Manohar K D Nanwani and Seema Manohar Nanwani v Hao Mart Pte. Ltd.

• Jurisdiction: Singapore
• Judge: Laura Lau Chin Yui
• Judgment Date: 11 June 2018
• Neutral Citation: [2018] SGDC 164
• Court: District Court (Singapore)
• Hearing Date: 30 April 2018,26 April 2018,19 April 2018
• Docket Number: District Court Suit No 3372 of 2017, Registrar’s Appeal No 18 of 2018, HC/RAS No. 14 of 2018
• Plaintiff Counsel: Benedict Teo and Shane Sim (Drew & Napier LLC)
• Defendant Counsel: Navinder Singh and Jaspreet Kaur (KSCGP Juris LLP)
• Subject Matter: Summary judgment,Conditional leave to defend
• Published date: 01 September 2018

District Judge Laura Lau Chin Yui:

The 1st and 2nd Plaintiffs (“the Plaintiffs”) filed an application for summary judgment in SUM 4005/2017. On 16 March 2018, the Deputy Registrar granted the Defendants leave to defend the Plaintiffs’ claim on condition that the Defendants furnish security in the sum of $150,346.76 by payment into Court within 3 weeks of the order. The Defendants appealed against the order made by the Deputy Registrar in DC/RA 18 of 2018 (“the Registrar’s Appeal”).

At the hearing before me, the Defendants sought an order for unconditional leave to defend. Having considered the written and oral submissions of counsel for the Plaintiffs and the Defendants, including the Further Submissions tendered by the Defendants after the substantive hearing which necessitated Reply Submissions from the Plaintiffs, I affirmed the decision of the Deputy Registrar. The Defendants have now filed an appeal to the High Court Judge in Chambers.

The Plaintiffs’ pleaded case

The 1st and 2nd Plaintiffs (“the Plaintiffs”) were the landlords and the Defendants were the tenants of the premises at 19 Shelford Road #01-53, Singapore (“the Premises”). By a tenancy agreement dated 10 March 2017 (“the Tenancy Agreement”), the Plaintiffs leased the Premises to the Defendants for a fixed term of 3 years from 1 April 2017 at the monthly rent of $4,200. The Defendants failed to pay the rent for the months of August 2017 and September 2017. Accordingly, the Plaintiffs exercised their rights under clauses 5 and 6 of the Tenancy Agreement to re-enter upon the Premises and terminate the tenancy with immediate effect. By this action, the Plaintiffs claim the sum of $5,740 being outstanding rent from 1 August 2017 to 11 September 2017, interest on the rent arrears at 12% per annum in the sum of $63.56, damages for the remaining term of the tenancy in the sum of $128,660 or alternatively, damages to be assessed and the sum of $15,883.20 being costs for maintenance and repair of air-conditioners and MCST charges.

The Defendants’ pleaded case

The Defendants aver that the Plaintiffs are in repudiatory breach of the Tenancy Agreement. Consequently, the Defendants served on the Plaintiffs a notice to terminate the Tenancy Agreement with immediate effect on 27 July 2017, and are thereby not liable for any rent subsequently accrued or for any costs and expenses subsequently incurred by the Plaintiffs. The Defendants averred that by virtue of clause 1 of the Tenancy Agreement, it was an express or implied term of the tenancy that the Defendants possessed rights over the landings and passage-ways in and around the Premises. The Plaintiffs however, failed to obtain approval from the Management Corporation (“MCST”) for the Defendants’ utilisation of the outside areas of the minimart to store their chillers and freezers. The Defendants pleaded that “in breach of the express and implied terms of the agreement … the Defendants were subsequently informed via an email dated 30 May 2017 from the MCST to refrain from placing its chillers and freezers outside the Premises” (Defence and Counterclaim (Amendment No.1) at [12]). The actions and omission of the Plaintiffs and the MCST and the breach of the implied term made the Premises “materially less fit” for the only purpose contemplated by the tenancy namely, for use as a minimart. Further, the Plaintiffs have derogated from their grant to the Defendants. The Defendants accepted the repudiation of the Tenancy Agreement by letter on 27 July 2017.

The Defendants also premised their case on fraudulent and negligent misrepresentation, and sought to rescind the Tenancy Agreement. The Defendants aver that they were induced to enter into the Tenancy Agreement by the Plaintiffs’ representation that the Defendants could place their chillers and freezers outside of the Premises. The Defendants subsequently discovered that this representation was false and untrue, and the Plaintiffs had no authority or permission from the MCST to allow the outside areas to be utilised for the storage of the Defendants’ chillers and freezers.

Legal principles applicable to granting leave to defend

I accept that the Plaintiffs have established a prima facie case for summary judgment. The Defendants have not denied in their Defence and Counterclaim (Amendment No. 1) (“D&CC”) nor in their show cause affidavit, that the rent for the months of August 2017 and September 2017 remained unpaid. A prima facie case of breach of the Tenancy Agreement has thus been made out and by virtue of clauses 5 and 6, the Plaintiffs were entitled to terminate the Tenancy Agreement, re-enter upon the Premises and recover damages. The burden has thus shifted to the Defendants to establish that “there is a fair or reasonable probability that he has a real or bona fide defence“ Associated Development Pte Ltd v Loong Sie Kiong Gerald [2009] SGHC 165 at [22]).

In Wiseway Global Co Ltd v Qian Feng Group Ltd [2015] SGHC 85, George Wei JC (as he then was) provided useful guidance as to when leave to defend (conditional or unconditional) will be granted:

… a litigant cannot expect to get leave to defend (conditional or unconditional) on the sole basis of bare assertions in its affidavit. While the Defendant may come up with a coherent version of events that is logically possible, a court, even at summary judgment stage, needs more than that. Mere logical possibility is insufficient. There needs to be some evidence, direct or indirect, to support the defendant’s bare assertions of what he claims are the true facts. Where a defendant’s version of facts is entirely unsupported by independent or supporting evidence, inconsistent with the documents before the court, and is in any case commercially implausible, I do not think that a court should hesitate to summarily determine the case in the plaintiff’s favour. (at [33])

My analysis Defence of breach of the Tenancy Agreement

The Defendants contend that by the Plaintiffs’ failure to obtain the relevant approvals from the MCST to allow the Defendants to utilise the outside areas of the minimart to store their chillers and freezers, the Plaintiffs were in breach of the covenant for quiet enjoyment in clause 4.1.3. Further, the Plaintiffs were in breach of the express and/or implied term that the Defendants possessed rights over the landings and passage-ways in and around the Premises, as provided for in clause 1 of the Tenancy Agreement.

In their Further Submissions, the Defendants asserted that the Plaintiffs had not specifically traversed the matters pleaded in the Counterclaim, in particular, that it was an implied term of the Tenancy Agreement that the Defendants’ chillers and freezers could be placed outside the Premises. The Defendants submitted that the Plaintiffs’ bare denials, without more, would entitle the Defendants to defend the action unconditionally, for breach of implied terms. I do not ascribe to this submission. The Defendants pleaded the alleged breach of the implied term in [9], [12] and [13] of their Counterclaim (rather than a specific averment in the Defence) and in their Defence, simply referred to the relevant paragraphs of the Counterclaim by way of traversing the Plaintiffs’ claim. In [6] of the Reply and Defence to Counterclaim (“R&DC”) under the heading “Reply”, the Plaintiffs specifically denied [9] to [13] of the Defence and Counterclaim (“D&CC”). The Plaintiffs supplemented the traversal by pleading as follows in [6(c)] of the R&DC:

Further and in any event, the Demised Premises as defined in Clause 1 read with the Schedule of the Tenancy Agreement refers only to “19 SHELFORD ROAD #01-53, NINETEEN SHELFORD, SINGAPORE 288408”. The Tenancy Agreement does not provide the Defendant with the legal right to occupy the common property outside the Demised Premises. Neither do the Plaintiffs have any obligation under the Tenancy Agreement to obtain an approval from the MCST to permit the Defendant to place its chillers and freezers on the common property outside the Demised Premises.

Under the heading “Defence to Counterclaim” in the R&DC, the Plaintiffs stated that [3] to [8] of the “Reply” are repeated which obviously, includes the reference to the abovementioned [6]. For these reasons, I am satisfied that the Plaintiffs have adequately traversed the Defendants’ pleadings where the D&CC refers to the alleged breach of an implied tem of the Tenancy Agreement, and the Defendants’ contention that the R&DC does not contain a specific traversal of the same is unsustainable.

As to whether the Defendants’ contention of a breach of an express or implied term constitutes a bona fide defence, it will be necessary to examine the scope and ambit of the Plaintiffs’ obligations under the Tenancy Agreement. In consideration for the payment of rent, clause 4.1.3 confers on the Defendants the right to hold and enjoy the “Demised Premises” without interruption from the landlord. Under clause 1 read with the Schedule, the “Demised Premises” refer to “19 Shelford Road #01-53, Nineteen Shelford, Singapore”. From this definition, it is clear that the “Demised Premises” refer to the unit only and do not include the areas outside the minimart which are part of the common property. Nonetheless, the Defendants claim that pursuant to clause 1, it is an express or implied term of the Tenancy Agreement that they possess rights over the landings and passage-ways in and around the Premises. In my view, clause 1 must necessarily be construed to confer upon the Defendants, being the tenants, the right...