Chuan Hong Auto (Pte) Ltd v Shell Eastern Petroleum (Pte) Ltd

• Jurisdiction: Singapore
• Judge: Goh Joon Seng J
• Judgment Date: 22 January 1996
• Neutral Citation: [1996] SGCA 3
• Docket Number: Civil Appeals Nos 179 and 180 of 1994
• Date: 22 January 1996
• Year: 1996
• Published date: 19 September 2003
• Plaintiff Counsel: Roderick E Martin and Wong Tze Roy (Martin & Pnrs)
• Citation: [1996] SGCA 3
• Defendant Counsel: Sundaresh Menon and Chong Yee Leong (Rajah & Tann)
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether leasehold interest validly acquired,Admissibility of unregistered assignment of lease as evidence of title,Creation of tenancies,s 4 Registration of Deeds Act (Cap 269, 1989 Ed),ss 3(3), 19(11), 19(12), 21(4) & 172(1) Land Titles Act (Cap 157, 1994 Ed),Landlord and Tenant,Whether interest as equitable lessee protected by caveat,Qualified certificate of title issued in respect of land,Creation of tenancy,Assignment of lease

Cur Adv Vult

(delivering the judgment of the court): This dispute relates to the land and premises known as 158 Yio Chu Kang Road (the land) which is used as a `Shell` petrol service station. The respondents, Shell Eastern Petroleum (Pte) Ltd, are the lessee of the land, being the successor-in-title of the original lessee, The Shell Co of Singapore Ltd, under a series of assignments. The appellants, Chuan Hong Auto (Pte) Ltd, are the successor-in-title of the original lessor and are entitled to the reversion.

The facts

The relevant facts that led to the dispute are these. In 1949, one Ong Beh Huat bought the land, and, in the following year, by an indenture of lease dated 23 June 1950, he granted a lease to The Shell Co of Singapore Ltd for a term of 25 years from 1 June 1950. The indenture of lease was duly registered with the Registry of Deeds under the Registration of Deeds Act (RODA). Subsequently, this indenture was superseded by an indenture of lease dated 4 October 1967 (the 1967 lease) whereby Ong Beh Huat granted a lease of the land to Shell Malaysia Ltd for 25 years commencing from 1 May 1968, with an option for renewal of the lease for a further term of 20 years. The terms of the option as contained in cl 3(c) thereof provided as follows:

The landlord for himself and for the persons claiming under him hereby covenants with the company as follows:

...

(c) That the landlord will at the written request of the company made three (3) months before the expiration of the term hereby created and if there shall not at the time of such request be any existing breach or non-observance of any of the covenants on the part of the company hereinbefore contained at the expense of the company grant to the company a lease of the demised premises for the further term of twenty (20) years from the expiration of the said term at the same rent and containing the like covenants conditions and provisos as are herein contained with the exception of the present covenant for renewal.

Ong Beh Huat passed away in 1972, and the reversion was conveyed by Mdm Ang Oo, the widow, to Ong Kang Chwee, the eldest son of Ong Beh Huat, by an indenture dated 15 August 1975. The land was brought under the Land Titles Act (Cap 157) (LTA) and a qualified certificate of title was issued by the Registrar of Titles on 1 March 1976. In 1980, Ong Kang Chwee transferred the land to the appellants, and since then the appellants have been the owners of the reversion.

As provided in s 19(1) of the Land Titles Act (Cap 157, 1985 Ed) (1985 LTA), the qualified certificate of title of the land contained a caution that the land is subject to any interest which affected it at the date of issue of the certificate. Under s 19(2) of the Act, in favour of the appellants, the caution lapsed on the expiry of five years from the date of issue of the qualified certificate of title and the appellants were entitled, after the expiry of five years, to request the Registrar of Titles to notify on the land register the lapsing of the caution. However, no such request was ever made by the appellants to the Registrar at any time.

In the meanwhile, in 1970, Shell Malaysia Ltd by an indenture of assignment dated 26 June 1970 assigned the remainder of the term under the 1967 lease to Shell Eastern Petroleum (Pte) Ltd, the respondents, and on the very next day, the latter by an indenture of assignment dated 27 June 1970 assigned the remainder to Shell Singapore Pte Ltd. These indentures were duly registered with the Registry of Deeds under the RODA. About 22 years later, by an indenture of assignment dated 22 December 1992 (the 1992 assignment), Shell Singapore (Pte) Ltd assigned back to the respondents the remainder of the term under the 1967 lease. Notice of the assignment was duly given to the appellants by a letter dated 4 January 1993. Unfortunately, (for reasons which are irrelevant to these appeals) the respondents did not at all material times register the 1992 assignment with the Registry of Deeds under the RODA. This omission on the part of the respondents has given rise to a serious contention before us, to which we shall revert in a moment. Suffice it here to say that the assignment was registered only in August 1994, after the court below in the course of the hearing raised the issue of inadmissibility of the instrument by reason of s 4 of the RODA.

On 5 January 1993, the respondents exercised the option to renew the lease pursuant to cl 3(c) of the 1967 lease. The respondents notified the appellants by a letter requesting the appellants to grant a lease for a further term of 20 years. The appellants, however, did not respond. On 12 March 1993, the respondents lodged a caveat with the Registry of Titles claiming an interest in the land as an equitable lessee by virtue of having validly exercised the option. As the appellants apparently were not prepared to execute a fresh lease, the respondents on 29 April 1993 commenced proceedings in Originating Summons 383 of 1993 (OS 383) against the appellants seeking a declaration that the 1967 lease is valid and an order for specific performance of the covenant to renew the lease for a further term of 20 years from 1 May 1993. About ten months later, on 23 February 1994, the appellants in turn commenced proceedings against the respondents in Originating Summons 175 of 1994 (OS 175) seeking a determination of the following questions:

(1) whether the lease and dealership agreement which were originally entered into between Ong Beh Huat and Shell Malaysia Ltd on or about 4 October 1967 and now between the appellants and respondents are parts of one single transaction, and

(2) whether the lease and dealership agreement embodying the transaction are an agreement in restraint in trade in that under the terms thereof the appellants can only sell petrol and petrol products manufactured and supplied by the respondents.

In those proceedings, the appellants also sought an order that the lease and dealership agreement be held unenforceable and/or set aside on the ground stated in para (2).

In the meantime, the 1985 LTA was repealed and in its place, a new Land Titles Act (Cap 157, 1994 Ed) (1994 LTA) was enacted which came into force on 1 March 1994.

The decision below

Both OS 383 and OS 175 were heard before Lim Teong Qwee JC. Midway through the hearing in August 1994, the learned judge raised the question whether the 1992 assignment was admissible as evidence of the respondents` title as the lessee of the land by reason of s 4 of RODA, as it had not been registered with the Registry of Deeds under that Act. Following this query the respondents immediately registered the 1992 assignment with the Registry of Deeds.

Before the learned judge, the appellants` defence was that the transactions between the parties or their predecessors-in-title were in unreasonable restraint of trade and that consequently, the lease including the covenant for renewal was not enforceable. The appellants sought to show that the transaction between the parties embodied two essential parts: the first part comprised the lease, and the second part the dealership in Shell products, and that both were parts of one single transaction. On this basis, they argued that as the family livelihood of Ong Beh Huat and his successors was entwined with the land, a term ought to be implied that the dealership would continue for as long as the 1967 lease existed. This defence did not succeed. The learned judge was satisfied that the lease and the dealership agreement were separate agreements. He granted the declaration and the decree of specific performance sought in OS 383, and with reference to OS 175 he determined question (1) in the negative, and accordingly held that question (2) no longer arose. However, he went on to say that in the event that the answer to question (1) was in the affirmative, he held that the answer to question (2) would also be in the affirmative. The learned judge dealt with the question of restraint of trade, although he observed that that was not necessary. In the event, the learned judge found that the doctrine of restraint of trade could apply, preferring the views of Lord Wilberforce to those of the other Law Lords in Esso Petroleum Co Ltd v Harper`s Garage (Stourport) Ltd [1968] AC 269; [1967] 1 All ER 699. However, the learned judge was of the opinion that the restraint in question was reasonable. It is apparent that the learned judge founded his decision on the finding that the 1967 lease was distinct from the dealership agreement, and that the lease and the dealership agreement were not components of one transaction. Accordingly, viewing the transactions in those contexts, the question of restraint of trade did not really arise. [See [1995] 3 SLR 281 .]

The appeal

(1) Evidence on legal interest

Before us, counsel for the appellants pursued three main grounds of appeal. We shall deal with each of them seriatim. Their first ground is that the respondents have failed to adduce admissible evidence to show that they had acquired the legal estate as a lessee of the land under the 1967 lease. The evidence admitted at the trial could not be admitted to establish their title to the legal estate. The basis for this is that, at all material times, the respondents had not registered the 1992 assignment, and by reason of s 4 of the RODA, the 1992 assignment was not admissible in any court as evidence of the respondents` title as the lessee of the land. Section 4 of the RODA, in so far as material, provides:

Subject to this Act and the rules, all assurances ... may be registered in such manner as is hereinafter directed, and unless so registered, shall not be admissible in any Court as evidence of title to such land.

The term `assurance` in s 4 includes an assignment. The option to renew the 1967 lease was exercised on 5 January 1993, and at that date there was no assignment registered...