Dathena Science v Justco: Frustration & Unfair Contract Terms in Workspace Lease Dispute
In a suit before the General Division of the High Court of Singapore, Dathena Science Pte Ltd sued Justco (Singapore) Pte Ltd for breach of contract, seeking a refund of $286,891.50. The dispute arose from a Membership Agreement for office space that Dathena could not occupy due to Covid-19 restrictions. Justco counterclaimed for $2,399,796.00, representing the membership fee for the entire lease duration. The court, Lai Siu Chiu SJ presiding, found the Membership Agreement frustrated due to the pandemic-related delays and ruled in favor of Dathena, dismissing Justco's counterclaim.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment reserved
1.5 Jurisdiction
Singapore
1.6 Description
Dathena Science sues Justco for breach of contract over a workspace lease. Court finds the contract frustrated and rules in favor of Dathena.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Dathena Science Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Justco (Singapore) Pte Ltd | Defendant | Corporation | Counterclaim Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Senior Judge | Yes |
4. Counsels
4. Facts
- Dathena and JustCo entered into a Membership Agreement for office space at OCBC Centre East.
- The agreed commencement date of the lease was 1 May 2020.
- Dathena paid JustCo a deposit of $286,891.50.
- The Covid-19 pandemic and Circuit Breaker Measures caused delays in the completion of the OCBC Premises.
- JustCo could not deliver the OCBC Premises to Dathena on 1 May 2020.
- JustCo offered Dathena alternative premises at Verizon and Bras Basah, which Dathena rejected.
- Dathena issued a Notice of Termination on 29 May 2020 due to the delays and uncertainty.
- JustCo insisted the Membership Agreement remained in effect and counterclaimed for the full lease amount.
5. Formal Citations
- Dathena Science Pte Ltd v Justco (Singapore) Pte Ltd, Suit No 847 of 2020, [2021] SGHC 219
6. Timeline
| Date | Event |
|---|---|
| Dathena Science Pte Ltd incorporated in Singapore. | |
| JustCo (Singapore) Pte Ltd incorporated in Singapore. | |
| JustCo proposed that it let to Dathena units located at OCBC Centre East. | |
| Dathena and JustCo entered into a Membership Agreement. | |
| Dathena paid JustCo the Deposit of $286,891.50. | |
| The World Health Organisation declared the Covid-19 pandemic to be a global health crisis. | |
| Singapore Government announced Circuit Breaker Measures to be implemented on 7 April 2020. | |
| Circuit Breaker Measures implemented. | |
| Government announced that the Circuit Breaker Measures would be extended to 1 June 2020. | |
| Original commencement date of the Lease. | |
| Dathena issued a Notice of Termination to JustCo. | |
| JustCo rejected Dathena’s request for a refund. | |
| Dathena’s solicitors sent a letter of demand to JustCo requiring refund of the Deposit within 14 days. | |
| JustCo informed Dathena that the OCBC Premises would be available from 9 September 2020 to 30 April 2022. | |
| Dathena commenced suit against JustCo. | |
| JustCo filed its Defence and Counterclaim. | |
| Trial began. | |
| Trial concluded. | |
| Judgment reserved. |
7. Legal Issues
- Frustration of Contract
- Outcome: The court held that the Membership Agreement was frustrated due to the Covid-19 pandemic and related measures.
- Category: Substantive
- Sub-Issues:
- Impossibility of performance
- Radical change in contractual obligation
- Breach of Contract
- Outcome: The court found that JustCo's delays in delivering the OCBC Premises amounted to a breach of contract.
- Category: Substantive
- Sub-Issues:
- Repudiatory breach
- Breach of condition
- Failure to deliver premises
- Unenforceability of Contractual Terms
- Outcome: The court found certain clauses in the Membership Agreement to be unfair and unenforceable under the Unfair Contract Terms Act.
- Category: Substantive
- Sub-Issues:
- Exclusion of liability
- Standard terms of business
- Reasonableness
- Mitigation of Loss
- Outcome: The court found that JustCo failed to take reasonable steps to mitigate its loss.
- Category: Substantive
- Sub-Issues:
- Reasonable steps to mitigate
- Failure to find alternative tenants
8. Remedies Sought
- Refund of Deposit
- Declaration that the Membership Agreement was terminated
9. Cause of Actions
- Breach of Contract
- Frustration of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Real Estate
- Cybersecurity
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 413 | Singapore | Cited in support of the position that JustCo’s delays in delivering the OCBC Premises to Dathena amounted to a breach of a condition of the Membership Agreement. |
| Tian Teck Construction Pte Ltd v Exklusiv Auto Pte Ltd | High Court | Yes | [1992] 1 SLR(R) 948 | Singapore | Cited in support of the position that JustCo’s delays in delivering the OCBC Premises to Dathena amounted to a breach of a condition of the Membership Agreement. |
| Klerk-Elias Liza v K T Chan Clinic Pte Ltd | High Court | Yes | [1993] 1 SLR(R) 609 | Singapore | Cited to support the submission that JustCo could not claim for losses which could have been mitigated by finding alternative tenants within a reasonable time period. |
| Ng Giap Hon v Westcomb Securities Pte Ltd and Anor | Court of Appeal | Yes | [2009] 3 SLR(R) 518 | Singapore | Cited to support the submission that an entire agreement clause does not preclude the implication of terms into a contract. |
| Hongkong and Shanghai Banking Corp Ltd v Jurong Engineering Ltd and Others | High Court | Yes | [2000] 1 SLR(R) 204 | Singapore | Cited by JustCo to argue that it had no contractual obligation to deliver the server room. The court found the case not relevant. |
| Allied Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd | Court of Appeal | Yes | [2014] 3 SLR 857 | Singapore | Cited for the principle that the doctrine of frustration of contracts and the operation of the FCA is not dependant on parties’ agreement. |
| The “Asia Star” | Court of Appeal | Yes | [2010] 2 SLR 1154 | Singapore | Cited for the principle that a contracting party has a duty at law to take reasonable steps to mitigate its loss. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (2014 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Unfair Contract Terms Act (Cap 396, 1994 Rev Ed) | Singapore |
| Frustrated Contracts Act (Cap 115, 2014 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Membership Agreement
- Circuit Breaker Measures
- OCBC Premises
- Verizon Premises
- Bras Basah Premises
- Notice of Termination
- Deposit
- Frustration
- Unfair Contract Terms Act
- Additional Services
15.2 Keywords
- contract
- lease
- covid-19
- frustration
- unfair contract terms
- workspace
- office space
- cybersecurity
- singapore
17. Areas of Law
16. Subjects
- Contract Law
- Commercial Law
- Lease Agreements
- Covid-19
- Commercial Litigation