HONG SEH MOTORS PTE LTD v RYNENATION PTE. LTD. & 2 Ors

Facts

Hong Seh Motors Pte Ltd bought a new Tesla Model 3 at the request of Rynenation Pte Ltd and leased it to Rynenation under two identical rental agreements dated 7 December 2021, for 84 months at $2,759.00 a month plus GST. Mr Peter Chan Chuin Howe was the authorised driver, and he and Ms Kang Huey Min, Geraldine each guaranteed the payments. On 18 February 2022 the car was seized by the Traffic Police after Mr Chan was involved in an alleged hit-and-run accident, and it was deregistered. Hong Seh terminated the agreements and claimed, among other things, liquidated damages under clause 18.1.2.3 equal to the rental for the unexpired period.

In District Court Originating Claim No 1819 of 2024, interlocutory judgment was entered against all three defendants on 11 April 2025. At the assessment of damages, the deputy registrar awarded $147,870.93 for the remaining contract value, late payment interest and administration fees, with contractual interest and indemnity costs. The defendants appealed in Registrar's Appeal No 3 of 2026 and applied in District Court Summons No 270 of 2026 to adduce further evidence.

Issues

1. Whether the defendants could argue on appeal that clause 18.1.2.3 was an unenforceable penalty when they had not pleaded it.
2. Whether clause 18.1.2.3 was plain and unambiguous and liquidated damages were payable under it.
3. Whether the further evidence satisfied the requirement of relevance under the Ladd v Marshall principles.

Holding

District Judge Chiah Kok Khun dismissed both the registrar's appeal and the application to adduce further evidence, holding that liquidated damages were payable under clause 18.1.2.3. The parties were directed to file written submissions on costs.

Reasoning

The court noted that an appeal from a deputy registrar is a rehearing, but the defendants' defence made no reference at all to the rule against penalties. Applying BOM v BOK and How Weng Fan v Sengkang Town Council, an unpleaded point may be allowed only if the other party is not taken by surprise or irreparably prejudiced. No evidence on the penalty point was led at the assessment, the parties never engaged with it, and the claimant had no chance to test such evidence, so the point could not be run on appeal.

Clause 18.1.2.3 plainly required the lessee, on early termination, to pay liquidated damages equal to the rental for the unexpired period, and the defendants did not dispute its meaning. Their real complaint was that the clause was too harsh, but under the principle of sanctity of contract stated in Forefront Medical Technology they were held to their bargain. Extrinsic evidence could not contradict the clear words of a standard form contract. The argument that the claimant had to prove actual loss misunderstood liquidated damages, and failure to mitigate was neither pleaded nor supported by evidence. Late payment interest and administration fees were provided for in the agreements.

On the further evidence, a judge hearing an appeal from an assessment has wider discretion on non-availability, as explained in Lassiter Ann Masters v To Keng Lam, but relevance and credibility still apply. All three categories of documents were sought to support the penalty argument, which could not be raised, so they failed the requirement of relevance.

From the judgment