Restaurant owners sue for S$10,612 deposit, S'pore court orders them to pay landlord S$62,100 instead

The judge found the restaurant owners breached their contract and should compensate the landlord for her loss in rental income.

Kerr Puay Hian | August 01, 2023, 04:23 PM



A district court ordered the proprietors of Sun Erniang Eatery and Drinks to pay their landlord S$62,100 after they failed their suit to reclaim their S$10,612.80 security deposit.

Trouble brewed when MCST banned tables & chairs in common areas

According to a judgment made publicly available on Aug. 1, 2023, Koh Kia Yeong and Sun Yanli had been the tenants of the restaurant unit on the first floor of Sultan Plaza from April to October 2021.

The tenancy, with a monthly rent of S$4,800, was supposed to end in March 2024.

It got terminated prematurely after the tenants fell out with their landlord, Sofeene Ang, over Sultan Plaza's MCST's decision to ban tenants from setting up tables and chairs in common areas.

Kok and his alleged business partner Jasmine Tan repeatedly sought Ang's help between Sep. 27 and Oct. 14, 2021, to obtain approval from the MCST for them to use the common area.

They claimed their business would not be viable otherwise.

Didn't pay rent

However, Ang made it clear to Kok and Tan that there was nothing she could do about MCST's decision and that she would hire people to clear out the common area if they did not do so.

Kok and Tan then agreed to shift away the chairs and remove the awnings in the common area.

On Oct. 15, 2021, Ang's lawyer issued a letter to Kok and Sun demanding payment for the month's rent.

As the rent was never paid, the tenancy agreement was terminated, and Ang re-entered the unit on Oct. 25, 2021, by locking it up.

Restaurant owners sued landlord for deposit back

Kok and Sun sued Ang in court on November 2021 to demand their three-month security deposit, which they claimed comes up to S$10,612.80 after deducting the unpaid rent.

Ang, represented by Lim Yong & Kuek Kai Liang from Eldan Law, rejected their claims and filed a counterclaim against them, demanding compensation for her loss in rental income for the remaining tenancy period.

She claimed that Kok and Sun had "repudiated" the lease and should compensate her.

Judge found restaurant owners "repudiated" lease

In his judgment, the district judge explained that "repudiating" means breaching the contract by simply renouncing contractual obligations without a right to terminate.

He added that general contractual principles on repudiation apply to leases in Singapore.

After examining the evidence, the judge found that Kok and Sun had repudiated the lease.

He explained that messages showed Kok repeatedly trying to distance himself from the tenancy agreement by claiming to Ang that Tan had taken over the business.

This was despite Ang insisting that Kok and Sun had signed the tenancy agreement and that they should continue to handle rent matters.

The judge said Kok's conduct seemed like an attempt to force Ang to accept Tan as a "replacement" tenant.

Restaurant ordered to pay compensation

After assessing that Kok and Sun had repudiated the lease, the judge determined that Ang was entitled to compensation arising from the termination of the contract.

Even though Ang would have received S$144,000 if the lease had run its full course, the judge deducted S$67,500 as she had found another tenant who rented the premises at a lower rent of S$3,000 a month.

The judge also found no basis for the security deposit to be returned. After factoring it into the compensation, he ordered Kok and Sun to compensate S$62,100 and interest to Ang.

Top image via Google Maps