Sheng Siong v Carilla: Lease Agreement Dispute over Supermarket Use Approval
Sheng Siong Supermarket Pte Ltd sued Carilla Pte Ltd in the High Court of Singapore on 14 September 2011, seeking the return of a security deposit and legal fees after the Housing & Development Board (HDB) rejected plans to use Carilla's property as a supermarket. Sheng Siong argued that the lease agreement was conditional on HDB approval for supermarket use. The court, presided over by Justice Andrew Ang, found in favor of Sheng Siong, holding that the lease was indeed conditional and had been frustrated by the HDB's rejection. Carilla's counterclaim was dismissed.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Sheng Siong sued Carilla for return of deposit after HDB rejected supermarket use. Court found lease conditional on approval, contract frustrated, Sheng Siong won.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Sheng Siong Supermarket Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | Willie Yeo, Lim Chee San |
| Carilla Pte Ltd | Defendant | Corporation | Counterclaim Dismissed | Lost | Marina Chin |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Willie Yeo | Yeo Marini & Partners |
| Lim Chee San | Yeo Marini & Partners |
| Marina Chin | Tan Kok Quan Partnership |
4. Facts
- Sheng Siong entered into a lease agreement with Carilla to rent premises for a supermarket.
- The lease agreement included plans depicting a supermarket layout.
- Sheng Siong informed Carilla that the lease was conditional on HDB approval for supermarket use.
- HDB rejected Carilla's plans to use the premises as a supermarket.
- Carilla insisted that Sheng Siong comply with HDB requirements or face financial penalties.
- Sheng Siong sought the return of the security deposit and legal fees paid to Carilla.
5. Formal Citations
- Sheng Siong Supermarket Pte Ltd v Carilla Pte Ltd, Suit No 272 of 2010, [2011] SGHC 204
6. Timeline
| Date | Event |
|---|---|
| Carilla purchased property from Eng Wah Theatres Organization Pte Ltd | |
| Parties met to discuss renting the Premises | |
| Main Term Sheet drafted by Carilla | |
| Main Term Sheet signed by Carilla and Sheng Siong | |
| Tenancy Agreement executed | |
| Carilla submitted plans to HDB | |
| HDB rejected proposed plans | |
| Carilla informed Sheng Siong of HDB’s rejection | |
| Carilla sent the executed Tenancy Agreement for stamping | |
| HDB replied with another rejection | |
| Carilla informed Sheng Siong to adjust its operation at the Premises | |
| Lim sent a letter to Michael Leow agreeing to a change of name to “Retail” | |
| Sheng Siong began legal proceedings | |
| Judgment reserved |
7. Legal Issues
- Frustration of Contract
- Outcome: The court held that the lease agreement was frustrated due to the HDB's rejection of the proposed use of the premises as a supermarket.
- Category: Substantive
- Sub-Issues:
- Impossibility of performance
- Radical difference in performance
- Contractual Interpretation
- Outcome: The court interpreted the lease agreement, considering the factual context and the parties' objective intentions, and found that the lease was conditional on the premises being permitted to be used as a supermarket.
- Category: Substantive
- Sub-Issues:
- Admissibility of extrinsic evidence
- Objective intention of parties
- Contextual approach to interpretation
8. Remedies Sought
- Return of security deposit
- Reimbursement of legal fees
- Reimbursement of stamp duty
- Interest
- Damages
9. Cause of Actions
- Breach of Contract
- Frustration of Contract
10. Practice Areas
- Commercial Litigation
- Real Estate Law
11. Industries
- Retail
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 1029 | Singapore | Cited for the principle that extrinsic evidence is admissible to aid contractual interpretation by demonstrating the context of the contract. |
| Investors Compensation Scheme Ltd v West Bromwich Building Society | N/A | Yes | [1998] 1 WLR 896 | England and Wales | Cited for the principles of contractual interpretation, including the consideration of background knowledge reasonably available to the parties. |
| Lee Chee Wei v Tan Hor Peow Victor | Court of Appeal | Yes | [2007] 3 SLR(R) 537 | Singapore | Cited for the principle that entire agreement clauses do not prevent a court from adopting a contextual approach in contractual interpretation. |
| Sandar Aung v Parkway Hospitals Singapore Pte Ltd | N/A | Yes | [2007] 2 SLR(R) 891 | Singapore | Cited for the principle of 'reading down' contractual terms based on extrinsic evidence to determine the scope of the agreement. |
| Chartbrook Ltd v Persimmon Homes Ltd | House of Lords | Yes | [2009] 1 AC 1101 | England and Wales | Cited for the principle that the court's ultimate task in contractual interpretation is to ascertain the objective intentions of the parties. |
| Davis Contractors Ltd v Fareham Urban District Council | House of Lords | Yes | [1956] AC 696 | England and Wales | Cited for the definition of frustration in contract law. |
| RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 413 | Singapore | Cited for the approval of the definition of frustration in contract law. |
| National Carriers Ltd v Panalpina (Northern Ltd | House of Lords | Yes | [1981] AC 675 | England and Wales | Cited for the principle that a lease can be frustrated, although such cases are rare. |
| Doherty v Monroe Eckstein Brewing Co | N/A | Yes | (1921) 191 NYS 59 | United States | Cited as an example of American courts finding leases frustrated when provisions prohibit the specified use. |
| Industrial Development and Land Co v Goldschmidt | N/A | Yes | 206 P 134 (1922) | United States | Cited as an example of American courts finding leases frustrated when provisions prohibit the specified use. |
| United Dominions Trust Ltd v Western B S Romanay | N/A | Yes | [1976] QB 513 | England and Wales | Cited for the principle that a party failing to read a document properly is not eligible to invoke non est factum. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
| Frustrated Contracts Act (Cap 115, 1985 Rev Ed) | Singapore |
| Legal Profession Act (Cap 161, 2009 Rev Ed) | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Lease agreement
- Supermarket
- Housing & Development Board (HDB)
- Frustration
- Condition precedent
- Main Term Sheet
- Tenancy Agreement
- Plans
- Retail
- Security deposit
15.2 Keywords
- Lease
- Supermarket
- HDB
- Frustration
- Contract
- Singapore
16. Subjects
- Contract Law
- Real Estate
- Leases
- Frustration of Contract
17. Areas of Law
- Contract Law
- Frustration of Contract
- Lease Agreement
- Contractual Interpretation