Teo Teo Lee v Ong Swee Lan and Others

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 16 August 2002
• Neutral Citation: [2002] SGHC 183
• Docket Number: Suit No 1481 of 2001
• Date: 16 August 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: Victor Leong and Joan Lim (Chan Kam Foo & Associates)
• Citation: [2002] SGHC 183
• Defendant Counsel: KK Yap and Julie Tok (KK Yap & Partners)
• Court: High Court (Singapore)
• Subject Matter: Plaintiff lessee proposing amendments to agreement,Formation,Memorandum providing for signing of tenancy agreement stipulated time of completion,Whether time of the essence,Whether all necessary provisions present and certain,Defendants regarding this as repudiation,Interpretation of phrase,Whether valid and binding agreement between parties,Contractual terms,Certainty of terms,Plaintiff seeking specific performance of agreement,When to consider time as being of the essence,'Subject to the tenancy agreement',Delay in completion,Memorandum providing for signing of tenancy agreement within stipulated time,Memorandum containing phrase 'subject to the tenancy agreement',Agreements for leases,Contract,Words and Phrases,Landlord and Tenant,Delay in preparation and signing of agreement exists,Tenancy agreement

Judgment

GROUNDS OF DECISION

Background facts and evidence

1 The plaintiff has been in the business of baking and selling cakes and pastries for many years. He has been operating a dozen cake and pastry shops, all of them at Housing and Development and Board (HDB) shop units. He wanted to secure yet another HDB outlet for his business, either on rental or for outright purchase, especially in the vicinity of the Toa Payoh Mass Rapid Transport Station. He soon came to learn that a shop unit would be available in that area. The defendants were then in the process of becoming the unit’s owners.

2 All the eight defendants are siblings. They were once lessees of a shop unit at Block 79 Toa Payoh Central, #01-47, a property that was subsequently acquired by the HDB. They were then given a right to purchase a replacement shop unit which was being developed in that area and to choose one of the four shop units available at Block 520, Lorong 6, Toa Payoh.

3 A real estate agent, by the name Ms Fiona Lim Tai Ni (‘Fiona Lim’), brought them together and negotiations between them ensued in earnest. Prior to the selection of the shop unit at Block 520, Lorong 6, Toa Payoh, the plaintiff and the defendants agreed and settled the terms of the lease in regard to any one of the four potential shop units ie, Unit(A) #01-60, Unit (B) #01-58, Unit (C) #01-61 or Unit (D) #01-64. The defendants were fourth in the queue for the selection of the above-mentioned shop units. As it happened, they were eventually successful in securing Unit (A) #01-60.

4 On 10 October 2001, after discussions, the plaintiff signed and delivered to the defendants a memorandum intituled "Offer to Lease", together with a sum of S$10,000 being the deposit sum as stipulated in the document. The said memorandum was admittedly prepared by Fiona Lim, who was then representing the defendants in this transaction. On 10 October 2001 itself, the defendants accepted the offer and the terms and conditions spelt out in the said memorandum. They also acknowledged receipt of the deposit paid and all this was done in the presence of the agent.

5 The memorandum around which the whole dispute revolved was a concise document. Insofar as is material, it reads as follows:

Jet Realty Network
Offer To Lease

From: The Tenant
Teo Teo Lee

Block 513 #01-506
Bishan Street 13
Singapore 570513

To: The Landlord
Ong Chin Hong, Ong Chin Kiong,
Ong Chin Nam, Ong Swee Leng

Block 79 #01-47
Toa Payoh Central
Singapore

Dear Sir/Mdm

Re: Block 520 Lorong 6 Toa Payoh Unit (A) #01-60 or Unit (B) #01-58 or Unit (C) #01-61 Singapore or Unit (D) #01-64 (hereinafter called the ‘Property’)

Subject to the Tenancy Agreement, I/we enclosed a sum of S$10,000/- in cash being non-refundable booking deposit to lease the ‘Property’ at the following terms and conditions:

1. Monthly rent: Unit (A) S$15,500 or Unit (B) S$25,000 or Unit (C) S$16,000 inclusive of maintenance and service charges or unit (D) $25,000.

2. Security deposit: Three months’ rental deposit payable upon signing of the Tenancy Agreement.

3. Lease period: Three (3) years with option to renew for a further period of three years.

4. Lease commencement: Upon expiration of the fitting-out period (to be confirmed).

5. Stamp fees: To be borne by the Tenant.

6. Fitting-out period: 4 weeks rent free for fitting-out upon keys being handed over by HDB or Landlord approx 1^st Qtr of 2002.

7. Other Terms & Conditions:

(a) Tenant to accompany Landlord on shop selection day and to be given the choice of leasing either one of the above-mentioned units (A), (B) or (C) or (D).

(b) Tenancy Agreement to be executed within two weeks after shop had been selected.

(c) PUB charges to be borne by the Tenant.

(d) Rental for the next 3 years to be capped at a maximum increment of up to 10%.

In the event *I/we, the Tenant withdraws my/our interest to proceed with the lease of the said ‘Property’, the Landlord shall be entitled to forfeit the booking deposit and neither party shall have any claims against the other.

Should you agree to the above offer, the booking deposit shall formed part of the Security deposit payable for the lease and the Landlord will be bind by this offer by signing the ‘Acceptance Copy’ below.

Dated this 10^th day of October 2001.

(signed) (signed)

________________ __________________

Signed by the Tenant In the presence of

Fiona Lim 1403376I

______________________________________________

Acceptance Copy

We, the undersigned owners of the ‘Property’ hereby confirm and accept the offer and the above terms and conditions. We hereby acknowledge receipt of the booking deposit.

Dated this 10^th day of October 2001.

(signed) (signed)

__________________ ________________________

Signed by the Landlord In the presence of Fiona Lim

6 On 31 October 2001, the parties and Fiona Lim were at the HDB Centre at Bukit Merah for the selection of the shop unit and, in the event, unit #01-60 was selected. One would have expected everything to proceed smoothly thereafter. But it was not to be. The defendants started dragging their feet. It was alleged by the plaintiff and Fiona Lim that the defendants did not appear to be in any hurry to get on with the execution of a formal tenancy agreement, as envisaged in the memorandum signed between the parties. Fiona Lim’s offer to make use of her firm’s standard tenancy agreement was also not taken up by the defendants. According to both of them, the defendants wanted the plaintiff to increase the monthly rental to $22,500, an increase of $7,000 per month. Apparently, parties met twice between 6 November and 9 November 2001 but the outcome was not fruitful.

7 The story narrated by the defendants as to the developments since the signing and the selection of the shop unit was different. There was no mention of any demand for an increase in rental in their accounts. The material segments in the affidavit of evidence in chief of Ong Chin Hong, the second defendant (similar in content, substance and wording to that of Ong Swee Kheng, the fifth defendant) are as follows.:

7. I informed Ms Fiona Lim that the Defendants were only interested in leasing the said replacement shop.

8. On or about 10 October 2001, Ms Fiona Lim arranged a meeting for me to meet the Plaintiff. The 5^th Defendant was present with me at the said meeting. At the said meeting we did discuss about the letting of the said replacement shop.

9. Later that night, that is, on or about 10 October 2001, the 4^th, 6^th, 8^th Defendants and I met the Plaintiff and the Offer To Lease was signed (hereinafter referred to as "the Offer To Lease"). It was the intention of the Plaintiff and the Defendants that the Offer To Lease was to be subject to a formal Tenancy Agreement being entered into, for purposes of the rental of the said replacement shop. At the time the Offer To Lease was executed, the said replacement shop has yet to be selected. Accordingly, the exact monthly rental, the lease commencement period, fitting out period and even the handing over of the keys were not determined at the material time, although four (4) different units with four (4) different monthly rentals were stated in the Offer To Lease. A copy of the Offer To Lease is annexed hereto and marked "OCH-1".

10. The rental amount for the respective units were agreed upon based on the advice given by Ms Fiona Lim who had assured me that the same were the best in the market at that point in time.

11. The said replacement shop at unit #01-60 was eventually selected on or about 31 October 2001 (hereinafter referred to as "the Shop Unit") and the rental for the same was S$15,500.00 as stated in the Offer To Lease.

12. The understanding between the Defendants and the Plaintiff had always been that the Plaintiff would rent the Shop Unit to operate the same as a cake shop. The Plaintiff had also assured the Defendants that the said cake shop would only be used as a retail outlet only and that he does not require manufacturing, baking or cooking in the Shop Unit.

13. In the course of the discussion, the Plaintiff had pointed out that he has more than forty (40) other cake shops of which some of them he uses to manufacture, bake or cook whatever that is necessary to run his cake shop businesses.

14. As the Shop Unit was selected sometime on or about 31 October 2001, Clause 7(b) of the Offer To Lease required a Tenancy Agreement to be executed within two (2) weeks therefrom, that is, on or before 14 November 2001.

15. The Offer To Lease was drafted by Ms Fiona Lim and the Defendants and I as laymen, had expected Ms Fiona Lim to likewise prepare the Tenancy Agreement for parties’ execution.

16. However, not only was there any Tenancy Agreement forthcoming from Ms Fiona Lim, Ms Fiona Lim had failed, refused and/or neglected to call either the Defendants or I nor remind us about the execution of a tenancy agreement pursuant to the Offer to Lease. Knowing that a tenancy agreement has to be executed by 14 November 2001, the Defendants frantically sought legal advice and finally appointed M/s K. K. Yap & Partners on the 13 November 2001 to draft the Tenancy Agreement (hereinafter referred to as the "Tenancy Agreement"). M/s K.K. Yap & Partners upon our instructions drafted the Tenancy Agreement and forward the same to the Plaintiff on the same day.

17. The Tenancy Agreement essentially contained all terms, which have been set out in the Offer To Lease including all the other covenants usually found in the Tenancy Agreement. Whilst some of the terms may not ordinarily be found in other Tenancy Agreement, the same have been included in the Tenancy Agreement by reason of the fact the Plaintiff would be running a cake shop in the Shop Unit. A copy of the Tenancy Agreement is annexed hereto and marked "OCH-2".

18. Although the Tenancy Agreement was drawn up on time in accordance with the terms of the Offer To Lease, the Plaintiff had failed,...