Lemon Grass Pte Ltd v Peranakan Place Complex Pte Ltd

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JC
• Judgment Date: 24 May 2002
• Neutral Citation: [2002] SGHC 113
• Date: 24 May 2002
• Subject Matter: Contractual terms,Plaintiffs alleging existence of such rights pursuant to collateral agreement,Whether plaintiffs have proprietary interest over such rights,Plaintiffs claiming such rights,Plaintiffs claiming against defendant landlord for breach of agreement,s 94(b) Evidence Act (Cap 97, 1997 Ed),Whether collateral agreement admissible in evidence,Whether existence of collateral agreement proven,Right of access and right of way,Whether breach of agreement,Tenancy agreement,Contract,Whether provision of such rights in agreement
• Docket Number: Suit No 1311 of 2001
• Published date: 19 September 2003
• Defendant Counsel: Lawrence Quahe and Chenthil Kumarasingam (Harry Elias Partnership)
• Court: High Court (Singapore)
• Plaintiff Counsel: Tan Teng Muan and Kwok Mei Yui Deanna (Mallal & Namazie)

Judgment Cur Adv Vult

GROUNDS OF DECISION

1. The Plaintiffs, Lemon Grass Pte Limited ("Lemon Grass"), until 5 March 2002, carried on business in the name of Esmirada Mediterranean & Wine Cellar ("Esmirada") at rented premises in Peranakan Place Complex ("Peranakan Place"). Peranakan Place is a row of restored conservation shophouses situated along Orchard Road, next to Centrepoint.

2. In 1993, Esmirada occupied units 01-01/02 ("the Original Space"). The tenancy agreement dated 13 December 1993 was between GGW Gastrofun Pte Ltd ("GGW") and the Defendants, Peranakan Place Complex Pte Ltd. Wolfgang Lapper (PW1) and two others were at all material times the owners of GGW. In 1994, GGW rented more space ("the Extension") in Peranakan Place.

3. Following a joint venture in March 1995, Lemon Grass acquired the restaurant business from GGW and, by a Novation Agreement dated 19 March 1996, took over the tenancies with effect from 1 June 1995.

4. In 1996, Esmirada was doing very well. The common corridor was often crowded with people waiting for a table. On 26 August 1996, Lemon Grass rented a section of the corridor immediately outside the restaurant ("the Additional Space") for $2,000 a month, effective 1 October 1996. It became a bar-cum-waiting area for the patrons of Esmirada.

5. Subsequently, all three areas occupied by Esmirada were brought under one tenancy agreement dated 30 January 1997. During the course of that two-year tenancy, in November 1997, the Defendants leased unit 01/09A ("the Frontage") to Lemon Grass. On 4 January 1999, Lemon Grass renewed the tenancy for all four areas - the Original Space, Extension, Additional Space and Frontage - for a period of one year.

6. The last renewal was in December 1999 for a three-year term, effective 1^st January 2000. That tenancy agreement dated 29 December 1999 was to expire on 31 December 2002 ("the December 1999 lease").

7. In March 1995, Wolfgang Lapper and Ong Kok Thai, a director and shareholder of the Defendants, entered into a joint venture to operate various food outlets in Peranakan Place. Consequently, four joint venture companies were set up.

8. Lemon Grass was one of the joint venture companies and it was incorporated on 1^st June 1995. Another was Mustard Seed Investment Holdings Pte Ltd ("Mustard Seed"). Peppercorn Restaurant Pte Ltd operated Papa Joe’s Grill Cantina Bar ("Papa Joe’s") on the second floor of Peranakan Place. The fourth joint venture company PJ’s Restaurant Pte Ltd, to all intents and purposes, was a dormant company.

9. Mr. Lapper and Mr. Ong were equal shareholders and directors of the joint venture companies. All profits and losses of the four joint venture companies were shared equally between both Mr. Lapper and Mr. Ong. Mustard Seed handled the administrative needs of the joint venture companies. Leong Siew Geok was in charge of the day-to-day running of Mustard Seed. Ms Leong is Mr. Ong’s wife and the other director and shareholder of the Defendants.

10. Besides being the Plaintiffs’ landlords, the Defendants owned the business known as Chilli Buddys (now renamed Papa Joe’s Outdoor). The arrangement between Mr. Lapper and Mr. Ong was for Mr. Lapper to manage Esmirada and two other food outlets - Papa Joe’s and Chilli Buddys - for a monthly management fee of $10,000 payable by Mustard Seed to GGW. Mr. Lapper and Mr. Ong were to equally share all of Chilli Buddys’ profits and losses.

11. The joint venture ended on 31 March 1998.

12. At all material times, Delifrance Singapore Pte Ltd ("Delifrance") was a tenant of adjoining premises in Peranakan Place. It is the Defendants’ case that a section of the common corridor on the Delifrance side was reconfigured to lettable space and leased to Delifrance. At the doorway separating Delifrance and Esmirada, was a rope curtain and behind that a roller shutter door. During business hours, customers could walk through the rope curtain from Esmirada across Delifrance to the ground floor toilets. The roller shutter door would be pulled down whenever the establishment was closed for business.

13. Delifrance gave up its premises on 15 September 2001. BreadTalk Pte Ltd ("BreadTalk"), the new tenants required their side of the doorway boarded up for business and operational reasons. According to the Defendants, the doorway was boarded up on 3 September 2001 for reinstatement works by Delifrance and subsequently on 21 September 2001 after BreadTalk took over the premises.

14. Lemon Grass objected to the doorway being sealed as it deprived their customers of the short cut to the ground floor toilets. For the past five years, members of the public including patrons of the other outlets in Peranakan Place had also made use of that short cut.

15. Lemon Grass claimed that they would not be able to continue to operate a fine dining establishment at the premises. Without that internal access, Lemon Grass claimed that Esmirada’s business had suffered and continues to suffer losses as a consequence.

16. At the commencement date of the 1993 lease, there was a common corridor outside Esmirada. Access to the ground floor toilets located within the common parts of Peranakan Place was through that corridor. The Plaintiffs’ pleaded case is that in August 1996, Mr. Ong on behalf of the Defendants represented that the way to the ground floor toilets would be the same as before. The Plaintiffs then designed and renovated the Additional Space to accommodate a passageway to the ground floor toilets.

17. The Defendants deny any such conversation, understanding or agreement.

18. At all material times, access to the ground floor toilets could be through two external routes. In these proceedings, they are referred to as the "Orchard Road" route or "Alley Bar " route. The Plaintiffs’ contention is that the external routes are inconvenient for their customers.

19. Lemon Grass issued proceedings on 16 October 2001. In this action, the right of access and right of way claimed by them are put forward on four alternative basis:

(i) Breach of Clause 1(b) of the December 1999 lease;

(ii) An enforceable collateral contract with the Defendants pursuant to which right of access and right of way were granted;

(iii) A proprietary interest based on proprietary estoppel; and

(iv) Derogation from grant of the December 1999 lease.

20. In paragraph 11 of the Re-Amended Statement of Claim, Lemon Grass averred that it was an implied term of the December 1999 lease that the rights claimed were for the duration of that tenancy. Moreover, the doorway was an exit and was part of the December 1999 lease.

21. It is common ground that the day after the conclusion of the hearing, the Plaintiffs on 5 March 2002 vacated the premises before the end of the tenancy. Lemon Grass are now pursuing their alternative claim for damages; and for a declaration that they are entitled to rescind the December 1999 lease as the Defendants had by their conduct repudiated or breached that lease and/or had derogated from the grant of the December 1999 lease.

22. The Defendants filed a Counterclaim to seek reimbursement of electrical and water charges consumed by Lemon Grass. The Defendants are no longer pursuing their other claim for breaches of the December 1999 lease.

The December 1999 lease

23. It is only logical to first look at the terms of the tenancy agreement dated 29 December 1999 ("December 1999 lease") and then the Delifrance lease before considering the Plaintiffs’ alternative claims based on collateral contract or proprietary estoppel.

24. The Plaintiffs’ pleaded case in paragraph 9 of the Re-Amended Statement of Claim is that Clause 1(b) of the December 1999 (and for that matter all previous tenancy agreements) granted to them a right of access to the ground floor toilets from Esmirada and through adjoining premises occupied by Delifrance ("Adjacent Premises").

25. In approaching this claim, I had in mind the observations of Mummery L.J. in West v Sharp [2000] 79 P & CR 327 at p332:

"The nature and extent of a right of way created by an express grant depends on the language of the deed of grant, construed in the context of the circumstances surrounding its execution including the nature of the place over which the right is granted. …"

26. Clause 1 of the December 1999 lease reads:

"1. In consideration of the rent service charge and Tenant’s agreements and stipulations hereinafter reserved and contained the Landlord hereby lets unto the Tenant and the Tenant takes ALL the premises more particularly described in the Schedule hereto (hereinafter referred to as the "Premises") being part of the complex of buildings known as "PERANAKAN PLACE" (hereinafter referred to as "the Buildings") together with (but to the exclusion of all other liberties easements rights or advantages and subject to the Landlord’s right to refuse access hereinafter contained):-

1. the right for the Tenant and others duly authorised by the Tenant but only so far as necessary and as the Landlord can lawfully grant the same of ingress to and egress from the Premises in over and along all the usual entrances landings and passage-ways leading thereto in common with the Landlord and all others so authorised by the Landlord and all other persons entitled thereto;
2. the right for the Tenant and others duly authorised by the Tenant to the user of such sufficient toilet facilities in the Buildings as shall be designated from time to time in writing by the Landlord but such user shall be in common with the Landlord and all others so authorised by the Landlord and all other person so entitled thereto;…."

27. In the ordinary and natural meaning of the language, Clause 1(b) simply gives to the tenant and those authorised by it permission to use the toilet facilities located in the common parts of Peranakan Place. The word "sufficient" in Clause 1(b) relates to the toilet facilities themselves. In my view, the right granted in Clause 1(b)...