Ong Sze Poh and others v RB Concern Pte Ltd (formerly known as Rupini's Beauty Consultant Pte Ltd) and another

• Jurisdiction: Singapore
• Judge: Kow Keng Siong
• Judgment Date: 27 October 2023
• Neutral Citation: [2023] SGDC 253
• Court: District Court (Singapore)
• Docket Number: DC/OC 432 of 2023
• Hearing Date: 13 October 2023,27 October 2023
• Citation: [2023] SGDC 253
• Year: 2023
• Plaintiff Counsel: Chu Hua Yi & Lee Yibin, Leonard (FC Legal Asia LLC)
• Defendant Counsel: Bernard Sahagar s/o Tanggavelu (Lee Bon Leong & Co)
• Subject Matter: Civil Procedure,Summary judgement,Whether landlord should be granted summary judgement for rental arrears where part of the arrears is disputed,Whether a letter of undertaking signed by a shareholder and director of a company is enforceable against her for rental arrears owed by the company
• Published date: 04 November 2023

District Judge Kow Keng Siong: Introduction Background

This judgement is to explain my decision in an appeal concerning an application for summary judgement.

This application was filed by the Claimants (landlords) in a claim against the 1st Defendant (tenant) and the 2nd Defendant (controlling shareholder and director of the 1st Defendant) for rental arrears: DC/SUM 1294/2023 (“Application”).

Claimants’ case Against 1st Defendant

The Claimants’ case against the 1st Defendant is based on various documents which contain clear and unequivocal admissions by the latter that there were rental arrears.¹ According to the Claimants, these arrears totalled $164,300. The Statement of Claim provides the following breakdown of the arrears:

	Description	Amount
(a)	Admitted debt under rental statement provided by the Defendants (as of 25 August 2022)	$141,600
(b)	Excess deductions by the 1st Defendant of two months’ of Covid-19 rental relief (“Covid-19 Claim”)	Add $17,600
(c)	Rental for September and October 2022	Add $17,600
(d)	Total payments received on 31 August, 10 September, and 16 September 2022	Less $10,000
(e)	Adjustment for last week of October 2022	Less $2,500
	Total	$164,300

Against 2nd Defendant

According to the Claimants, the 2nd Defendant is personally liable for the above rental arrears as well. This claim is based on a "Letter of Undertaking" (dated 25 August 2022) (“LOU”) signed by the 2nd Defendant. It is not disputed that she had attached this LOU in two statements accounting for the rental arrears (“Rental Statements”) – one in August 2022 and the other in September 2022.²

Defendants’ case

The 1st Defendant admitted that it owed the Claimants rental arrears. Nonetheless, it resisted the claim and Application on the following two grounds. First, there were discrepancies in the Claimants’ computation of the rental arrears. Second, and in any event, the Claimants were precluded from recovering these arrears because they had agreed to give the 1st Defendant 36 months to settle the arrears. According to the 2nd Defendant, she reflected this agreement in notations at the end of the August and September Rental Statements (“Notations”).³ These notations did not contain a “default” or “acceleration” clause which allowed the Claimants to demand full payment of the arrears before the 36 months is up.⁴

As for the 2nd Defendant, she denied being personally liable for the rental arrears. According to her, the LOU at the end of the September Rental Statement had been attached by mistake.⁵

DR’s Orders

The Application went before a Deputy Registrar (“DR”). After hearing parties, the DR found that – The Claimants were not precluded from recovering the rental arrears from the 1st Defendant, The 2nd Defendant was also personally liable for these arrears pursuant to her LOU, The Claimants had sufficiently proved their claim regarding the rental arrears up to September 2022, and There were triable issues regarding the Covid-19 Claim and the October 2022 rental.

The DR made the following orders (“DR’s Orders”):

That –

1 The Defendants are entitled to conditional permission to defend the following items: (1) Admitted amount under the August 2022 Statement – $141,600 (2) Rental for September: $8,800 2 The condition is that the Defendants must furnish security in the sum of $135,400 (to account for sums received by the Claimants from August to October 2022) in the form of a banker’s guarantee, on terms acceptable to the Claimants, by 8 September 2023, failing which the Claimants shall be entitled to enter judgement against the Defendants for the sum of $135,400 and costs and disbursements to be fixed if not agreed, without further order or attendance. 3 The Defendants have unconditional permission to defend the following claims by the Claimants: (a) adjustments to account for over deductions of 2 months’ Covid-19 rental relief, and (b) rental for October 2022 (including any issues of pro-rating), and 4 Costs of the application are reserved.

[emphasis added]

Cross appeals

The DR’s Orders triggered cross appeals by the parties. In essence – The Claimants submitted that summary judgement should have been entered for their entire claim because the DR had found the Defendants’ defence to be “dubious” (RA 53/2023). The Defendants submitted that unconditional permission to defend should have been granted for the rental arrears up to September 2022 (RA 54/2023).

Applicable principles for summary judgement

The approach to dealing with an application for summary judgement is as follows. A claimant must first show that he has a prima facie case for his claim. If he fails to do so, the summary judgment application will be dismissed. If the claimant can establish a prima facie case, then the burden shifts to the defendant who must establish that there is a fair or reasonable probability that he has a real or bona fide defence. If there is conflicting evidence from the parties – It is generally not appropriate for a judge to attempt to resolve such conflicts on affidavit. The above however is not an unqualified position. Given that a defendant must show that there is a fair or reasonable probability that he has a real or bona fide defence, he will be found to have failed to meet this burden (and a judge is thus entitled to find that there is no triable issue) if his defence – is a mere assertion, is equivocal, lacks precision, is inconsistent with undisputed contemporary documents or other statements by the defendant, or is inherently improbable, See e.g., KLW Holdings Ltd v Straitsworld Advisory Ltd and another [2017] 5 SLR 184 at [16]. A claimant will be granted summary judgment if a defendant has no defence to a claim or a particular part of his claim. However, if the defendant can establish that there is a fair or reasonable probability that he a real or bona fide defence, then he will be granted unconditional permission to defend the claim – unless his defence is of a dubious nature, in which case he will be granted conditional permission to defend.

Key issues for determination

Applying the above approach to the present case, and bearing in mind that the 1st Defendant had admitted to owing the Claimants rental arrears, the key issues arising from the cross appeals are as follows: First, have the Claimants shown a prima facie case that the 1st Defendant owe the amount of rental arrears claimed in the Statement of Claim, or part of this claim? (“Quantum Issue”) This issue turns on how much of the claimed arrears can be proved with certainty. Second, are the Claimants precluded from recovering the arrears from the 1st Defendant because the Notations did not contain a default clause? (“Default Clause Issue”) Finally, if the Claimants are not precluded from recovering the arrears, then have they also shown a prima facie case that the 2nd Defendant is personally liable for these arrears as well? (“Personal Liability Issue”) This issue turns on whether she had mistakenly attached the LOU at the end of the September Rental Statement.

Findings on the key issues

After considering the evidence as well as the submissions, I made the following findings: Quantum Issue. The Claimants were able to establish a prima facie case that the 1st Defendant owed them rental arrears up to 21 October 2022. These arrears came to $144,200. As for the Covid-19 Claim (see [3(b)] above), there were triable issues. Default Clause Issue. The 1st Defendant had failed to show that there is a fair or reasonable probability that it has a real or bona fide defence to the rental arrears of $144,200. Specifically, the absence of a default clause in the Notations did not preclude the Claimants from recovering these arrears. Personal Liability Issue. The Claimants were able to establish a prima facie case that the 2nd Defendant was personally liable for $144,200 of rental arrears. The latter had failed to show that there is a fair or reasonable probability that she has a real or bona fide defence to this aspect of the Claimants’ claim. The LOU at the end of the September Rental Statement was not attached by mistake.

Before explaining the reasons for my findings, I will first set out the facts for context.

Undisputed facts The tenancy

Between 2014 and 2016, the Claimants and the 1st Defendant had a three-year written tenancy agreement in relation to a shop unit (“the Premises”). When this tenancy expired, the 1st Defendant continued to occupy the Premises under a monthly tenancy with rent of $8,800 being payable on the first day of each month. It was agreed that the provisions of the written tenancy agreement would continue to apply. Under Clause 4.1 of the agreement, the Claimants were entitled to re-enter the Premises if rent or service charge was not paid for seven days after its due date, whether formally demanded or not.

Rental arrears

From around June 2017 onwards, the 1st Defendant fell into rental arrears. Based on the Defendants’ own calculations, these arrears came to $141,600 as of 25 August 2022.⁶ Sometime in August 2022, the Claimants informed the 1st Defendant of their intention to re-enter the Premises and terminate the tenancy unless the rental arrears were settled.

August Repayment Contract

The 2nd Defendant pleaded with the Claimants to reconsider their position. The Claimants eventually agreed to a payment plan for the rental arrears.

On 25 August 2022, the following events took place. The 2nd Defendant provided the Claimants with a Rental Statement. In this statement, it was admitted that the total rental arrears owed by the 1st Defendant came to $141,600 as of 25 August 2022. (“August Rental Statement”) The Claimants and the...