, the tenant conceded at the hearing that the operation of this clause is conditional on there being mutually agreed rent:
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| Court: | […] Is the guaranteed option to renew subject to the condition that there is a mutually agreed rent? […] |
| Defendant: | To address your concerns – is it subject to mutually agreed rent? Yes that’s quite clear. I believe I’ve already explained. The condition on mutually agreed rent in my view is interpreted as a number between the range of 1 and 3088. So the tenant has the right to propose and negotiate with the landlord within those perimeters. Again if the negotiations do not come to a conclusion, there’s nothing arrived at then the upper limit of $3,088 would be deemed as the mutually agreed rent. The condition of mutually agreed rent is expressed within that bound. If there is no expression then there is no exercise. |
| (emphasis mine) |
This means that whether the tenancy was renewed centres on a single factual issue: was there mutual agreement on the rent to be paid for an extended tenancy? I answer this in the negative and grant summary judgment of the claim.
My decision
I should make clear from the outset that this was an application brought under the new Rules of Court 2021 (“ROC 2021”). However, given that the statutory language in the applicable provisions were broadly similar, I proceeded on the basis that the same principles from O. 14 rr. 1 – 4 Rules of Court 2014 (“ROC 2014”) applied to ROC 2021’s O. 9 r. 17.
The starting point in a summary judgment application is that the Plaintiff must fulfil certain conditions to establish a prima facie case for summary judgment: the statement of claim must have been served on the defendant; the defendant must have served a defence to the statement of claim; the affidavit in support of the application must comply with the requirements of [O. 14 r. 2]; and the O. 14 application must be filed not more than 28 days after the pleadings in the action are deemed to be closed. (Singapore Civil Procedure 2021 vol 1 (Cavinder Bull gen ed) (Sweet & Maxwell, 2021) at para 14/1/4 (“The White Book”)
There was no serious suggestion that these largely procedural requirements were neglected. However, I am somewhat doubtful that the fulfilment of these procedural requirements alone would establish a prima facie case for summary judgment, as the White Book seems to suggest (“If […] these conditions are satisfied, the plaintiff will have established a prima facie case for summary judgment”: para 14/1/4). If anything, the authorities appear to evaluate the substantive merits of the plaintiff’s claim (or the defendant’s counterclaim) before making an assessment about whether a prima facie case for summary judgment has been made out (see for example, Ho Choon Han v SCP Holdings Pte Ltd [2022] SGHC 260 at [24] – [44]; and Quek Jin Oon v Goh Chin Soon [2020] SGHC 246 at [24] – [31]).
On the present facts, the landlords appear to have made out a prima facie case, even on a substantive basis. There was no dispute about the validity of the original tenancy agreement. There was no denying that the tenancy ended on 31 January 2022. And everyone agreed that the tenant had stayed on the premises after the original tenancy agreement had ended. It is therefore clear to me that, at least on a prima facie basis, the tenant has been holding over and is liable to pay for the period held over.
The landlords’ prima faice case having been established, the tactical burden then shifts to the tenant who, in order to obtain leave to defend, must establish that there is a fair or reasonable probability that he has a real or bona fide defence (see Ritzland Investment Pte Ltd v Grace Management & Consultancy Services Pte Ltd [2014] 2 SLR 1342 (“Ritzland Investment”) at [43]–[44] and M2B World Asia Pacific Pte Ltd v Matsumura Akihiko [2015] 1 SLR 325 (“M2B World”) at [17]). As stated earlier, this means that the tenant must show that there is a fair or reasonable probability that the parties had mutually agreed on the rent to be paid for a lease extension. This could alternatively be framed as whether the existence of such a mutual agreement is a triable issue.
The tenant’s only argument in this regard was that the landlords had “granted [him] a prospective permanent rental reduction of SDG (sic) 300 “going forward” for the entire term of my tenancy (including any renewal)” (emphasis mine). Accordingly, he claims that there was “agreement between parties” and this rental rate was “amicably negotiated and agreed upon by parties”.
To my mind, this assertion was “inherently improbable” (see M2B World at [19], citing Bank Negara Malaysia v Mohd Ismail [1992] 1 MLJ 400 with approval), and ultimately not a tenable basis for any sort of defence. Yes, the landlords granted a $300/month rental reduction from the originally agreed rental rate of $2,800/month. However, the circumstances in which the rental reduction was granted suggest that parties did not intend for the tenancy to be renewed at the $2,500/month rate. The rental reduction was a purely gratuitous gesture, given during COVID-19 to help the tenant tide over the pandemic period. Understood in its proper context, the rental reduction was a goodwill gesture at best, rather than some kind of binding mutual agreement about the terms of a future rental renewal; and there was nothing in the documents or the correspondence between parties which explicitly suggested that this rental reduction was to be permanent and for the new rental rate of $2,500/month to apply beyond the original tenancy agreement. In fact, there was no mention of any rental renewal in the correspondence leading up to the rental reduction.
True, there was some suggestion that the $2,500/month rental rate was to apply “going forward”. But in my view, the use of those words simply could not amount to a mutual agreement between parties as to the rate for any future rental renewal. I reproduce the Whatsapp correspondence here in full for ease of reference:
01/12/2020, 16:27 – Cleo (the tenant’s wife):
Dear [Landlords], thank you for granting us the statutory rental relief for the last 4 months.
We are requesting a rental reduction of 20% going forward. The last few months have been difficult for everyone but especially for us. There hasn’t been much improvement since we entered phase 2 of the circuit breaker. The reduction will help us lower our operating costs and will...
