Y.E.S. F&B v Soup Restaurant: Contract Interpretation & Sub-Lease Agreement Dispute

The Court of Appeal of Singapore heard an appeal by Y.E.S. F&B Group Pte Ltd (YES) against Soup Restaurant Singapore Pte Ltd (Soup) regarding the interpretation of a sub-lease agreement. YES and Soup, formerly sister companies, disputed the duration of a sub-lease agreement for a portion of Soup's leased premises in Vivocity. The court allowed the appeal, finding that the sub-lease agreement remained valid as long as Soup leased the premises, and YES was not in wrongful possession.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Court of Appeal case between Y.E.S. F&B and Soup Restaurant concerning the interpretation of a sub-lease agreement and its duration.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Y.E.S. F&B GROUP PTE LTDAppellant, DefendantCorporationAppeal AllowedWon
SOUP RESTAURANT SINGAPORE PTE LTD (PREVIOUSLY KNOWN AS SOUP RESTAURANT (CAUSEWAY POINT) PTE LTD)Respondent, PlaintiffCorporationClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Chao Hick TinJustice of the Court of AppealNo
Andrew Phang Boon LeongJustice of the Court of AppealYes

4. Counsels

Counsel NameOrganization
Ong Pei ChingMorgan Lewis Stamford LLC
Tan Gim Hai AdrianMorgan Lewis Stamford LLC
Lim Siok KhoonMorgan Lewis Stamford LLC
Loh Jien LiMorgan Lewis Stamford LLC
Kenneth Lim Tao ChungAllen & Gledhill LLP
Chua XinyingAllen & Gledhill LLP
Lee May LingAllen & Gledhill LLP
Edwin TongAllen & Gledhill LLP

4. Facts

  1. YES and Soup were sister companies within the SRGL group.
  2. Soup leased Unit 141 in Vivocity, with the intention to sub-lease part of it to YES.
  3. YES and Soup entered into a Sub-Lease Agreement for a portion of Unit 141.
  4. YES renovated the Sub-Leased Premises for $210,000 to expand its kitchen and VIP rooms.
  5. The relationship between YES and Soup deteriorated, leading to a minority oppression suit.
  6. Soup claimed the Sub-Lease Agreement expired on 18 October 2012, demanding vacant possession.
  7. YES argued the Sub-Lease Agreement continued as long as Soup leased Unit 141.

5. Formal Citations

  1. Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd, Civil Appeal No 193 of 2014, [2015] SGCA 55
  2. Soup Restaurant Singapore Pte Ltd v Y.E.S. F&B Group Pte Ltd, , [2014] SGHC 246

6. Timeline

DateEvent
Y.E.S F&B Group Pte Ltd incorporated.
SRGL and SRI acquired a majority stake in YES.
YES entered into a lease for Unit 137.
Landlord offered YES the opportunity to lease Unit 141.
Soup received letter of offer for lease of Unit 141.
Soup informed the landlord that part of Unit 141 would be sub-leased to YES.
Soup and YES entered into the Sub-Lease Agreement.
Renovation works commenced on the Sub-Leased Premises.
Yik and Eliza were removed as directors of YES.
Formal lease agreement (2010 Lease Agreement) signed between Soup and the landlord.
Yik and Eliza commenced a minority oppression suit.
Minority oppression suit was resolved via a Settlement Agreement.
Soup's solicitors gave notice to YES to deliver vacant possession by 6 October 2012.
Expiry date of the Sub-Lease Agreement as stated in cl 5.4 of the Settlement Agreement.
Expiry date of the 2010 Lease Agreement.
Soup commenced proceedings against YES.
Soup reached an agreement with the landlord over the renewal of its lease for Unit 141.
YES offered to hand over the Sub-Leased Premises to Soup without admission of liability.
Handover of Sub-Leased Premises completed.
Judgment reserved.

7. Legal Issues

  1. Contract Interpretation
    • Outcome: The court held that the term 'the Company's lease' in the sub-lease agreement referred to a generic head lease, not just the initial lease.
    • Category: Substantive
    • Sub-Issues:
      • Ambiguity in contractual terms
      • Consideration of text and context
      • Objective intention of parties

8. Remedies Sought

  1. Vacant Possession
  2. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Wrongful Possession

10. Practice Areas

  • Commercial Litigation
  • Contractual Disputes
  • Lease Agreements
  • Sub-Lease Agreements

11. Industries

  • Food and Beverage
  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Fairview Developments Pte Ltd v Ong & Ong Pte LtdCourt of AppealYes[2014] 2 SLR 318SingaporeCited for the principle that contractual interpretation requires consideration of both the text and context of the contract.
PT Bakrie Investindo v Global Distressed Alpha Fund 1 Ltd PartnershipCourt of AppealYes[2013] 4 SLR 1116SingaporeCited to support the point that there is often more than one immutable meaning to words and phrases.
Sandar Aung v Parkway Hospitals Singapore Pte Ltd (trading as Mount Elizabeth Hospital) and anotherUnknownYes[2007] 2 SLR(R) 891SingaporeCited for the observation that the court ought to undertake a very careful analysis of the text and context in order to ascertain whether the text is indeed plain and unambiguous.
Arnold v Britton and othersUK Supreme CourtYes[2015] 2 WLR 1593United KingdomCited to illustrate that the court must ascertain, based on all the relevant objective evidence, the intention of the parties at the time they entered into the contract.
HSBC Trustee (Singapore) Ltd v Lucky Realty Co Pte LtdSingapore High CourtYes[2015] 3 SLR 885SingaporeCited for the principle that the text ought always to be the first port of call for the court.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdCourt of AppealYes[2008] 3 SLR(R) 1029SingaporeCited as a lodestar in the Singapore legal landscape in so far as contractual interpretation is concerned.
Multi-Link Leisure Developments Ltd v North Lanarkshire CouncilUK Supreme CourtYes[2011] 1 All ER 175United KingdomCited for the principle that the text ought always to be the first port of call for the court.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appealCourt of AppealYes[2013] 4 SLR 193SingaporeCited as a lodestar in the Singapore legal landscape in so far as contractual interpretation is concerned.
Citicorp Investment Bank (Singapore) Ltd v Wee Ah KeeCourt of AppealYes[1997] 2 SLR(R) 1SingaporeCited to illustrate that the meaning imputed by the court be one which “the words are reasonably adequate to convey”.
Sattva Capital Corporation (formerly Sattva Capital Inc) v Creston Moly Corporation (formerly Georgia Ventures Inc)Supreme Court of CanadaYes[2014] 2 SCR 633CanadaCited for the principle that the parol evidence rule does not apply to preclude evidence of surrounding circumstances.
Rainy Sky SA v Kookmin BankUK Supreme CourtYes[2011] 1 WLR 2900United KingdomCited for the principle that where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense.
Master Marine AS v Labroy Offshore Ltd and othersCourt of AppealYes[2012] 3 SLR 125SingaporeCited in passing.
Pink Floyd Music Ltd v EMI Records LtdEngland and Wales Court of Appeal (Civil Division)Yes[2010] EWCA Civ 1429England and WalesCited as one of the cases that show that the ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used.
Mannai Investment Co Ltd v Eagle Star Life Assurance Co LtdHouse of LordsYes[1997] AC 749United KingdomCited as one of the cases that show that the ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used.
Investors Compensation Scheme Ltd v West Bromwich Building SocietyHouse of LordsYes[1998] 1 WLR 896United KingdomCited as one of the cases that show that the ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used.
Chartbrook Ltd v Persimmon Homes LtdHouse of LordsYes[2009] AC 1101United KingdomCited as one of the cases that show that the ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used.
Aberdeen City Council v Stewart Milne Group LtdCourt of Session (Outer House)Yes[2012] SCLR 114ScotlandCited as an example of a case where the court gave effect to what it found to be the clear and unambiguous language of the term concerned.
Wickman Machine Tools Sales Ltd v L Schuler AGHouse of LordsYes[1974] AC 235United KingdomCited for the principle that commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made.
Antaios Cia Naviera SA v Salen Rederierna AB (The Antaios)House of LordsYes[1985] AC 191United KingdomCited for the principle that commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made.
McHale v Earl CadoganEngland and Wales Court of Appeal (Civil Division)Yes[2010] HLR 412England and WalesCited for the principle that the court should not “bring within the general words of a service charge clause anything which does not clearly belong there”.
Xia Zhengyan v Geng ChangqingCourt of AppealYes[2015] 3 SLR 732SingaporeCited for the principle that there may be cases where the court ought to eschew a strict construction of the relevant language of the contract and adopt instead a more common-sense approach that considers the reasonable and probable expectations that the parties would have had.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)Singapore
Section 94(f) of the Evidence Act (Cap 97, 1997 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Sub-Lease Agreement
  • Head Lease
  • Vivocity
  • Unit 141
  • Unit 137
  • Dian Xiao Er
  • Soup Restaurant
  • Settlement Agreement
  • Minority Oppression Suit
  • The Company's Lease

15.2 Keywords

  • Contract Interpretation
  • Sub-Lease
  • Lease Agreement
  • Commercial Dispute
  • Singapore Court of Appeal

17. Areas of Law

Area NameRelevance Score
Contract Law95
Interpretation of contractual terms90
Contracts80
Sub-Lease Agreement75
Commercial Leasing70
Breach of Contract60
Property Law40

16. Subjects

  • Contract Law
  • Lease Agreements
  • Sub-leases
  • Interpretation of Contracts