MK Distripark v Pedder Warehousing: Breach of Sub-Lease & Failure to Obtain JTC Approval
In a dispute before the High Court of Singapore on 2013-04-22, MK Distripark Pte Ltd (“MKD”) sued Pedder Warehousing & Logistics (S) Pte Ltd (“Pedder”) for breach of a sub-lease agreement. MKD claimed Pedder failed to agree to a novation arrangement. Pedder counterclaimed that MKD failed to seek JTC approval for the continuation of the sub-lease. The court, presided over by Justice Andrew Ang, dismissed MKD’s claim, finding that Pedder was not in breach of the sub-lease. The court allowed Pedder's counterclaim, awarding damages for MKD's failure to use its best endeavors to obtain JTC approval for the continuation of the sub-lease.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Defendant on Main Claim; Judgment for Plaintiff on Counterclaim
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
MK Distripark sued Pedder Warehousing for breach of a sub-lease agreement. The court dismissed the claim and allowed Pedder's counterclaim for damages due to MK Distripark's failure to seek JTC approval.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| MK Distripark Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Pedder Warehousing & Logistics (S) Pte Ltd | Defendant | Corporation | Counterclaim Allowed | Won | Tan Yew Fai of Y F Tan & Co |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| William J M Ricquier | Incisive Law LLC |
| Alvin Ong | Incisive Law LLC |
| Tan Yew Fai | Y F Tan & Co |
4. Facts
- MKD and Pedder entered into a sub-lease agreement for premises owned by JTC.
- The sub-lease was subject to JTC's approval for an extension beyond the initial 12 months.
- MKD proposed a novation arrangement where Pedder would take over the lease from MKD.
- Pedder refused the novation arrangement, claiming the terms were less favorable.
- MKD treated the sub-lease as forfeited due to Pedder's refusal to sign the Novation Agreements.
- MKD did not apply to JTC for an extension of the sub-lease beyond the initial approval period.
- JTC's subletting policy imposed a 50% subletting cap on GFA after a certain date.
5. Formal Citations
- MK Distripark Pte Ltd v Pedder Warehousing & Logistics (S) Pte Ltd, Suit No 844 of 2011, [2013] SGHC 84
6. Timeline
| Date | Event |
|---|---|
| MKD entered into a lease with Mapletree for the Premises. | |
| MKD issued a letter of offer to Pedder for a sub-lease of the Premises. | |
| Pedder countersigned the letter of offer. | |
| MKD sent Pedder a draft Sub-lease. | |
| Tripartite Meeting between JTC, MKD and Mapletree. | |
| MKD furnished a document labelled “Lease of 3A, Jalan Terusan” to Mapletree. | |
| Mapletree suggested that MKD proceed with the Sub-lease for 49 months, subject to review after the expiration of JTC’s consent. | |
| JTC formally gave consent to Mapletree for the sublease. | |
| MKD sent another draft Sub-lease to Pedder which included a new clause, cl 2A. | |
| Pedder agreed to the inclusion of cl 2A. | |
| Meeting between MKD, Mapletree and JTC took place, where the idea of novating the MKD Lease to Pedder was mooted. | |
| Mapletree sent a draft of the Supplemental Deed for novation to MKD. | |
| The Supplemental Deed was forwarded to Pauline. | |
| Counsel for Pedder informed MKD that Pedder was unable to execute the Novation Agreements. | |
| Pauline reiterated Pedder's position that they would not sign the Novation Agreements. | |
| MKD issued a notice to Pedder alleging breach of cl 2A(c) of the Sub-lease. | |
| A final notice to remedy the alleged breach was issued by MKD. | |
| MKD returned the rental sum paid by Pedder for the month of October. | |
| MKD issued a letter of demand for damages. | |
| MKD filed action against Pedder. | |
| The Sub-lease came to an end. | |
| Pedder moved out of the Premises. | |
| Court Transcript date. | |
| Court Transcript date. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Pedder was not in breach of the sub-lease agreement.
- Category: Substantive
- Sub-Issues:
- Failure to comply with sub-lease agreement
- Wrongful forfeiture of sub-lease
- Loss of Chance
- Outcome: The court awarded damages to Pedder for the loss of a chance to continue the sub-lease.
- Category: Substantive
- Sub-Issues:
- Failure to obtain JTC approval
- Damages for loss of opportunity
- Related Cases:
- [1911] 2 KB 786
- (1951) 84 CLR 377
- [1995] 3 SLR(R) 864
- [2005] 1 SLR(R) 661
8. Remedies Sought
- Monetary Damages
- Forfeiture of Sub-lease
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Lease Disputes
11. Industries
- Logistics
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Chwee Kin Keong v Digilandmall.com Pte Ltd | High Court | Yes | [2004] 2 SLR(R) 594 | Singapore | Cited for the principle that amendments to pleadings should be allowed if the opposing side has had an opportunity to address the points raised. |
| Chaplin v Hicks | English Court of Appeal | Yes | [1911] 2 KB 786 | England and Wales | Cited as authority for awarding damages for loss of a chance. |
| McRae v Commonwealth Disposals Commission | High Court of Australia | Yes | (1951) 84 CLR 377 | Australia | Discussed in relation to the principle of awarding damages for loss of a chance, distinguishing it from Chaplin v Hicks. |
| Straits Engineering Contracting Pte Ltd v Merteks Pte Ltd | Court of Appeal | Yes | [1995] 3 SLR(R) 864 | Singapore | Approved locally and cited for awarding damages for loss of a chance to make profits from an expansion of business. |
| ABC Supermarket Pte Ltd v Kosma Holdings Pte Ltd | High Court | Yes | [2005] SGHC 44 | Singapore | Commented on Straits Engineering, distinguishing between a real chance and a mere chance. |
| Asia Hotel Investments Ltd v Starwood Asia Pacific Management Pte Ltd | Court of Appeal | Yes | [2005] 1 SLR(R) 661 | Singapore | Cited for the two-stage enquiry to determine if there had been a loss of a chance. |
| Justlogin Pte Ltd v Oversea-Chinese Banking Corp Ltd | High Court | Yes | [2007] 1 SLR(R) 425 | Singapore | Clarified that for cases of loss of a chance, the concern is the loss of a chance of a favourable outcome rather than the favourable outcome itself. |
| Allied Maples Group Ltd v Simmons & Simmons | England and Wales Court of Appeal (Civil Division) | Yes | [1995] 1 WLR 1602 | England and Wales | Cited within Starwood for the principle that a real or substantial chance need not be proved on the balance of probabilities. |
| Raffles Town Club Pte Ltd v Tan Chin Seng | Court of Appeal | Yes | [2005] 4 SLR(R) 351 | Singapore | Endorsed the approach that where it is clear that the claimant has suffered substantial loss, but the evidence does not enable it to be precisely quantified, the court will assess damages as best it can on the available evidence. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Sub-lease
- Novation
- JTC Approval
- Best Endeavours
- Gross Floor Area
- Forfeiture
- Loss of Chance
15.2 Keywords
- sublease
- novation
- JTC
- breach of contract
- loss of chance
- warehousing
- logistics
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Contract | 95 |
| Contract Law | 90 |
| Sub-Lease Agreement | 85 |
| Novation Agreements | 75 |
| Property Law | 70 |
| Commercial Leasing | 60 |
| Forfeiture of Lease | 50 |
16. Subjects
- Contract Law
- Land Law
- Leases
- Civil Litigation