CAMPBELL HOSPITALITY PTE LTD & 2 Ors v MARCHMONT PTE LTD

Facts

Marchmont Pte Ltd leased parts of a hotel property at 51 Joo Chiat Road to Campbell Hospitality Pte Ltd under a tenancy agreement dated 22 June 2021, for a three-year term from 1 August 2021 to 31 July 2024. From 14 December 2021 Marchmont issued three notices of breach (NOBs) and two notices of termination (NOTs). NOB 1 centred on Campbell's alleged breach of the limit of two occupants per room; NOB 2 concerned non-compliance with the insurance requirements; and NOB 3 listed maintenance, cleanliness and staffing breaches. Campbell stayed in possession and kept paying monthly sums, which Marchmont said it accepted only as set-off against double rent for holding over. Marchmont sued for possession in HC/OC 492/2022, served on 28 December 2022, also naming Campbell's directors Ms Fu Yao and Mdm Wang Cuirong as guarantors.

The trial judge held that NOB 1 and NOB 3 were invalid under s 18(1) of the Conveyancing and Law of Property Act 1886 because some breaches were insufficiently particularised, but that NOB 2 and NOT 2 were valid. He found Marchmont had waived forfeiture by accepting payments until it served the claim, refused Campbell relief from forfeiture, and awarded double rent under s 28(4) of the Civil Law Act 1909 only from 29 December 2022. Campbell appealed in AD/CA 38/2024 and Marchmont cross-appealed in AD/CA 46/2024.

Issues

1. Whether a notice of breach listing several breaches is wholly invalid under s 18(1) if any one of them is insufficiently particularised
2. Whether a notice of termination alone forfeited the tenancy, or only the commencement and service of the action did
3. Whether Marchmont waived its right of forfeiture by receiving Campbell's monthly payments and by its other conduct
4. Whether Campbell should have been granted relief from forfeiture, and from when double rent was payable

Holding

The Appellate Division dismissed Campbell's appeal in AD 38 in its entirety and allowed Marchmont's appeal in AD 46 in part. All three notices of breach and both notices of termination were valid, and Marchmont did not waive forfeiture after January 2022, but the tenancy was forfeited only on service of OC 492 on 28 December 2022, so double rent ran from 29 December 2022 as the judge had held. Campbell was ordered to pay costs of both appeals fixed at $75,000 all in, and the 20% discount on Marchmont's costs below was reduced to 10%.

Reasoning

On particulars, the court preferred the House of Lords' approach in Fox v Jolly [1916] 1 AC 1 to the High Court decision in Lee Tat Realty Pte Ltd v Limco Products Manufacturing Pte Ltd and others and another suit [1998] 2 SLR(R) 258. Section 18(1) requires only that the particular breach be specified; a notice is valid for any breach that is sufficiently particularised, and a non-exhaustive list does not by itself invalidate it. The tenant remains protected because only adequately particularised breaches can be relied on and reasonable time to remedy must be given. On that basis NOB 1, NOT 1 and NOB 3 were valid.

On forfeiture, a contractual right to end a lease early on the tenant's default is a right of forfeiture subject to s 18(1). The court accepted the settled common law position that forfeiture requires a final, positive and irretractable act, such as re-entry or commencing an action; a notice of termination lacks that finality. Extending the law to treat a notice as sufficient was a step too far, so forfeiture occurred only on service of OC 492.

On waiver, the court disagreed with the judge. Receipt of money is not automatically acceptance of rent. Campbell paid unilaterally, Marchmont made no demands after January 2022, and it consistently stated in writing that the tenancy had ended and payments would go towards double rent. The doctrine of appropriation did not apply where there was one debt whose character was disputed. Only payments made in response to the rent demands of 1 December 2021 and 1 January 2022 would have been a waiver, and that waiver did not extend beyond January 2022. The occupancy and insurance breaches were continuing and remained unremedied when the action was served.

Relief from forfeiture was rightly refused: the breaches carried regulatory implications, Campbell could not call the insurance breach merely technical after earlier claiming compliance was impossible, and there was no clear evidence for its alleged windfall to Marchmont. Holding over under s 28(4) required no proof of the tenant's intention or knowledge, and in any event Campbell knew Marchmont was seeking possession.

From the judgment