Abdul Jalil bin Ahmad bin Talib and Others v A Formation Construction Pte Ltd

JurisdictionSingapore
JudgeJudith Prakash J
Judgment Date26 September 2006
Neutral Citation[2006] SGHC 171
Date26 September 2006
Subject MatterWill constituting trust stipulating trust to be managed by two trustees at all times,Defendant giving up any right to make claim against trustees for damages for breach of terms in lease agreement by accepting compromise offered,Formation,Defendant discharging obligations under compromise agreement,Contract,Estoppel,Sole trustee having power to carry on all necessary business of trust only until new trustees appointed,Whether sole trustee having power to authorise compromise agreement regarding rental arrears of such immovable properties,Capacity of parties,Whether such forbearance amounting to consideration for compromise agreement,Forbearance,Equity,Whether inequitable for plaintiffs to refuse to honour compromise agreement on ground that such agreement not lawfully entered into,Consideration,Whether sole trustee's solicitors having ostensible authority to effect compromise agreement,Business of trust to manage immoveable properties
Docket NumberSuit No 892 of 2004
Published date02 October 2006
Defendant CounselAnthony Netto and Michael Yap (Teo Keng Siang & Partners)
CourtHigh Court (Singapore)
Plaintiff CounselAloysius Leng (Abrahamlow LLC)

26 September 2006

Judgment reserved.

Judith Prakash J:

The claim

1 The plaintiffs in this action are the present trustees of the trust (“the trust”) established under the last will of Shaik Roubayak bin Khalid bin Talib alias Shaikh Roubayak bin Khalid bin Talip alias Shaik Roubayak bin Khalid bin Ghalib bin Thalib alias Shaikh Rubiye bin Khalid bin Ghalib bin Thalib (“the testator”), who died in 1934. The trust is the owner of the premises at 29 and 30 Purvis Street (“the Purvis property”) and at 21 Amoy Street (“the Amoy property”). By this action, the plaintiffs seek to recover arrears of rental and other amounts due under the leases of the aforesaid premises from the defendant, A Formation Construction Pte Ltd, the lessee of the same. The complication in the case is that in February 2002, the then trustee of the trust purported to waive the payment of the amounts that the plaintiffs now claim.

2 In December 1996, the trustees of the trust were one Awad bin Omar Harharah (“Mr Awad”) and his younger brother, Shaik Mohamad bin Omar Harharah (“Mr Mohamad”). On 9 December 1996, the trust entered into two lease agreements with the defendant. The first lease agreement was in respect of the Purvis property which was leased to the defendant for a period of 25 years commencing 24 months from the date of the lease agreement or on the date of commencement of business by the defendant at the Purvis property, whichever was earlier, at a monthly rental of $10,000. Under the second agreement, the Amoy property was leased to the defendant for a period of 20 years commencing 24 months from the date of the agreement or on the date of commencement of business by the defendant at the Amoy property, whichever was the earlier, at a monthly rental of $3,000. Each lease also provided for interest to be payable in the event that the rent accruing was paid late.

3 The plaintiffs’ claim in this action is for various amounts comprising both rental and interest on late payment. The sum of $127,419.35 is claimed as unpaid rental for the Purvis property for the period from 9 December 1998 to 31 December 1999. Further sums totalling $154,554.83 are claimed as accrued interest due on late payment of rental for both the Purvis property and Amoy property between 9 December 1998 and 31 October 2004. Additionally, the plaintiffs ask for interest at 12% per annum on the sum of $127,419.35 to be awarded to them from 1 November 2004 to the date of payment.

Background

4 At the time of the leases, the properties were occupied by statutorily-protected tenants. The properties were run-down and dilapidated. It was envisaged that the trust would recover vacant possession of the properties from the tenants and that, thereafter, the defendant would redevelop them into modern buildings before commencing business therein. In the event, it took longer than expected to evict the tenants from the properties and because of this, the redevelopment work and, consequently, the occupation of the properties for business purposes was delayed. Thus, by 9 December 1998, the date falling 24 months after the grant of each lease, neither of the properties was ready for occupation.

5 The plaintiffs’ claim was based on the position that rental under the leases commenced on 9 December 1998 and was payable in advance on the first day of each calendar month. The defendant did not, however, commence paying the rental for either the Amoy property or the Purvis property on 9 December 1998.

6 In August 1999, the trust acting through its then solicitors, M/s Mallal & Namazie (“M&N”), reminded the defendant via two letters to the defendant’s then solicitors, M/s Cheong Hoh & Associates (“CHA”), that the leases of the properties had commenced on 9 December 1998 and that the rental on the same payable from that date was still outstanding. In respect of the Amoy property, the trust asked for payment of $25,600.76 being the net rental (the gross rental due under the lease less the amounts recovered from the statutory tenant of the property) due for the period from 9 December 1998 to 31 August 1999. In respect of the Purvis property, the trust asked for payment of $85,111.49 being the net rental payable for that property for the same period. These requests for payment remained unsatisfied.

7 The next development was on 21 June 2000 when CHA wrote to M&N stating that it had been instructed by the defendant to seek the trust’s indulgence to waive the rental payable in respect of both the Amoy and the Purvis properties until the temporary occupation permits (“TOP”) for the respective premises had been obtained. On 25 July 2000, M&N replied to this letter and stated that the trust would “only consider [the defendant’s] request for [a] waiver of the outstanding rental or at least some part of same after restoration of the above properties commences and [the defendant has] settled [M&N’s] outstanding bills”. No payment of rental was made thereafter but the trust did not make any further demand for the same until early 2002.

8 Meanwhile, in May 2001, M/s Teo Keng Siang & Co (“TKS”) who had taken over from CHA as solicitors for the defendant in respect of the leases, wrote to M&N asking for a meeting with the sole trustee to discuss the rental matter. Specific reference was made to the letter of 25 July 2000 and M&N was informed that the defendant had paid out a huge sum of money in respect of the properties and yet up to that date it had not been able to obtain the TOP to commence business. A further letter was sent on 23 June 2001 in which TKS reiterated the request for a meeting to discuss the rental question and a change of the commencement date for the rental. In that letter, it was alleged that the TOP for the properties had yet to be issued due to the delay of the trustees. Forwarded with that letter were various documents for signature by the trustee. M&N responded shortly thereafter to state that the trustee had to consult with the beneficiaries of the trust and that had caused some delay. They denied, however, that any delay was due to the death of Mr Awad and stated that they were disturbed by the stand taken by the defendant. They reserved their clients’ rights against the defendant. As for the request for a waiver of rental, the same would only be considered after evidence was given that material work had been commenced on the Purvis property. That letter did not contain any demand for payment of rental.

9 It was only on 17 January 2002, that M&N wrote to TKS making such a demand. Their letter stated that in respect of the Amoy property, the sum of $113,374.95 was outstanding as rental for the period from 9 December 1998 to 8 February 2002 and that in respect of the Purvis property the outstanding rental for the same period was $377,692.13. TKS was asked to arrange for payment of the total sum of $491,067.08 immediately failing which they should arrange for the defendant to deliver up vacant possession of the properties without prejudice to the trust’s rights to institute recovery proceedings against the defendant and its guarantors.

10 TKS responded on 22 January 2002 to say that in June 2001, the defendant had proposed that the commencement date for the rental should be the date that vacant possession was given to it. The defendant had spent a considerable amount for legal costs, compensation moneys and professional fees and upgrading works. Further, the agreement to pay rent had been based on the assurance that the tenant’s compensation issue would be speedily resolved. Vacant possession of the properties had, however, only been delivered on 9 September 2000. Further, the trust had agreed to use its best endeavours so that the defendant could obtain TOP. The defendant had been delayed by circumstances such as the death of one trustee and the departure abroad by the surviving trustee thus leading to difficulties in the defendant obtaining the signatures of the then trustees for applications that needed to be submitted to the relevant governmental authorities. TKS pointed out that the defendant intended to fulfil its part of the bargain and wanted to pay reasonable dues and move on with the upgrading of the premises. It asked that a joint meeting be arranged to discuss the defendant’s request that rental should be charged from the date of vacant possession or some other compromise date that would enable the parties to maintain their good relationship.

11 On 28 January 2002, M&N replied to say that their client was not able to agree to rental commencing from the date of vacant possession. The letter also rejected the allegations that there had been delay caused by the death of the co-trustee or by any other matters for which the trustees were responsible. In contrast to the foregoing uncompromising stand, however, three days later, M&N sent out a letter marked “WITHOUT PREJUDICE” in which they stated that as a compromise, their client was prepared to waive rental for the period up to 31 December 1999 subject to all rental from 1 January 2000 to the date of that letter being paid within seven days of such date, time being of the essence. By its reply dated 6 February 2002, TKS stated that as TOP had been obtained for the Amoy property the defendant was willing to pay rental for that property from 1 January 2000 onwards. As for the Purvis property, the defendant needed to inject more than $1m in the next months to obtain TOP and therefore required that rental for that property for the period commencing on 1 January 2000 be paid only at the end of 2002 or on TOP, whichever was the later. TKS stated that if this offer was accepted by the trust, the defendant would pay the rental for the Amoy property within seven days of confirmation.

12 The trust did not find the offer acceptable. On 8 February 2002, M&N sent out notices to quit directly to the defendant in respect of each of the properties. The notices stated that as the defendant had failed to make payment...

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6 cases
  • Lam Chi Kin David v Deutsche Bank AG
    • Singapore
    • High Court (Singapore)
    • 10 Febrero 2010
    ...Limited, 30th Ed, 2008), para 3−094 cited with approval in Abdul Jalil bin Ahmad bin Talib and Others v A Formation Construction Pte Ltd [2006] 4 SLR 778 at [43] and [44] (“Abdul Jalil”). In Abdul Jalil, Prakash J held: As for the third element, there has been some discussion as to whether ......
  • Lam Chi Kin David v Deutsche Bank AG
    • Singapore
    • High Court (Singapore)
    • 10 Febrero 2010
    ...Limited, 30th Ed, 2008), para 3−094 cited with approval in Abdul Jalil bin Ahmad bin Talib and Others v A Formation Construction Pte Ltd [2006] 4 SLR 778 at [43] and [44] (“Abdul Jalil”). In Abdul Jalil, Prakash J held: As for the third element, there has been some discussion as to whether ......
  • Jaya Sudhir a/l Jayaram v Tong Seak Kan and another
    • Singapore
    • High Court (Singapore)
    • 27 Septiembre 2016
    ...1 SLR 800 (“Lam Chi Kin”) and the High Court decision of Abdul Jalil bin Ahmad bin Talib and others v A Formation Construction Pte Ltd [2006] 4 SLR(R) 778 (“Abdul Jalil (HC)”) (affirmed, but without consideration of this point, by the Court of Appeal in Abdul Jalil bin Ahmad bin Talib and o......
  • Wee Peng Huay v Wong Shee Ying @ Leslie Wong Sze Ying
    • Singapore
    • District Court (Singapore)
    • 29 Agosto 2023
    ...constitute sufficient consideration, the High Court in Abdul Jalil bin Ahmad bin Talib and others v A Formation Construction Pte Ltd [2006] 4 SLR(R) 778 at [42] held that the compromise of a claim which was doubtful or clearly invalid in law was binding as a contract, so long as it was a re......
  • Request a trial to view additional results
4 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2015, December 2015
    • 1 Diciembre 2015
    ...he has a fair chance of success (Lim Beng Cheng at [58], citing Abdul Jalil bin Ahmad bin Talib v A Formation Construction Pte Ltd[2006] 4 SLR(R) 778 (‘Abdul Jalil’) at [42]). The learned judge considered that this principle applied to the plaintiff's promise to withdraw the caveat. On the ......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2007, December 2007
    • 1 Diciembre 2007
    ...Rev 171 at 173—174, we noted at paras 10.7—10.8 that in the case of Abdul Jalil bin Ahmad bin Talib v A Formation Construction Pte Ltd[2006] 4 SLR 778, Judith Prakash J had endorsed the view that it was unnecessary for a party relying on the doctrine of promissory estoppel to establish that......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2006, December 2006
    • 1 Diciembre 2006
    ...unsupported by consideration and hence unenforceable also failed in Abdul Jalil bin Ahmad bin Talib v A Formation Construction Pte Ltd[2006] 4 SLR 778. Judith Prakash J found that the defendant in this case had furnished consideration when, pursuant to the compromise agreement, it gave up i......
  • Equity and Trusts
    • Singapore
    • Singapore Academy of Law Annual Review No. 2006, December 2006
    • 1 Diciembre 2006
    ...not regard the document as revocable at the time of execution. 13.2 Abdul Jalil bin Ahmad bin Talib v A Formation Construction Pte Ltd [2006] 4 SLR 778 is a case where the extent of the powers of a sole trustee was considered by the court. Clause 19 of the will of the testator which constit......

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