Koh Kia Yeong and another v Ang Sofeene

Leases are unique creatures in that they possess both the qualities of a contract, and that of a demise in land, each with their own set of legal rules and principles. This action concerns the application of the contractual principle of repudiation to leases. How does it apply and to what extent (if at all) would the exercise of contractual rights be circumscribed by legal or equitable principles relating to land?

The Defendant, Ms Ang Sofeene (the “Landlord”), is the owner of 100 Jalan Sultan #01-18 Sultan Plaza, Singapore 199001 (the “Premises”).¹

The Plaintiffs, Mr Koh Kia Yeong and Ms Sun Yanli (each a “Tenant”, collectively the “Tenants”), were partners trading in the name of “Sun Erniang Eatery and Drinks", a food and beverage business (“Sun Erniang”).² They were tenants of the Premises between April to October 2021.

Although there are two Tenants, at all material times the 1st Plaintiff communicated with the Landlord on behalf of both Tenants, since the Landlord was unable to communicate with the 2nd Plaintiff who had limited command of the English language.³

In April 2021, the parties entered into a tenancy agreement (the “TA”) for a lease of the Premises (the “Lease”). The Lease was for a fixed term of three years commencing 1 April 2021 and ending on 31 March 2024, with a monthly rent of $4,800 (the “Rent”).⁴ The Rent is payable in advance on the 1st day of each calendar month.⁵ Pursuant to the TA, the Tenants also paid the Landlord a 3-month security deposit in the sum of $14,400 (the “Security Deposit”).⁶

The relevant terms of the TA are set out in full in Annex A, and summarised below: Under Clause 2(c),⁷ the Landlord has the right to re-enter the Premises and terminate the Lease if: Rent shall be unpaid for seven days; The Tenants fail to perform or comply with any obligation under the TA; or The Tenants go into liquidation. Under Clause 2(i),⁸ the Tenants agreed not to assign or part with the possession of the Premises without the written consent of the Landlord. Under Clause 2(k),⁹ the Tenants agreed to keep the corridor and covered walkway free and unobstructed, failing which the Landlord may clear away any obstruction and the Tenants must pay the Landlord’s costs and expenses in doing so. Under Clause 2(r),¹⁰ the Tenants must comply with all legal and regulatory requirements imposed on the occupier of the Premises. Under Clause 2(y),¹¹ the Tenants must deliver up the Premises in good tenantable conditions at the expiry or termination of the Lease. Under Clause 2(ee),¹² the Tenants are obliged to comply with all terms and conditions stipulated by the Management Corporation Strata Title of Sultan Plaza (the “MCST”) with regard to the use of the corridor area outside the Premises. Under Clause 2(hh),¹³ the Tenants must comply with “such requirements as may be imposed upon the occupier by any statute” and any regulation or order issued pursuant to such statute. Under Clause 4(b),¹⁴ the Landlord has the right to re-enter the Premises and terminate the Lease if: Rent shall be unpaid for more than seven days; The Tenants breached any covenants in the TA; The Tenants entered into any composition with its creditors or suffered any distress or execution; or The Tenants go into liquidation.

I shall refer to the various provisions of the TA in this judgment as follows:

Between April to July 2021, the Tenants were relatively prompt in their Rent payment, save for some delay in June 2021. Things however went south quickly in the next few months.

In August 2021, the 1st Plaintiff informed the Landlord that the Tenants were “inviting in an investor with a [sic] old ongoing food business” because the Tenants “really cannot go on alone” and that the 2nd Plaintiff may have to return to China to care for her father.¹⁵ The 1st Plaintiff asked for the Landlord’s “ongoing support”.¹⁶ The Landlord did not reply to this message, since no particular response was sought or required. The Rent for September 2021 was paid to the Landlord without much funfair.¹⁷

On 27 September 2021, a few days before the October Rent became due, the 1st Plaintiff informed the Landlord that he was “no longer a shareholder or director in Sun Erniang” and that the Landlord should look to one Ms Jasmine Tan (“Jasmine”), who is allegedly a “partner” in Sun Er Niang, for the Rent.¹⁸ The Landlord squarely rejected the suggestion and reminded the 1st Plaintiff that the TA is between the Landlord and the Tenants in their personal capacities, and Jasmine’s involvement in the business of Sun Erniang is irrelevant.¹⁹

Notwithstanding the Landlord’s protest, Jasmine was added to a WhatsApp group chat between the 1st Plaintiff and the Landlord (the “WA Group Chat”), and the 1st Plaintiff continued to refer the Landlord to Jasmine on matters relating to the Premises. I will elaborate on these at [78] to [92] below.

Because the Defendant’s pleaded case is that the WhatsApp message from the 1st Plaintiff on 27 September 2021 (the “Message”) “evinced an intention to no longer be bound by the [TA],²⁰ I set out the exchange in full below:²¹

1st Plaintiff: As have informed you last month, I am no longer a shareholder or director in Sun Erniang eatery and drinks. Ms Sun and her new partner Ms Jasmine Tan. Ms Sun in [sic] now in China caring to her father. Please contact Jasmine Tan…for the rental. If it is allright [sic] with you, I will pass your mobile number to her. I’m leaving for China also.

Defendant: Chris, my contract is with you and Sun Yanli signed on 16 April 2021. I will not be dealing with Ms Jasmine Tan as she is not a party to our contract. Please put in place a standing instruction for your bank to credit the monthly rental to my UOB account…before you leave. Thank you.

1st Plaintiff: I really cannot carry on the business as I have already spent more than a hundred thousand and I am leaving for China next month. Jasmine is an experienced operator and she should be able to make the business work. I will assist to coordinate with Jasmine for her to make the rental from Sun Erniang Eatery as she is now a partner and she sign the cheque. I am no longer a shareholder and partner in the business….

Defendant: When there is a lapse in monthly rental, I will follow the spirit of the contract to claim from you and Sun Yanli. Although you may have discharged yourself from the ownership of the eatery, you are still not discharge [sic] from our tenancy agreement which is a legally binding contract. As at now, I will only recognise Jasmine as an occupier of the shop….

(emphasis added)

I should add that although the 1st Plaintiff had variously referred to Jasmine as an “investor” or a new “partner” in Sun Erniang²² and to the fact that he (i.e. the 1st Plaintiff) had ceased to be “a shareholder or director in Sun Erniang”,²³ these are all misnomers, as the 1st Plaintiff accepts that at the material time in late 2021, Sun Erniang was a partnership and the two Plaintiffs were the only partners.²⁴

At around the same time between mid-September and mid-October 2021, the following issues also arose in relation to the Premises: The Kitchen Exhaust Duct Issue: On 14 September 2021, the Singapore Civil Defence Force (the “SCDF”) inspected the Premises and found that the kitchen exhaust duct in the Premises was installed without approval. Accordingly, the SCDF required the operator of the Premises to either remove the unauthorised fire safety works or to appoint a qualified person (such as a professional engineer, architect, etc) to assess the feasibility of the works and obtain a “SCDR Notice Approval” and a “Fire Safety Certificate”, by 21 October 2021.²⁵ It is not disputed that the kitchen exhaust system was installed by a previous tenant of the Premises and pre-existing at the Premises when parties entered into the TA.²⁶ The Common Area Issue: Between September to early October 2021, the MCST sent various circulars to subsidiary proprietors (including the Landlord) and operators of food and beverage outlets at Sultan Plaza, requiring them to remove tables, chairs and other encroachments from the common property of Sultan Plaza.²⁷ This included tables and chairs which the Plaintiffs placed outside the Premises for their eatery business, as well as retractable awnings installed outside the unit.²⁸ On 14 October 2021, the MCST’s lawyer issued a final warning letter to the Landlord requiring all chairs and tables at the common area be removed by 2359hrs on 19 October 2021, failing which the MCST will “proceed with action against [the Landlord] as it deems fit without further reference”.²⁹

As a result of the temporal convergence of the various issues, and in particular the deadlines set by the SCDF and MCST (see [14(a)] and [14(b)] above), the 1st Plaintiff, the Landlord and Jasmine were in regular communication (by way of, amongst others, exchange of messages in the WA Group Chat) in the period between 27 September 2021 and around 15 October 2021, on: the outstanding Rent for October 2021; the Kitchen Exhaust Duct Issue; and the Common Area Issue.

In the period between late-September to mid-October 2021, the Landlord sent various messages, emails and letters to the 1st Plaintiff to follow up on the Rent payment for October 2021.

Initially, the 1st Plaintiff indicated that the Landlord should look to Jasmine for payment.³⁰ When the Landlord rejected this suggestion and pointed out the TA is with the Plaintiffs,³¹ the 1st Plaintiff...