Land Law

• Published date: 01 December 2010
• Date: 01 December 2010
• Author: TEO Keang Sood LLM (Malaya), LLM (Harvard); Advocate and Solicitor (Malaya); Professor, Faculty of Law, National University of Singapore.

Introduction

19.1 Cases decided in the period under review dealt with a host of issues. The decisions further clarified the law on matters pertaining to, inter alia, the exceptions to indefeasibility of title/interests and the power of the High Court to sever a joint tenancy under the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (‘SCJA’). The position of joint tenants in a collective sale was also considered.

Indefeasibility of title

Exceptions to indefeasibility

19.2 In Loo Chay Sit v Estate of Loo Chay Loo, deceased [2010] 1 SLR 286 (‘Loo Chay Sit’), the appellant claimed to have paid for the property in question which was registered in the name of Loo Chay Loo. The latter passed away a month or so after the appellant filed a suit against him. The appellant claimed that Loo Chay Loo and, after his death, the respondent held the property on a resulting trust for him. The High Court found in favour of the respondent and the appellant appealed.

19.3 The Court of Appeal held that the respondent enjoyed the presumption of indefeasibility of title under s 46 of the Land Titles Act (Cap 157, 2004 Rev Ed) (‘LTA’) given that Loo Chay Loo was the registered proprietor of the property. To rebut this presumption, the appellant had to prove that he had paid for the property so as to rely on the doctrine of resulting trust as an exception to indefeasibility. As the Court of Appeal explained (Loo Chay Sit at [14] and [15]):

On the part of the appellant, in order to impugn Loo Chay Loo“s title so as to fend off the counterclaim, the appellant has to prove the exceptional circumstances in the LTA, as a result of which the presumption of indefeasibility of title is displaced. In so far as the appellant relies on the doctrine of resulting trusts as one such exception, he has to prove that he had paid for the property so as to establish a resulting trust in his favour …

… At the expense of repetition, it is of the first importance to emphasise that if the appellant can prove, on a balance of probabilities, that he had in fact paid for the Property, then the appeal must succeed …

19.4 In the circumstances, the appellant failed to discharge the burden placed on him and the appeal was dismissed.

19.5 It is interesting to note that the doctrine of resulting trust, as seen from the judgment above, is now recognised as an exception to indefeasibility, presumably in the statutory provision of s 46(2)(c) of the LTA. This has certainly further clarified the scope of this provision. The earlier Court of Appeal case of United Overseas Bank Ltd v Bebe bte Mohammad [2006] 4 SLR(R) 884 (‘Bebe’), in its quest for certainty of title so as to ensure consistency with the policy of the LTA, appeared to have restricted the scope of s 46(2)(c) to express trust in its review and reconsideration of the Court of Appeal decision in Ho Kon Kim v Lim Gek Kim Betsy [2001] 4 SLR 340 which applied the personal equity giving rise to a constructive trust and which Bebe disapproved of. Given that this is the position, it is unlikely that the recognition of resulting trust as a statutory exception to indefeasibility will rekindle the debate as to whether s 46(2)(c) should similarly have room for the recognition of constructive trust as an exception, although this cannot be ruled out completely as Bebe made it clear (Bebe at [91]) that Singapore courts should be slow to engraft onto the LTA personal equities that do not come within the exceptions in s 46(2), not that their application is wholly unacceptable in appropriate cases.

19.6 In Tay Jui Chuan v Koh Joo Ann [2010] 4 SLR 1069, Tay transferred a strata unit (the property) to Koh as a gift. The latter had worked for Tay, his uncle, for 28 years. The transfer was registered. Later, Tay had a falling out with Koh and asked for the return of the property. A caveat was lodged against the property by A Pte Ltd, a company controlled by Tay, on the ground that Koh held the property on trust for Tay and that the legal title to the property was to be transferred by Koh upon demand. Koh commenced legal proceedings seeking, inter alia, the removal of the caveat and a declaration that he is the beneficial owner of the property. Upon dismissal of his claim by the High Court, Koh appealed.

19.7 The Court of Appeal held that the High Court“s finding that Koh was holding the property on trust for Tay was contrary to the evidence before the court. Koh“s uncontradicted evidence was that Tay had told him that the property was a gift to him, the property was later registered in his name and that until A Pte Ltd lodged the caveat against the property, no one had claimed a beneficial title to the property or

that it was not a gift to him. On the pleadings, Tay had never claimed a trust in his favour.

19.8 The High Court was also wrong in approaching the case on the basis that Koh had the burden to prove that the property was not a gift to him. The Court of Appeal was of the view that Koh had no burden to prove that he is the beneficial owner. As he is the registered owner of the property, he has a good title against the whole world until it is proved otherwise. Koh has indefeasible title to the property by virtue of s 46(1) of the LTA (above, para 19.3), subject only to overriding interests referred to therein and the claims set out in s 46(2) thereof. As Tay and A Pte Ltd were not able to make a coherent claim to the property, the appeal of Koh was allowed.

Leases

19.9 In Pontiac Land Pte Ltd v P-Zone Services Pte Ltd [2010] 4 SLR 111 (‘Pontiac Land’), issues pertaining to the validity of the leases entered into and their binding effect on the defendant were considered by the High Court.

19.10 The plaintiff sold to X Co its interest in car park levels 1 to 7 (‘the property’) as well as two units in a shopping mall which it had co-developed. At the same time, the plaintiff also wanted to retain its interest in a 300 sq ft space at level 5 of the car park (the premises) for the remainder of the leasehold of the land occupied by the shopping mall, which amounted to some 75 years. To achieve this, 11 consecutive tenancy agreements, ten of which were for a duration of seven years less one day, and the 11th for a duration of five years, were executed in favour of the plaintiff. These agreements were separated by a break of one day. Under the agreements, the plaintiff would pay an annual rent of $1.00 for the premises, which was payable in advance on the first day of each year. X Co later sold the property to Y Co subject to the tenancy agreements. Y Co, in turn, sold the property to the defendant, subject to all existing tenancies although there was no specific mention of the said tenancy agreements and/or the plaintiff in the sale and purchase agreement. One Liew was a director and majority shareholder of both Y Co and the defendant. When the plaintiff sought to tender payment of rent to Y Co for the entire 75 years, the latter stated that the plaintiff had breached the tenancy agreements by failing to pay rent in advance and gave written notice that the tenancy agreements were terminated. The plaintiff similarly tendered payment of rent to the defendant upon being informed that the latter had purchased the property from Y Co. The defendant rejected the payment of rent on the basis that it had no knowledge of the plaintiff “s interest and had therefore purchased the property free of encumbrances. The plaintiff commenced proceedings

against the defendant for, inter alia, a declaration that the tenancy agreements were binding on the latter. The defendant counterclaimed for, inter alia, a declaration that the tenancy agreements were illegal and void at law and an alternative declaration that they were lawfully terminated pursuant to an earlier termination letter.

19.11 On the evidence, the High Court held that no termination letter had been served on the plaintiff. Further, the defendant had notice of the tenancy agreements when it purchased the property from Y Co. This was because Liew was a director and majority shareholder of both Y Co and the defendant and was involved in the management of Y Co. The sale and purchase agreement between Y Co and the defendant was signed by Liew on behalf of the defendant and Liew“s stepson on behalf of Y Co. This showed they were both in charge of both companies.

19.12 The High Court rejected the defendant“s contention that the tenancy agreements were illegal and void, being contrary to public policy, as they contravened s 53(1) of the Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) (‘CLPA’) and s 12(3) of the Planning Act (Cap 232, 1998 Rev Ed). The High Court explained thus (Pontiac Land at [14]-[15]):

In so far as s 53(1) of the CLPA is concerned, I am unable to agree with the defendant“s submission, which essentially flowed from the characterisation of the 11 TAs as “de facto and de jure“ a 75-year lease. In my view, such characterisation is misleading. It might be possible to say that the 11 TAs amount to a “de facto lease“ for 75 years, but this is merely a label; they are what they are, viz, 11 tenancies separated by a one-day gap between the expiry of one TA and the commencement of the next. There is no provision of law that prohibits this. As for the label, “de jure lease“, it is not clear what the defendant meant by it. This is because it is anything but a 75-year lease at law (which is what “de jure lease“ must mean) as s 53(1) of the CLPA provides that “[a] conveyance of any estate or interest in land other than a lease for a period not exceeding 7 years at a rack rent shall be void at law unless it is by deed in the English language“. Therefore any argument that the 11 TAs amount to a lease at law for 75 years would be countered by the fact that there is no deed executed and in any event, any such lease, not being in compliance with s 53(1) of the CLPA, would be rendered void by that provision.

As for s 12(3) of the Planning...