Background
Fujifilm leased an Iridesse commercial printer to Federal Marketing under a 60-month rental agreement and separately agreed to service the equipment. Federal’s director, Lim Peng Huat, and his wife, Ng June Fong, jointly and severally guaranteed Federal’s payment and performance obligations.
Federal stopped paying monthly rent from July 2018 and later defaulted on maintenance charges. It contended that performance problems with the printer had led Fujifilm to agree that Federal need pay only usage-based “click charges” until those problems were resolved. Federal also alleged misrepresentation and contractual breaches, sought damages and repayment of rent already paid, and argued that Fujifilm had failed to mitigate its losses by leaving the agreements in force.
The Court’s Holding
The High Court allowed Fujifilm’s claims in full and dismissed the defendants’ counterclaims. Federal failed to prove the alleged new agreement waiving rent; the asserted arrangement also lacked consideration, and the written rental agreement contained a no-oral-modification clause. Although Fujifilm had temporarily refrained from strictly collecting rent, that conduct did not establish a permanent relinquishment of its rights. Any promissory estoppel could only suspend enforcement, and Fujifilm gave reasonable notice before insisting on payment. Waiver by election did not apply because Fujifilm had no inconsistent rights between which to elect.
The mitigation defence also failed because Fujifilm sought accrued contractual debts, not damages for loss, and the mitigation doctrine does not apply to an action for an agreed sum. Fujifilm was entitled to keep the agreements in force while Federal continued using and requesting maintenance of the printer. Federal was ordered to pay S$715,093.01 in rental charges, S$10,754.37 in maintenance charges and S$69,996.51 in late charges; Lim and Ng were jointly and severally liable for those sums under the guarantee. Pre-judgment interest and costs remained for further submissions.
Key Takeaways
- A party alleging an oral or conduct-based contractual variation must prove the agreement and consideration, and must overcome any applicable no-oral-modification clause.
- Temporary forbearance from collecting a debt does not, without more, establish that the creditor permanently waived the debt; suspended rights may be revived on reasonable notice.
- The duty to mitigate generally does not apply to accrued debts or agreed contractual sums, and a creditor may affirm a contract and claim payments as they fall due.
Why It Matters
The decision distinguishes postponing enforcement from forgiving a debt and underscores the evidential and pleading burden facing a party that relies on an informal variation, estoppel or waiver despite written payment obligations.
For equipment lessors and other recurring-payment businesses, the judgment confirms that allowing continued use while withholding immediate enforcement does not necessarily forfeit accrued charges. For customers and guarantors, it highlights the risk of relying on undocumented concessions that do not satisfy contractual modification requirements.