Kraze Entertainment (S) Pte Ltd v Marina Bay Sands Pte Ltd

• Jurisdiction: Singapore
• Judge: George Wei JC
• Judgment Date: 08 October 2013
• Neutral Citation: [2013] SGHC 207
• Court: High Court (Singapore)
• Docket Number: Suit No 401 of 2013 (Summons No 2671 of 2013)
• Year: 2013
• Published date: 11 October 2013
• Hearing Date: 20 August 2013
• Plaintiff Counsel: Tito Shane Isaac / Justin Chan / Ho Seng Giap (Tito Isaac & Co LLP)
• Defendant Counsel: Davinder Singh SC / Pardeep Singh Khosa / Manbeer Singh Mangat (Drew & Napier LLC)
• Subject Matter: Civil Procedure,Pleadings,Striking Out,Costs,Security
• Citation: [2013] SGHC 207

George Wei JC:

This case concerns an application to strike out the plaintiff’s writ of summons and statement of claim in Suit No 401 of 2013 (“the Second Action”) filed on 2 May 2013, under O 18 r 19(1) of the Rules of Court (Cap 332, Rev Ed 2006) (“ROC”) and/or the court’s inherent jurisdiction.

Background facts

The plaintiff is a company incorporated in Singapore and is part of a Korean-based group known as the Kraze Group of companies whose businesses are centred primarily on entertainment, food and beverage, information technology and investment. The statement of claim filed in the Second Action asserts that the plaintiff has a paid up share capital of approximately S$10,711,788.00.

The substantive dispute between the plaintiff and the defendant arises out of a lease agreement for certain premises situated at #B2-05, South Crystal Pavilion at the Marina Bay Sands Shoppes, Singapore. Under the terms of the lease (signed 18 November 2009), the defendant leased the premises to an associated company of the plaintiff called Krazetech (incorporated in the Republic of Korea) for a term of ten years on certain terms and conditions. One condition was that the premises were only to be used for “a premium nightclub, bar and restaurant under an international nightclub brand name first approved in writing by the Landlord”. In early December 2009, it was agreed by way of a letter of amendment that the premises would only be used for a premium nightclub, bar and restaurant under the brand names “Avalon” and “Pangaea”.

On 6 January 2010, an assignment agreement was entered between the plaintiff, the defendant and Krazetech, whereby Krazetech assigned its entire interest in the lease to the plaintiff. The plaintiff agreed to comply with all of the tenant’s obligations under the lease with effect from 31 December 2009 and during the residue of the term of the lease. Under the lease, the plaintiff was allowed a certain period of time for fitting out the premises. According to the pleadings, the possession date under the lease was 25 January 2011 and the fitting period would expire some 26 weeks later with the result that the term of the lease would begin on 26 July 2011. Subsequently in or about April 2011, the plaintiff ran into difficulties with Pan AV Asia Partners Pte Ltd (“Pan AV”). The latter had granted a licence to the plaintiff to use the trademarks “Pangaea” and “Avalon”. Pan AV had also entered into a management contract with the plaintiff to provide technical, operating, management and advisory services relating to the management and operation of a nightclub. The long and short of the story is that the dispute with Pan AV and the apparent breakdown in relationship placed the plaintiff in a difficult position under the lease agreement. According to the pleadings (paragraphs 20 and 22 of the statement of claim and paragraphs 27, 28 and 29 of the defence), negotiations or discussions took place between the plaintiff and defendant on 12 April 2011 over the possibility of launching under a different recognised international nightclub brand. By letter dated 21 April 2011, the defendant terminated the lease on the ground that the plaintiff was in repudiatory breach of its obligations. The plaintiff has denied that it was in repudiatory breach and asserts that the defendant’s purported termination was wrongful and invalid.

As a result of the aforementioned, the plaintiff commenced Suit No 410 of 2011 against the defendant on 7 June 2011 (“the First Action”) for declarations that the plaintiff was inter alia not in breach and that the defendant was not entitled to terminate the lease and that the lease remains valid and legally binding. The plaintiff also sought an order for specific performance and, in the alternative, damages for breach of the lease.

The First Action was subsequently struck out on 7 February 2013 for the plaintiff’s failure to comply with a peremptory order dated 15 January 2013. Since the claim was not time barred, the plaintiff decided to bring the Second Action on 2 May 2013 based on the same cause of action as set out in the First Action and against the same defendant. Consequently, on 23 May 2013, the defendant filed the application to have the Second Action struck out as an abuse of process of the court.

Procedural History leading to the striking out of the First Action

The Writ and Statement of Claim for the First Action was filed on 7 June 2011. This was followed by the Defence on 30 June 2011 and the Reply on 14 July 2011. Thereafter a number of interlocutory applications were made in respect of which costs were awarded to the defendant. These include the costs for Summons No 3850 of 2011 and Summons No 5860 of 2011. These costs were paid one and a half months and two weeks after the date of award respectively. Thereafter the plaintiff failed to pay four cost orders in relation to other interlocutory applications. In consequence the defendant sent a statutory demand to the plaintiff. These outstanding costs were finally paid on the last date for payment under the statutory demand.

The Security Summons

On 29 October 2012, the defendant applied by Summons No 5528 of 2012 for an order of security for costs of the First Action in the sum S$100,000 (“the Security Summons”). The Security Summons was heard by Assistant Registrar Shaun Leong (“AR Leong”) on 15 January 2013 and a peremptory order was granted. The plaintiff was required to furnish security in the requested sum by means of a first class banker’s guarantee failing which the plaintiff’s claims would be struck out. The final date for compliance was 5 February 2013, 4 pm. The plaintiff was also ordered to pay the costs of the security summons in the sum of S$4000 inclusive of disbursements. The peremptory order was granted in the Security Summons because AR Leong took the view that the plaintiff was unable to pay the costs of the defendant if the defence was successful and because the plaintiff had shown by its conduct to be dilatory in making payment of costs orders. It is to be noted that no appeal was made against the peremptory security for costs order.

On 17 January 2013, the defendant’s solicitors provided the plaintiff’s solicitors with a form of banker’s guarantee that was acceptable to them. The defendant received no response from the plaintiff. This was followed by two written requests for payment of the costs of the Security Summons on 17 January 2013 and 1 February 2013.

The EOT Summons and the Stay of Consequences Summons

On 1 February 2013 (some five days before the deadline under the peremptory order expired), the plaintiff took out Summons No 621 of 2013 requesting a 14-day extension of time for compliance with the peremptory order (“the EOT Summons”). No affidavit was filed in support and the EOT Summons was only served on the defendant on 4 February 2013, the day before the expiry of the deadline under the peremptory order. The hearing of the EOT Summons took place on 5 February 2013 before AR Leong. Even at this stage, no affidavit in support had been filed. The result was that the EOT Summons was dismissed.

On the same day, the plaintiff filed a notice of appeal, Registrar’s Appeal No 39 of 2013 (“RA 39”), against the decision of AR Leong not to grant the application for an extension of time. No affidavit was filed in support of the appeal. At the same time, the plaintiff took out a separate summons to stay the consequences of the decision of the EOT Summons (“the Stay of Consequences Summons”) pending RA 39. No affidavit was filed in support. An interim stay was granted by Assistant Registrar Justin Yeo and the summons was fixed for urgent hearing on 6February 2013. On the evening of 5 February 2013, the plaintiff filed the 13th Affidavit of Lee Jun Hoe (“LJH”) in support of the Stay of Consequences summons. On the next day, the Stay of Consequences Summons came before Assistant Registrar Eunice Chua who granted a stay but directed the plaintiff to fix an urgent date for the hearing of RA 39.

RA 39

RA 39 was heard by Justice Choo Han Teck (“Choo J”) on 7 February 2013. The appeal was dismissed and, as a result, the First Action was struck out with costs awarded to the defendant (See Kraze Entertainment (S) Pte Ltd v Marina Bay Sands Pte Ltd [2013] SGHC 39 (“Kraze 1”)). By letter dated 20 February 2013, the plaintiff requested leave to make further arguments to Choo J in respect of RA 39. The learned judge certified on 21 February 2013 that he did not wish to hear further arguments.

On 20 February 2013, the plaintiff had also filed for leave to appeal to the Court of Appeal against the decision of Choo J in RA 39. The application for leave to appeal was supported by the filing of the 14th affidavit of LJH. This application for leave was set down to be heard by Choo J on 14 March 2013. However, on 13 March 2013, the plaintiff withdrew the application for leave to appeal. In a letter of the same date to the defendant’s solicitors, the plaintiff’s solicitors stated that they had received instructions to withdraw the application for leave and to issue fresh proceedings in respect of the subject matter of the action.

The Second Action

On 2 May 2013, the plaintiff commenced the Second Action. Given the procedural history, it is of no surprise that the substantive disputes in the First Action and Second Action are essentially the same. The defendant entered an appearance but without prejudice to their right to strike out the proceedings as being an abuse of the process of court.

The current application, Summons No 2671 of 2013, was filed for an order that the Second Action be struck out (along with its supporting affidavit). On 4 June 2013, the plaintiff filed notice of change of solicitors. On 11 June 2013, the assistant registrar indicated that the plaintiff was to file a reply affidavit by 21 June 2013 followed by the defendant’s final affidavit in response...