[2026] SGDC 150

District Judge Chiah Kok Khun

April 2026 Judgment reserved.

Introduction

This appeal (“RA”) from the decision of the learned deputy registrar (“DR”) is related to an assessment of damages (“AD”). The underlying dispute concerns the lease of a Tesla car (“the Vehicle”). The 1st defendant had entered into two rental agreements dated 7 December 2021 to rent the Vehicle from the claimant (Rental Agreements). The 2nd defendant was named as the authorised driver under the rental agreements. The 2nd and 3rd defendants also each entered into a letter of guarantee dated 7 December 2021 whereby they guaranteed payment to the claimant of all sums due under the Rental Agreements.

The Vehicle was seized by the Traffic Police for offences under the Road Traffic Act 1961 on 18 February 2022 when the 2nd defendant was involved in a hit-and-run road traffic accident. The 2nd defendant was charged in court for a number of offences. At the time of the hearing of the RA, the criminal proceedings against him were ongoing.

The claimant subsequently terminated the lease and made claims under the Rental Agreements. Summary judgment was entered on 11 April 2025, in the form of interlocutory judgment against the 1st, 2nd and 3rd defendants with damages to be assessed.

At the end of the AD, the following sums were assessed and ordered by the DR:

(a) The defendants are jointly and severally liable to pay the claimant damages assessed in the sum of $147,870.93 in relation to the claimant’s claims for the remaining contract value, late payment interest and administration fees.

(b) The defendants shall pay the claimant contractual interest on the damages awarded at the rate of 5% per month from 8 October 2024 to the date of payment.

(c) The defendants shall pay the claimant costs on an indemnity basis fixed at $16,625.00 plus disbursements fixed at $1,445.90.

The RA is the defendants’ appeal against the whole of the decision of the DR. The defendants also apply to adduce further evidence for purposes of the RA. The application is the subject matter of District Court Summons No 270 of 2026 (“SUM 270”).

For the reasons below, I am dismissing both the RA and SUM 270.

Analysis and findings

At the outset, I am mindful that an appeal from a deputy registrar to a district judge is a rehearing of the application which led to the order under appeal. It has been held that a district judge hearing a matter first heard by the registrar is not exercising appellate jurisdiction, but rehearing the matter and exercising a form of confirmatory jurisdiction. The appeal is to be decided as though the matter came before him for the first time: see Tan Boon Heng v Lau Pang Cheng David [2013] 4 SLR 718, (“Tan Boon Heng”) at [22]. Arguments which were not raised before may properly be considered by the judge in chambers on appeal. Where the registrar’s findings of fact are based solely on affidavit or documentary evidence, a judge in chambers will have little difficulty in deciding the matter afresh as he will have all the necessary evidence, materials and information before him, and the judge is in as good a position as the deputy registrar to exercise the discretion afforded to him: Tan Boon Heng at [44].

Liquidated damages are payable by the defendants under clause 18.1.2.3

I begin the analysis of this case with the undisputed facts. It is not disputed that the claimant, at the request of the 1st defendant, purchased the Vehicle, a brand new Tesla Model 3 Performance bearing vehicle number SJG906G from Tesla Singapore Pte Ltd and in turn leased it to the 1st defendant pursuant to two vehicle rental agreements both dated 7 December 2021 and containing identical terms. For purposes of financing the claimant’s purchase of the Vehicle, the claimant entered into a facility agreement with DBS Bank Ltd. The total rental period was for 84 months, from 7 December 2021 to 6 December 2028. The monthly rental rate was $2,759.00 per month plus Goods and Services Tax (“GST”). The 2nd defendant was the person authorised to drive the Vehicle. As alluded to above, the 2nd and 3rd defendants also executed two separate, but identical personal guarantees dated 7 December 2021 in favour of the claimant (“Guarantees”).

It is not disputed that not long after the leasing the Vehicle, the 2nd defendant was involved in an alleged hit-and-run road traffic accident whilst driving the Vehicle. Five criminal charges were brought against the 2nd defendant. The vehicle was seized by the Traffic Police for offences under the Road Traffic Act. The claimant’s request to the Traffic Police for the release of the Vehicle to them was to no avail. Further, despite the claimant’s appeals, the vehicle was deregistered by the Land Transport Authority on 18 February 2022.

The claimant thus terminated the Rental Agreements pursuant to the terms therein. The claimant then commenced the underlying action to this RA against the defendants, claiming, amongst others, the sum of $147,870.93 in relation to the remaining contract value, late payment interest and administration fees. The clauses of the Rental Agreements that the claimant relied on in its action are pleaded by the claimant in the statement of claim. I set out below some of the key clauses as pleaded in para 10 of the statement of claim:

It is seen that under the terms of the Rental Agreements as pleaded by the claimant, the defendants were not to cause the rights of the claimant to the Vehicle to be prejudiced or affected in any way (clause 5.1). And if the defendants were in breach of any terms of the Rental Agreements, the claimant may terminate the Rental Agreements immediately (clause 17.2). Further, upon such termination, the defendants would be liable for premature termination damages comprising the liquidated damages being the sum equivalent to the rental payable for the unexpired duration of the rental period (clause 12.1.2.3). It is on this basis that the claimant claimed in the underlying action against the defendants for the remaining contract value of the Rental Agreements of 49 months rental from 7 November 2024 to 6 December 2028 amounting to $147,358.19.

The claimant applied for summary judgment on 13 December 2024 and was granted interlocutory judgment (on liability) against the defendants on 11 April 2025. In other words, we are past the question of liability under the Rental Agreement. The question of liability has been adjudicated fully at the summary judgment stage and the liability of the defendants under Rental Agreement is subsumed in the interlocutory judgment entered against them.

At the centre of the dispute between the parties at the AD is clause 18.1.2.3 of the Rental Agreements. As alluded to above, the clause provides that upon early termination of the Rental Agreements the defendants are to immediately pay the claimant liquidated damages equivalent to the rental payable for the unexpired duration of the rental period.

At the outset, it is noted that clause 18.1.2.3 is clear and unambiguous. It states plainly that upon early termination of the Rental Agreements the defendants are to immediately pay the claimant liquidated damages equivalent to the rental payable for the unexpired duration of the rental period. There is no room for any alternative interpretation of the clause, and the defendants do not dispute the plain meaning of the clause.

The defendant’s contention at the RA instead is that clause 18.1.2.3 infringes the rule against penalties. The defendants devoted the bulk of their written submissions filed for the RA exclusively on their argument that clause 18.1.2.3 is an unenforceable penalty. In those submissions, the defendants set out at length the penalty doctrine first laid down in Dunlop Pneumatic Tyre Company, Ltd v New Garage and Motor Company, Limited [1915] AC 79, and their contention as to why clause 18.1.2.3 infringes the rule against penalties. The defendants argue that as the claimant relies on clause 18.1.2.3 as the sole basis for its claim, the claim must therefore fail.

The defendants did not plead the penalty rule

The defendants however face an insurmountable huddle in their contention. They have not pleaded in their defence that clause 18.1.2.3 offends the rule against penalties. There was in fact no reference at all to the rule against penalties in the defence. As the defendants has placed great store by the penalty doctrine in arguing their RA, I set out below the entire defence in the manner it was filed by the defendants:

It is seen that no mention is made of the penalty rule. The defendants however contended vigorously in their written submissions that they have pleaded the rule against penalties in the above defence. It is plain however that by no stretch of any imagination can it be said the rule against penalties is pleaded in the defence, and I do not see how it can be argued otherwise.

For the sake of completeness, I turn now to the legal principles on pleadings. In this regard, I have in mind two Court of Appeal decisions in considering whether the defendants should be allowed to depart from their pleaded case.

The first case is the Court of Appeal decision of BOM v BOK and another appeal [2019] 1 SLR 349 (“BOM”). In BOM, the Court of Appeal reiterated that the role of pleadings is to define the scope of dispute and thus to inform parties of issues in contention. However, evidence given at trial can where appropriate, overcome defects in the pleadings provided that the other party is not taken by surprise or irreparably prejudiced (at [40]). The strict approach to pleadings is rejected by the Court of Appeal. The test of adequacy of pleadings that can be distilled from the case is thus whether the other party is prejudiced by being taken by surprise.

Clause 18.1.2.3 is plain and unambiguous

With the rule against penalties out of the way, I return to the effect of clause 18.1.2.3. As seen above, clause 18.1.2.3 states plainly that upon early termination of the Rental Agreements the defendants are to immediately pay the claimant liquidated damages equivalent to the rental payable for the unexpired duration of the rental period. The underlying thrust of the defendants’ case at the RA is essentially that the clause is too harsh. However, as noted by the DR, the Rental Agreements reflect the contractual bargain that the defendants had agreed to in signing the Rental Agreements and the Guarantees. In my view, parties are free to contract and the corollary of freedom to contract is the sanctity of contract. In the High Court decision of Forefront Medical Technology (Pte) Ltd v Modern-Pak Pte Ltd [2006] 1 SLR(R) 927, at [24] and [26] the Honourable Justice Andrew Phang (as he then was) emphasised that sanctity of contract is vital to certainty and predictability in commercial transactions:

As observed by the High Court, the perception of the importance of commercial certainty and predictability is deeply entrenched within the commercial legal landscape in general and in the individual psyches of not only commercial parties, but also non-commercial parties. Once a contract is entered into, parties are expected to abide by the terms as agreed. Having entered into the Rental Agreements, the defendants cannot be heard now to contend that the terms are too harsh for their liking.

I would add for completeness that there is no room for extrinsic evidence to alter the clear meaning of clause 18.1.2.3 that was intended by the parties. The approach to the admissibility of extrinsic evidence to affect written contracts has been set out in the Court of Appeal decision of Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029. The Court of Appeal held at [132] as follows:

It is seen therefore that a court should always be careful to ensure that even if extrinsic evidence is admitted, it is to be used to explain and illuminate the written words, and not to contradict or vary them. Further, the court ought to be more reluctant to allow extrinsic evidence to affect standard form contracts and commercial documents. Where a contract is complete on its face, the language of the contract constitutes prima facie proof of the parties’ intentions. The principle of objectively ascertaining contractual intention is paramount. Any extrinsic evidence must always go towards proof of what the parties, from an objective viewpoint, ultimately agreed upon. In the present case, there is plainly no room to alter the clear meaning of clause 18.1.2.3 that was intended by the parties. The Rental Agreements were terminated by the claimant pursuant to clause 17 following the defendant’s breach and the claimant is contractually entitled under clause 18.1.2.3 to the sum of $147,358.19, being the sum equivalent to the rental payable for the unexpired duration of the rental period.

The defendants also raised the contention that the claimant has failed to prove its damages. In this regard, the defendants appear to be saying that the claimant must prove that it suffered the actual loss of the sum of $147,358.19 as claimed. This contention is wholly misguided. The sum of $147,358.19 is claimed by the claimant as liquidated damages under clause 18.1.2.3. The reason for liquidated damages to be provided for under any contract is so that damages need not be proved by the innocent party in the event of a breach. It is precisely why parties contract for liquidated damages clauses in their agreements. Clause 18.1.2.3 resides in the Rental Agreements so that the claimant could claim for liquidated damages without having to prove actual loss. There is no merit in the defendant’s contention.

The other belated contention of the defendants concerns the duty of the claimant to mitigate damages. This can be dealt with briefly in view of my discussion on the question of pleadings. As noted by the DR, it is uncontroverted that the defendants must plead and prove that the claimant has failed to fulfil its duty to mitigate its loss. As seen in the defence set out above, there is no allusion to the claimant’s duty to mitigate in the defence. There is also no evidence regarding the claimant’s failure to mitigate. This is conceded as much by the defendants’ counsel in arguments before me. There is plainly no merit in this contention.

Finally, as regards the claim for late payment interest and administration fees, I only need to note that they are provided for under the Rental Agreements. It is unclear to me what is the defendants’ objections to this claim. I would refer to my discussion above regarding the contractual bargain that the defendants had agreed to in signing the Rental Agreements and the Guarantees.

The further evidence is not relevant to the RA

For completeness, I will now deal with the application by the defendants under SUM 270 to admit further evidence for purposes of the RA. The defendants applied for leave under SUM 2070 to adduce further evidence at the RA of the following three categories of documents:

(a) Category 1: documents pertaining to the release of the Vehicle (which is the subject of the Rental Agreements) from the impound as of 5 February 2026;

(b) Category 2: documents pertaining to the current market rates for rental and pre-owned sale prices of vehicles similar to the Vehicle; and

(c) Category 3: documents pertaining to the “lease to own” arrangement between the 1st defendant and the claimant in relation to the Vehicle.

The defendants seek admission of the three categories of documents for purposes of supporting their contention that clause 18.1.2.3 infringes the rule against penalties. The claimant objects to the adduction of the documents for the reason that the documents do not meet the requirement of relevance.

I turn first to the law. The legal principles in respect of an application to adduce further evidence in an appeal are well settled. The applicable test is laid down in Ladd v Marshall [1954] 1 WLR 1489 (the “Ladd v Marshall test”).

Under the Ladd v Marshall test, if the further evidence does not relate to matters occurring after the date of the decision appealed against, the applicant must show special grounds warranting the admission of further evidence. The Court of Appeal of Singapore in COD v COE [2023] SGCA 29 elaborated on the approach to the admission of further evidence that was already available before the hearing at the lower court. The Court of Appeal stated as follows at [37]:

Hence, the Court of Appeal was of the view that if the further evidence did not become available only after the date of the decision appealed against, the following conditions are to be satisfied:

If, however, the further evidence became available only after the date of the decision appealed against, then the court should instead apply a modified version of the Ladd v Marshall test (“the Ladd v Marshall Modified Test”). The was also elaborated on in COD v COE [2023] SGCA 29, at [38] as follows:

As seen, the court in this scenario is to take the following steps under the Ladd v Marshall Modified Test:

(a) ascertain what the relevant matters are, of which evidence is sought to be given, and ensure that these are matters that occurred after the trial or hearing below;

(b) satisfy itself that the evidence of these matters is at least potentially material to the issues in the appeal; and

(c) satisfy itself that the material at least appears to be credible.

The Ladd v Marshall tests discussed above can be broadly characterised as encompassing the three requirements of non-availability, relevance and credibility.

It is of pertinence to note however that in Anan Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2019] 2 SLR 341 (“Anan Group”), the Court of Appeal held that the court is not obliged to strictly apply Ladd v Marshall in the context of an interlocutory appeal. The Court of Appeal stated as follows at [35]:

In other words, it is for the court to determine the extent to which the first step of the Ladd v Marshall test of non-availability should be applied strictly, depending on the nature of the proceedings below. The Court of Appeal made it clear that where the hearing was not upon the merits at all, such as in the case of interlocutory appeals, then Ladd v Marshall serves as a guideline which the court is entitled but not obliged to refer to in the exercise of its unfettered discretion.

Finally, the Court of Appeal has held that the judge hearing a registrar’s appeal exercises confirmatory, rather than appellate, jurisdiction and rehears the case afresh. The judge is entitled to exercise an unfettered discretion, including on the admissibility of fresh evidence. The Court of Appeal stated as follows in Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) (“Lassiter”) [2004] 2 SLR(R) 392 at [10]:

It is seen that in a registrar’s appeal, the judge treats the matter afresh as though it came before him the first time, with the practice of allowing fresh affidavit evidence in such appeals. However, in the context of an appeal from the assessment of damages by the registrar, the Court of Appeal cautioned that it is not suggesting that a party should be free to bring in fresh evidence as he pleases. The Court of Appeal stated as follows at [24]-[26]:

It is seen that the Court of Appeal mandated a balanced approach. Whilst the imposition of the same stringent requirement of the Ladd v Marshall test on an appeal from an assessment by the registrar to the judge would not be appropriate and the judge should be given a wider discretion; it does not mean that the discretion ought to be exercised liberally. There must still be sufficiently strong reasons why the new evidence was not adduced at the assessment before the registrar. In other words, whilst the second and third requirement, that of relevance and credibility respectively remain applicable, wider discretion is given to the court as regards the first requirement of non-availability.

Applying the foregoing to the present case, whilst I have a wider discretion as regards the first requirement under the Ladd v Marshall test of non-availability in an RA arising from an AD, the defendants face an insurmountable hurdle at the second requirement. This is the requirement of relevance. The defendants are not able to show that the evidence of these categories of documents is potentially material to the issues in the RA simply because as discussed above, the issue of the penalty rule cannot be argued before me. It has not been pleaded and the issue of whether the claimant has infringed the rule against penalties cannot be considered in the RA. Any evidence relating to the question of the penalty rule would not be relevant to the RA. The three categories of documents therefore do not pass muster under the requirement of relevance. I therefore dismiss the application under SUM 270.

Conclusion

Clause 18.1.2.3 of the Rental Agreements is plain and unambiguous and liquidated damages are payable by the defendants under the clause. The defendants did not plead the penalty rule nor tender any evidence at the AD regarding how clause 18.1.2.3 infringes the penalty rule. The defendants cannot now argue that clause 18.1.2.3 infringes the rule against penalties. The further evidence sought to be admitted concerns the defendants’ contentions in regard to the penalty rule and is thus not relevant to the RA for the same reasons.