Land Law
| Citation | (2007) 8 SAL Ann Rev 329 |
| Author | TEO Keang Sood LLM (Malaya), LLM (Harvard); Advocate and Solicitor (Malaya); Professor, Faculty of Law, National University of Singapore. |
| Published date | 01 December 2007 |
| Date | 01 December 2007 |
18.1 As in previous years, a number of important cases were decided in the year under review. These decisions clarified the law pertaining to compensation payable for wrongful refusal to withdraw caveats lodged against land and the treatment of moneys withdrawn from the Central Provident Fund to finance the purchase of strata-titled properties where there is a collective sale of the strata development.
18.2 It is trite law that equity prefers a tenancy in common in cases where two or more persons contribute money in unequal proportions towards the purchase of property. It is in this context that the relationship between the right of survivorship in a joint tenancy and a resulting trust was considered in Yeo Guan Chye Terence v Lau Siew Kim[2007] 2 SLR 1. More specifically, the issue in this regard was whether a resulting trust overrides the right of survivorship in a joint tenancy.
18.3 Lai Siu Chiu J found on the evidence that there was a resulting trust over the properties in question in the proportions of the financial contributions of the defendant and the deceased. The properties were held by the parties as joint tenants. The deceased was the father of the plaintiffs and the defendant their stepmother. The plaintiffs had argued for a resulting trust over the properties while the defendant submitted, inter alia, that the right of survivorship in a joint tenancy entitled her to claim the entire legal interest in the properties.
18.4 Although the deceased and the defendant remained joint tenants at law, but given that they each contributed money in unequal proportions in the purchase of the properties, they were, thus, tenants in common in equity according to the proportion of their respective financial contributions. In the result, the resulting trust had the effect of overriding the right of survivorship in the joint tenancies of the properties concerned and the defendant was not entitled to claim the entire legal interest therein.
18.5 In Chiam Heng Luan v Chiam Heng Hsien[2007] 4 SLR 305, the High Court had to decide, inter alia, whether the relationship that existed between the co-owners of the property in question and the partnership (‘MHP’), the eighth defendant, which operated a hotel thereon was that of landlord and tenant or that of a contractual licence. The plaintiffs, as co-owners, had argued that the relationship was one of landlord and tenant and that the tenancy in favour of MHP, which took over from the original partnership, to run the hotel business had been terminated either by notice or by breach of the tenancy agreement. The first and second plaintiffs, who owned a 40% share in the property, sought, inter alia, a declaration that the lease of their interest in the property to MHP had been validly terminated pursuant to a notice to quit. Notices to quit had also been served by the other plaintiffs on MHP. The first defendant, a co-owner of the property and the managing director of MHP, contended that MHP had a right to continue in occupation of the property, notwithstanding the repeal of the Control of Rent Act (Cap 58, 1985 Rev Ed) in April 2001, as there was an agreement or understanding between the co-owners and the partners for MHP to occupy the property for its business for as long as it wished to. This took the form of a contractual or equitable licence granting MHP such a right to occupy. Alternatively, there was an equity in favour of MHP which had to be satisfied by an award of compensation. The remaining defendants, who were also co-owners, argued, with the exception of the fifth defendant who did not take a stand on the first defendant”s assertions, that MHP had no such right to occupy the property whether by virtue of an agreement or by virtue of its conduct over the years. The second to the fourth defendants also submitted that the notice period of three months given by the various co-owners was a reasonable period of notice to terminate the tenancy. The sixth and seventh defendants were prepared to waive the alleged defects in the notices to quit if fair compensation was paid to MHP.
18.6 In granting the declaration sought, Judith Prakash J, having regard to Pocock v Carter[1912] 1 Ch 663, found that the relationship between the co-owners and MHP was that of landlord and tenant and that the intention of the parties was that the term of the tenancy, first to the original partnership and subsequently to MHP, was to be for so long as the hotel business was carried on at the property. There was no other type of relationship existing between the parties in addition to the landlord and tenant relationship. Any contractual licence that may have been given to the original partnership would have terminated when that partnership dissolved. Being a personal right, the contractual licence could not have been passed on to MHP.
18.7 Her Honour distinguished on the facts the cases of Hardwick v Johnson[1978] 2 All ER 935; Tanner v Tanner[1975] 3 All ER 776; Binions v Evans[1972] Ch 359 and Tan Hin Leong v Lee Teck Im[2000] 3 SLR 85 (HC), [2001] 2 SLR 27 (CA). As her Honour explained (at [64]):
In the present case, the Property was occupied as a place of business and not as a personal residence. Whilst the co-owners and the partners were related to each other, the conferring of the tenancy on the partners did not result from a desire to provide a home for a vulnerable family member. The parties did not act out of love and affection but out of a desire to carry on business together and achieve a profitable situation for all. Theirs was a commercial relationship although they may have been motivated to go into business with each other by reason of their familial ties. The parties considered what sort of relationship they should have and they chose the relationship of landlord and tenant. … Throughout all the years that the original partnership, and then MHP, occupied the Property, all parties regarded the occupants as tenants. … There was even a court battle over the beneficial ownership of the tenancy… There can be no dispute therefore about the primary relationship between MHP and the co-owners.
18.8 Given that, on the authority of Prudential Assurance Co Ltd v London Residuary Body[1992] 2 AC 386, there must be certainty as to the length of a lease, the tenancy in the instant case was void as a fixed-term lease, being intended to be for as long as the original partnership or MHP carried on the hotel business. However, a periodic tenancy came into existence if the tenant, nevertheless, entered into possession and paid rent. In the instant case, as rent was paid to the co-owners either on a quarterly or monthly basis, they would be able to terminate the lease of their interest to MHP by giving the latter, at the longest, a quarter”s notice. Even if a contractual licence existed, MHP”s right to continue in occupation would have come to an end in December 2002 when it lost the hotel licence or, at the latest, in December 2003, when it lost the liquor licence.
18.9 In regard to proprietary or equitable estoppel, an equity had been raised, on the facts, in favour of MHP. The elements of representation, reliance and detriment had been established. However, the co-owners were no longer estopped from terminating the tenancy as the equity was fully satisfied given that MHP had the enjoyment of the property at a low rent for over 50 years and had continued to operate a profitable business on it. In light of the fact that MHP could no longer rely on the equity in view of the cessation of its business; equally the co-owners could no longer rely on MHP to bear all the expenses of maintaining the property and to pay a portion of the property tax after the hotel licence was lost and each co-owner was, accordingly, ordered
to pay MHP his or her proportionate share of the said expenses and tax payments.
18.10 As for the notices to quit served by the various parties who owned 80% of the shares in the property, they were effective to terminate the respective interests in the property. The objection that the notices to quit were not served on the sixth and seventh defendants as legal lessees holding the tenancy in trust for MHP had no merit. They were merely bare trustees of the tenancy for MHP which not only acted as the tenant but claimed rights as the tenant and dealt with others as the tenant. On the authority of Jones v Phipps(1868) LR 3 QB 567; Hubbard v Highton[1923] 1 Ch 130 and Townsends Carriers Ltd v Pfizer Ltd(1977) 242 EG 813, where trustees have allowed the beneficial tenants or owners to deal directly with the landlord or tenant, as the case may be, the trustees cannot object to the validity of the notices given to the beneficiary.
18.11 In the circumstances, the property was ordered to be sold with vacant possession. From the proceeds of sale, each co-owner was to refund MHP his or her proportionate share of the expenses and tax payments incurred by MHP mentioned in para 18.9 above.
18.12 In Management Corp of Grange Heights...
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