Maresse Collections Inc v Trademart Singapore Pte Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 11 May 1999
• Neutral Citation: [1999] SGHC 123
• Court: High Court (Singapore)
• Year: 1999
• Published date: 06 March 2013
• Plaintiff Counsel: Lim Kim Hong (Mas & Partners)
• Defendant Counsel: Roy Yeo (Lee & Lee)
• Citation: [1999] SGHC 123

Judgment:

Cur Adv Vult

1. The plaintiff company carries on business as a wholesaler of fashion handbags, accessories and dresses, mainly in Los Angeles, California. It is incorporated in one of the states of the United States of America but its main shareholder is a lady of Filipino extraction, one Ms Remie Catabas Encinas. The defendants are a company incorporated in Singapore and they are the owners and developers of a commercial building at 60 Martin Road, Singapore which they have named ‘TradeMart Singapore’ (‘the building’). This action relates to the proposed rental by the plaintiffs of one of the showrooms in the building.

Background

2. In early 1993, the defendants’ representatives visited the complex called CaliforniaMart, in which the plaintiffs then had three showrooms, for the purposes of promoting the building as a fashion centre. This sparked the plaintiffs’ interest and in May 1993, Ms Encinas wrote a letter to the defendants indicating that the plaintiffs were considering doing business in Singapore and renting premises in the building. Two months later, Ms Encinas came to Singapore and met and negotiated with the defendants for the lease of a unit in the building to be used as a showroom for her fashion handbags. The building was then in the final stages of construction.

3. This action arises out of the document which the plaintiffs and the defendants signed on 19 July 1993. It was an agreement to lease whereby the defendants undertook to grant to the plaintiffs (and the plaintiffs agreed to take) a lease of the premises identified as 60B, B21 (#04-30), TradeMart Singapore, Martin Road (‘the unit’), which had an area of approximately 969 square feet. The rental was fixed at $3.50 per square foot per month for the period 1 January 1994 to 31 December 1996, making a total rental of $3,391.50 per month. Under the agreement, the plaintiffs had to pay $3,391.50 to the defendants immediately as security for the plaintiffs’ due performance of the contractual terms. It was also agreed that the defendants would, prior to the commencement of the term of the lease, serve written notice on the plaintiffs to execute the lease proper and the plaintiffs would then have 21 days in which to do this. Further, if the defendants were not able to obtain the temporary occupation permit in respect of the unit by 1 January 1994, then the agreement would terminate and the security deposit would have to be repaid by the defendants.

4. On 21 July 1993, the plaintiffs gave the defendants a cheque drawn on their bank, one of the Los Angeles branches of the Bank of America, in payment of the security deposit. This cheque was not honoured when it was first presented for payment but, at the plaintiffs’ request, the defendants represented it and it was paid on the second presentation. Between August and December 1993, various letters passed between the plaintiffs and the defendants relating to the unit. Much of the correspondence dealt with the plans and physical specifications of the unit as the plaintiffs needed information in order to fit it out. The defendants also asked Ms Encinas when she would be in Singapore again in order to finalise the lease. On 1 November 1993, Ms Encinas replied that she would be here in early January 1994.

5. In the meantime, the defendants had obtained the temporary occupation permit for the building in August 1993 and by October 1993, some tenants had started to move into their units. The defendants did not, however, send the plaintiffs the lease for signature as provided for under cl 4 of the agreement. Although on 28 December 1993, they informed the plaintiffs that it was imperative that the latter conclude the lease during Ms Encinas’ proposed visit in January 1994, when Ms Encinas did not arrive that month, no steps were taken to send the documentation to her.

6. Ms Encinas and her assistant Ms Jacqueline Macapagal arrived in Singapore on 6 March 1994. They met various representatives of the defendants between 7 and 11 March and also went to the unit several times. The purpose of the visit was to complete the documentation for the unit and to pay the defendants the sum of $6,783 representing two months’ rental as a further security deposit for the lease. Under the terms of the lease, the plaintiffs were required to pay the equivalent of three months rental as security for their performance of the lease.

7. There is a dispute as to exactly what happened during the March 1994 visit. The main persons who dealt with Ms Encinas on behalf of the defendants were Mr Kay Kok Yong, their marketing manager, and Ms Jessica Lee Sook Lan, a marketing executive. The main affidavit filed on behalf of the defendants was, however, made by Mr Yeo See Kiat, their general manager. In it, he stated that on 10 March 1994, Mr Kay and Ms Lee met with Ms Encinas and Ms Macapagal to finalise negotiations before the execution of the lease. At this meeting, Ms Encinas was told by the defendants’ representatives that she had to incorporate a local company to enter into the lease. It was the defendants’ company policy to enter into leases with local companies. This condition was stressed to Ms Encinas and she agreed to it. She was also told that she had to make payment of the balance of the three months deposit which was required under the lease. Ms Encinas agreed to this as well. During the meeting she requested that the lease commence on 1 May 1994. This was agreed to by the defendants.

8. Mr Yeo went on to state that on 11 March 1994, the defendants’ representatives, Mr Kay and Mr Richard Norfolk, the defendants’ director of marketing, met up with Ms Encinas to collect payment of the balance rental deposit and to sign the lease. At this meeting, their representatives informed Ms Encinas that she had to comply with three requirements before the lease would be granted to her. These were:

(a) that she incorporate a local company within two weeks and advise the defendants of its name and registration number within that period;

(b) that the rental deposit received by the defendants on that day had to be cleared within two weeks from 11 March 1994 failing which the offer of the unit would lapse;

(c) that if the lease was not completed within 11 March 1994, the rental deposit paid would be forfeited and the offer of the unit would lapse.

These requirements were also set out in a letter of the same date which was handed to Ms Encinas by Mr Kay at the meeting.

9. According to Mr Yeo, having been told of these requirements Ms Encinas requested that the cheque for the two months deposit be made payable at a later date and not on 11 March 1994. She specifically requested that the cheque be dated 22 March and this date was then typed on the cheque by one of the defendants’ employees. Ms Encinas proceeded to sign the lease which had been amended to reflect the name of the intended tenant, Maresse Collections Pte Ltd. I should note here that the documents which Ms Encinas signed were produced in court and they purported to be two copies of the lease relating to unit #04-30 on the fourth storey, 60 Martin Road, Singapore between TradeMart Singapore Pte Ltd as landlord and Maresse Collections Pte Ltd as tenant. It was, however, clear from both documents that when originally prepared, the name of the tenant had been typed in as ‘Maresse Collections Inc’ that is the name of the plaintiffs herein and that this name had been amended wherever it appeared by the deletion of the word ‘Inc’ and its replacement by the words ‘Pte Ltd’. The documents are undated and have not been signed by or on behalf of the defendants.

10. The account given by Ms Encinas was somewhat different. She said that she executed the lease in the defendants’ office on 11 March 1994. Then, in order to pay the two months’ security deposit, she gave the defendants a Bank of America cheque-leaf and they typed the details of the payment including the date of the cheque which was 22 March 1994. The cheque was thereafter signed by her and returned to the defendants.

11. Following this event, Ms Encinas was told by the defendants that the plaintiffs would have to register a business in Singapore if they were to commence the lease in May 1994. She was surprised that such important information was only imparted to her at the eleventh hour as she was due to leave Singapore on 12 March 1994. Nevertheless, she made an immediate trip to the Registry of Companies and Businesses and was told that it would take her more than a week to register a company. She was then advised to register a business first which she did the next day under the name and style of Maresse Collections. She then rushed to the defendants’ office to give them full particulars of that business including the registration number. I note here that the documents adduced by the plaintiffs show that on 11 March 1994 Ms Encinas made an application at the Registry of Companies and Businesses for the registration of a business to be called Maresse Collections and that this business was registered on 12 March 1994.

12. Ms Encinas said that she then flew back to Los Angeles via the Philippines and arrived in Los Angeles on 24 March 1994. Upon her return she saw the defendants’ letter dated 11 March 1994 for the first time. This had been sent to the plaintiffs’ office in California by post. To her shock and surprise, the letter contained new terms which the plaintiffs had to meet and failing the same, the lease offer was to lapse. She said that such terms were never discussed nor were the plaintiffs made aware of them at any time when they were negotiating the agreement to lease or the lease itself and as such the terms were unilaterally added by the defendants and should not be binding upon the plaintiffs.

13. What happened next is not disputed. On 26 March 1994, the defendants sent a letter to the plaintiffs informing them that the cheque issued and dated 22 March 1994 had not been cleared...