Land Law

• Author: TEO Keang Sood LLM (Malaya), LLM (Harvard); Advocate and Solicitor (Malaya); Professor, Faculty of Law, National University of Singapore.
• Date: 01 December 2012
• Citation: (2012) 13 SAL Ann Rev 377
• Published date: 01 December 2012

Introduction

20.1 The decided cases in the review period helped to clarify the law in the areas of, inter alia, landlord and tenant, easements, caveatable interests and adverse possession. In the area of conveyancing, the decided cases also dealt with the issues of, inter alia, when the remedy of specific performance is available to the vendor and the obligation to complete a sale in the absence of a date fixed for completion.

Leases

Obligation of landlord in respect of unfurnished demised premises

20.2 In Khew Kim Kee v Sim Jo-Lin[2012] SGHC 235, the premises were let on an unfurnished basis. The defendant (tenant) failed to pay the rent due under the tenancy agreement. Summary judgment was subsequently entered against the defendant for failure to pay rent.

20.3 The defendant appealed, contending, inter alia, that the plaintiff (landlord) owed her a duty to provide premises which were habitable and completely defect free.

20.4 The High Court held (at [23]) that, in the absence of express stipulation, a landlord is generally under no liability to the tenant to put the demised premises (which were let on an unfurnished basis) in repair at the commencement of the tenancy, or to do repairs during the continuation of the tenancy. Similarly, there is generally no implied warranty on the part of the landlord that the demised premises are fit for the purposes for which they are taken.

20.5 In the opinion of the court (at [32]):

… The defendant should have spelt out all her requirements in the agreement so that it contained express duties on the part of the plaintiff to provide what the tenant needed. As no such clauses were included and the responsibility for maintenance was put on the defendant's shoulders, the defendant cannot complain of any breach of the agreement by the plaintiff. …

20.6 As the defendant had not been able to show a triable issue, the appeal was dismissed.

Whether common law action in illegal distress existed

20.7 In Comfort Management Pte Ltd v Afco East Pte Ltd[2012] 4 SLR 66, the defendants had earlier commenced action against Alaskan Ice seeking, inter alia, leave to levy a distress to recover rental due in respect of the demised premises. Leave was granted and the writ of distress was then issued and executed on a piece of ice-making equipment lying in the demised premises. The equipment was subsequently sold.

20.8 The plaintiff commenced the present action against the defendants for, inter alia, wrongful or illegal distress of the equipment. The plaintiff argued that the equipment was wrongly seized and sold because it did not belong to Alaskan Ice but to the plaintiff, information that the defendants knew at the time of the seizure.

20.9 The High Court, in dismissing the plaintiff's claim, held that there was no common law action for wrongful or illegal distress of goods in Singapore. Relying on Ginsin Holdings Pte Ltd v Tan Mui Khoon[1996] 3 SLR(R) 500, the court took the view that the law of distress has been embodied in legislation establishing a judicial process and the common law remedy relating to distress has been abrogated.

20.10 The court reiterated that it has been established law since the case of Chop Chye Hin Chong v Ng Yeok Seng[1934] 1 MLJ 265 that a person aggrieved by a writ of distress obtained through a proper court process cannot sue the applicant for the writ on the basis of the common law cause of action for wrongful or illegal distress. The remedy for such an aggrieved person lies in an action for malicious prosecution.

20.11 While an action for wrongful distress requires no proof of malice, this is otherwise in a case for malicious prosecution. An allegation of malice must be specifically asserted and particulars of such malice must be pleaded and proved. As the plaintiff's pleading indicated an action for wrongful or illegal distress rather than an action for malicious prosecution, the plaintiff had no cause of action. Further, it was too late at this stage for the plaintiff to recast its case and assert that the facts set out in the statement of claim would establish malice.

Option to renew

20.12 In Jurong Town Corp v Dauphin Shipyard Pte Ltd[2012] SGHC 179, the plaintiff applied for summary judgment in respect of the holding over by the defendant of the premises in question after the latter's lease for a term of 30 years had expired. The defendant was in the business of building and repairing ships.

20.13 The defendant argued that the plaintiff was estopped from denying it a renewal of the lease and/or extension of stay on the premises by reason of certain representations made by the plaintiff's employees to the defendant's founders.

20.14 The High Court was of the view that the plaintiff had a prima facie case because it was evident from the face of the Building Agreement that the defendant had not contracted for anything other than a 30-year lease. The defendant accepted that there was nothing written to contradict the fact that the lease did not contain an option to renew, let alone for 30 years. The court found the defendant's conduct to be wholly contradictory to its defence that it had a right or option to renew the lease. For example, the defendant failed to make any mention of an option to renew in the course of the multiple appeals through government ministers and the fact that the option to renew surfaced for the first time in the Show Cause affidavit filed on 18 June 2012.

20.15 The court also noted that (at [30]):

The defendant's eagerness to demonstrate the extent of its investments on the Premises, which it claimed were done in reliance on the representation of a 30+30 lease was misguided and irrelevant. In fact, the plaintiff required all its lessees to invest in and develop their undeveloped lease premises according to their own business needs, even in cases where there is no option to renew the lease. The investments listed by the defendant, such as land improvements, investments into plant and machinery, building office buildings, a workshop and a canteen [were] necessary capital expenditure for the running of a business, even if it is for 30 and not 60 years. [emphasis in original]

20.16 As the defendant failed to convince the court that it had a bona fide defence and that there were issues which required adjudication at trial, summary judgment was entered in favour of the plaintiff.

Rent review mechanism

20.17 One of the issues which arose for consideration in HSBC Institutional Trust Services (Singapore) Ltd v Toshin Development Singapore Pte Ltd[2012] 4 SLR 738 was whether a rent review mechanism contained in a lease agreement entered into between the appellant (landlord) and the respondent (tenant) remained operable notwithstanding a breach of the good faith obligation by the latter.

20.18 The rent review mechanism in question provided that the rent for each new rental term after the first rental term was to be determined by agreement between the appellant and the respondent, or, failing agreement, by ‘three international firms of licensed valuers’ appointed either jointly by the parties or by the President (or another designated officer) of the Singapore Institute of Surveyors and Valuers. Clause 2.4(c) of the lease agreement, which sets out the rent review mechanism, specifically provided that the lessor and lessee shall in good faith endeavour to agree on the prevailing market rental value of the demised premises for the purpose of determining the new annual rent for the relevant rental term.

20.19 Before the commencement date of the next new rental term starting on 8 June 2011, the respondent, without notifying the appellant, unilaterally approached all eight international firms of licensed valuers present in Singapore to prepare valuation reports on the market rental value of the demised premises. The respondent subsequently engaged seven of the firms which agreed to prepare the requested valuation reports. When the appellant discovered what had transpired, it claimed that the rent review mechanism had been rendered inoperable by the respondent's actions and commenced action seeking a declaration to this effect.

20.20 The High Court concluded that the rent review mechanism remained operable and dismissed the appellant's application. The appellant appealed.

20.21 In dismissing the appeal, the Court of Appeal was of the view that, while there was, at the onset of the parties' negotiations, a breach of this obligation by the respondent, since all the valuations were eventually disclosed by the respondent before the negotiations were completed or an agreement reached, the respondent's initial breach was remedied and the parties ought to have resumed their endeavours to ‘in good faith … agree’ on the new rent for the last rental term. By disclosing all the valuations, the respondent was signalling that it had nothing to hide and was prepared to negotiate the new rent in good faith.

20.22 The court noted that an unremedied breach of the duty to ‘in good faith endeavour to agree’ on the new rent would only make the rent review exercise voidable and the new rent thus agreed on would not bind the appellant because the respondent would not have negotiated in good faith. The court acknowledged that the rent review mechanism can also be rendered inoperable...