Prince Restaurant v Kosma Holdings: Breach of Tenancy Agreement Dispute

Prince Restaurant Pte Ltd appealed to the High Court of Singapore against the District Court's decision, in District Court Appeal 4 of 2017, dismissing their claim against Kosma Holdings Pte Ltd for breaches and wrongful termination of a tenancy agreement, while allowing Kosma Holdings' counterclaim for breaches of the same agreement. Audrey Lim JC affirmed the trial judge’s decision and dismissed the appeal with costs. The dispute centered on the terms of the tenancy agreement, including the monthly rent, payment dates, and whether the termination was lawful.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding breaches and wrongful termination of a tenancy agreement. The court affirmed the trial judge's decision, dismissing the appeal with costs.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Prince Restaurant Pte LtdAppellantCorporationAppeal DismissedLost
Kosma Holdings Pte LtdRespondentCorporationCounterclaim AllowedWon

3. Judges

Judge NameTitleDelivered Judgment
Audrey LimJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Singa RetnamI R B Law LLP
Gopalakrishnan DinagaranPrestige Legal LLP
Ho JiaxinM/s Lee & Lee
Toh Kok SengM/s Lee & Lee

4. Facts

  1. Prince Restaurant Pte Ltd (appellant) rented premises from Kosma Holdings Pte Ltd (respondent) based on a tenancy agreement.
  2. A Letter of Intent (LOI) was signed around 20 June 2014, stating the commencement of the lease as 3 July 2014.
  3. The appellant allegedly failed to pay the monthly rent in full and/or promptly.
  4. The respondent terminated the tenancy and re-entered the premises on 9 April 2015.
  5. The appellant claimed a rent-free period and a lower monthly rent than what the respondent asserted.
  6. The respondent claimed the monthly rent was $17,655 (inclusive of GST) with a $1,500 rebate for prompt payment.
  7. The appellant argued the rent was payable from 14 July 2014, not 3 July 2014.

5. Formal Citations

  1. Prince Restaurant Pte Ltd v Kosma Holdings Pte Ltd, District Court Appeal 4 of 2017, [2017] SGHC 245

6. Timeline

DateEvent
Letter of Intent signed
Keys to the Premises were handed to the appellant
First page of tenancy agreement signed
Tenancy agreement signed
Electricity supply to the Premises turned off
Notice given regarding termination of tenancy
Premises physically re-entered
Hearing of appeal
Hearing of appeal
Hearing of appeal
Decision affirmed and appeal dismissed

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the appellant was in breach of the tenancy agreement for failing to pay rent in full and on time, and that the respondent lawfully terminated the lease.
    • Category: Substantive
    • Sub-Issues:
      • Wrongful termination
      • Failure to pay rent
      • Interruption of peaceable enjoyment
  2. Contractual Interpretation
    • Outcome: The court found that any ambiguity in the tenancy agreement was dispelled when considering the overall context of the agreement and the conduct of the parties.
    • Category: Substantive
    • Sub-Issues:
      • Ambiguity in contract terms
      • Contra proferentum rule
      • Extrinsic evidence
  3. Adverse Inference
    • Outcome: The court declined to draw an adverse inference against the respondent for failing to call a witness, as the appellant did not show that the witness's evidence had potential significance to the entire matter.
    • Category: Procedural
    • Sub-Issues:
      • Failure to call witness
      • Potential significance of evidence

8. Remedies Sought

  1. Damages for breach of contract
  2. Reinstatement of Tenancy Agreement

9. Cause of Actions

  • Breach of Contract
  • Wrongful Termination of Tenancy Agreement

10. Practice Areas

  • Commercial Litigation
  • Real Estate Law

11. Industries

  • Food and Beverage
  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Hewlett-Packard Singapore (Sales) Pte Ltd v Chin Shu Hwa CorinnaCourt of AppealYes[2016] 2 SLR 1083SingaporeCited for the principle that the contra proferentum rule is applied as a last resort in contractual interpretation.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdCourt of AppealYes[2008] 3 SLR(R) 1029SingaporeCited for endorsing the contextual approach to contractual interpretation, including the admissibility of extrinsic evidence.
Alwee Alkaff v Syed Jafaralsadeg and others and another actionHigh CourtYes[1997] 3 SLR(R) 419SingaporeCited for the principle that a lessor has a right to forfeit a lease for non-payment of rent if this is expressly reserved by the lease.
Protax Co-operative Society Ltd v Toh Teng Seng and anotherHigh CourtYes[2001] SGHC 84SingaporeCited for the principle that forfeiture can be done by way of physical and peaceable re-entry without a court order if the conditions contained in the forfeiture clause in the lease are satisfied and the right has not in the meantime been waived by the lessor.
Kataria v Safeland plcEnglish Court of AppealYes[1998] 1 EGLR 39England and WalesCited for the principle that forfeiture can be done by way of physical and peaceable re-entry without a court order if the conditions contained in the forfeiture clause in the lease are satisfied and the right has not in the meantime been waived by the lessor.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed)Singapore
Evidence Act (Cap 97, 1997 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Tenancy Agreement
  • Letter of Intent
  • Rent
  • Rental Rebate
  • Termination
  • Re-entry
  • Arrears
  • Guarantee
  • Commencement Date
  • Vacant Possession

15.2 Keywords

  • tenancy agreement
  • breach of contract
  • wrongful termination
  • rent
  • rental arrears
  • commercial lease
  • Singapore High Court

17. Areas of Law

Area NameRelevance Score
Breach of Contract90
Contract Law80
Landlord and Tenant Law75
Tenancy Agreement60
Property Law40

16. Subjects

  • Contract Law
  • Real Estate
  • Leases and Tenancies