Panpac Education Pte Ltd v Applied Movers & Trading Pte Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 20 March 2014
• Neutral Citation: [2014] SGHC 50
• Court: High Court (Singapore)
• Docket Number: Suit No 448 of 2013 (Registrar’s Appeal No 350 of 2013)
• Year: 2014
• Published date: 24 April 2014
• Hearing Date: 19 November 2013,13 October 2013
• Plaintiff Counsel: Roger Foo and Melissa Leong (Genesis Law Corporation)
• Defendant Counsel: K R Manickavasagam (Manicka & Co)
• Subject Matter: Landlord and Tenant,Rent and Service Charges,Obligation to pay for rental and for reimbursement works
• Citation: [2014] SGHC 50

Judith Prakash J: Introduction

The plaintiff, Panpac Education Pte Ltd, was the chief tenant of certain premises leased from the Jurong Town Corporation (“JTC”). It sub-let a portion of the premises under successive sub-leases to Applied Movers & Trading Pte Ltd, the defendant. The last of these sub-leases was to expire on 15 January 2013.

Sometime in July 2012, the plaintiff told the defendant that there would be no further extension of the sub-lease as JTC wanted the premises back. Subsequently, however, the plaintiff agreed to a short extension of the sub-lease up to 15 April 2013. This was at the defendant’s request and with the consent of JTC. In the event, the defendant moved out of the premises on 28 February 2013.

The plaintiff started this action in May 2013. It claimed that the defendant had failed to pay it a total of $324,340.05 due as rent and associated costs under the extended sub-lease. Against this sum, the plaintiff had set off the deposit of $100,000 paid by the defendant leaving an outstanding balance of $224,340.05. Additionally, it asserted that the defendant had failed to pay it the sum of $62,702 that it had expended in reinstating the premises. The plaintiff claimed the two sums of $224,340.05 and $100,000.

The defendant disputed both claims. As regards the rental, it alleged that rent was due only while it occupied the premises. As it had vacated the premises on 28 February 2013 it was not liable to pay rent for March 2013 and 1 April to 15 April 2013 which was the period during which reinstatement of the premises had taken place. It admitted having failed to pay $172,408.43 in rent and associated costs due up to 28 February 2013 and averred that once the deposit and another small sum the defendant had paid were taken into account, the amount owing was only $72,186.05. The defendant also alleged that it was not liable for the cost of the reinstatement works: the plaintiff had not proven that these costs had arisen from the defendant’s occupation of the premises. The defendant put in a counter-claim for $97,500 being the amount it had to pay in removal costs when it vacated the premises early at the plaintiff’s demand.

The plaintiff applied for summary judgement and also to strike out the defendant’s counterclaim. Both applications were heard by the same Assistant Registrar (the “AR”). The AR decided that the defendant’s counterclaim disclosed no reasonable cause of action and struck it out. As for the summary judgment application, she made two orders: In respect of the sum of $72,186.05 that the defendant admitted was due, judgement was entered for the plaintiff for the amount with interest as provided in the sub-lease and costs; and In respect of the balance amount of $214,856, the defendant was granted leave to defend the same on condition that it furnished the plaintiff security for the full amount in the form of a banker’s guarantee within 14 days of the court’s order, failing which judgement would be entered for the plaintiff for that amount, interest and costs.

Shortly thereafter, the defendant filed an appeal against the AR’s decision in respect of the sum of $214,856. It wanted unconditional leave to defend this claim. I heard the defendant’s appeal and had to consider the same issues that were argued before the AR: whether the defendant was liable to pay rent for the period after it vacated the premises and secondly whether it was liable to pay the reinstatement costs. After hearing the parties, I gave the defendant unconditional leave to defend the claim for reinstatement costs but upheld the AR’s order of conditional leave for the balance of rent unpaid (this amounted to $152,154). The defendant has appealed against this part of my decision.

First Issue: Was the defendant liable to pay rental up to 15 April 2013?

To resist summary judgement, the defendant had to show a triable issue. It argued that there was such an issue because the plaintiff had not clearly indicated that it would charge rental during the re-instatement process. The contract between the parties and the correspondence did not provide for rental to be paid during that period. In this respect, the defendant referred to various documents. First, there was the sub-lease made on 7 October 2011 which covered the tenancy period from 15 January 2012 to 14 January 2013. The sub-lease did not contain any clause that stated that the defendant would have to vacate the premises before 14 January 2014 to allow for re-instatement of the same. Secondly, the parties had signed a letter agreement on 26 December 2012 in relation to the extension of the lease (“extension letter”) and this too was silent on any obligation on the defendant’s part to pay rent during the re-instatement period.

The defendant pointed out that the only obligation in the extension letter in relation to re-instatement was clause 6 which stated:

Reinstatement period The tenant agrees to abide strictly to the official handover date to JTC. In this instance, the tenant may be required to vacate 1 month (depending on the need of contractor) before the expiry of this tenancy.

The defendant contended that clause 6 meant that even though the tenant had taken a three month extension of the tenancy, it could be asked to leave a month earlier depending on what the contractor needed. In that event, the defendant would not have to...