Cupid Jewels Pte Ltd v Orchard Central Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 13 January 2014
• Date: 13 January 2014
• Docket Number: Civil Appeals Nos 32 and 33 of 2013
• Court: Court of Appeal (Singapore)

Cupid Jewels Pte Ltd

Plaintiff

and

Orchard Central Pte Ltd and another appeal

Defendant

[2014] SGCA 2

Sundaresh Menon CJ

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeals Nos 32 and 33 of 2013

Court of Appeal

Civil Procedure—Ex parte applications—Duty of full and frank disclosure—Extent of duty of disclosure—Applicability to distress applications

Equity—Estoppel—Promissory estoppel—Landlord entering into negotiations with tenant for rental rebate and payment of rental arrears—Whether landlord was estopped from asserting its legal remedy to apply for writ of distress

Landlord and Tenant—Distress for rent—Landlord seizing jewellery found on premises of tenant pursuant to writ of distress—Whether writ of distress could be set aside on grounds of material non-disclosure—Whether writ of distress was regularly issued

Landlord and Tenant—Distress for rent—Origins and nature of writ of distress—Extent of judicial discretion—Differences between distress applications in England and Singapore

Landlord and Tenant—Distress for rent—Whether tenant could seek release of jewellery on ground of jewellery being statutorily exempted from seizure—Whether third party could seek release of jewellery on grounds that it was beneficial owner of jewellery and tenant was not reputed owner of jewellery—Sections 5 (1), 8 (d), 10 and 12 (a) Distress Act (Cap 84, 1996 Rev Ed)

Statutory Interpretation—Section 9 A (1) Interpretation Act (Cap 1, 2002 Rev Ed) —Purposive approach trumped ejusdem generis canon of construction

The tenant leased two units from the landlord to carry out the business of jewellery retailing. The tenant was unable to pay rent for the premises and entered into negotiations with the landlord for a rental rebate and for the payment of the rental arrears in instalments. The landlord subsequently obtained a writ of distress (‘the Writ of Distress’) and seized all the goods on the premises, including jewellery (‘the Distrained Jewellery’). The tenant brought an application for the release of the Distrained Jewellery pursuant to s 16 of the Distress Act (Cap 84, 1996 Rev Ed) (‘the Act’) read with s 8 (d) of the same. A third party claiming to be the beneficial owner of the Distrained Jewellery, brought a separate application under s 10 of the Act read with s 12 of the same, seeking the release of the Distrained Jewellery to its custody. Both applications were dismissed. The tenant and the third party respectively appealed.

Held, dismissing the appeals:

(1) The landlord's duty to disclose facts beyond those required in Form 198 of Appendix A to the Rules of Court (Cap 322, R 5, 2006 Rev Ed) in an ex parte application for a writ of distress extended only to any crystallised dispute between the parties as to whether the landlord's right to distress had in fact arisen. This struck a balance between ensuring adequate protection for tenants on the one hand, while on the other hand ensuring that the costs of such a straightforward application founded upon the landlord's prima facie right in land would not be unduly increased by the onerous duty of full and frank disclosure necessary in other ex parte applications: at [29] .

(2) The landlord's right to rent due and payable, and its consequent right to distress, were not known by it to be disputed when it made its application for distress. There was therefore no duty on the part of the landlord to give any narrative of the negotiations to the assistant registrar during its application: at [30] .

(3) The rent in issue in the Writ of Distress was due and payable, and the period in question for which rent was claimed did not exceed 12 months. There were therefore no irregularities in the Writ of Distress so as to render it void or invalid: at [32] and [33] .

(4) Whether or not an estoppel could be applied depended on whether allowing it would act in the face of a statute and to effectively allow a state of affairs which the law has positively declared not to subsist. That the Act conferred on landlords a special status by way of the special remedy of distress did not necessarily mean that recognising an estoppel would be in defiance of the Act. A promissory estoppel could therefore in principle arise to bar a statutorily conferred right: at [37] and [38] .

(5) While the parties were certainly negotiating over the rental rebates and repayment arrangements, there was nothing in the correspondence between the parties that evinced a representation that was sufficiently of the character necessary to invoke the equitable doctrine of promissory estoppel. There was no clear and unequivocal representation by the landlord that it would not enforce its legal rights: at [39] .

(6) The non-waiver clause in the lease agreement evinced an agreement that any form of indulgence granted by the landlord in respect of any breach of the lease agreement by the tenant would not prejudice the landlord's rights to take action against the tenant. There was no evidence that this agreement was intended to be departed from: at [40] .

(7) Ultimately, that the tenant was under a false sense of security arising from the landlord's initial forbearance and that the tenant conducted itself according to that self-perceived assurance did not detract from the fact that no representation giving rise to a promissory estoppel was ever made: at [41] .

(8) The fundamental principle of purposive interpretation under s 9 A (1) of the Interpretation Act (Cap 1, 2002 Rev Ed) and the principle that Parliament would not have removed rights pre-existing in common law if there was no express provision or clearly evinced intention to the effect had to trump the linguistic ejusdem generis canon of construction. Unsatisfying and archaic as the common law trade privilege perhaps was, s 8 (d) of the 1934 Ordinance was intended to be a codification of it in the state it was in at the material time. The 1934 Ordinance was not intended to narrow the scope of the privilege: at [68] .

(9) The phrase ‘or otherwise dealt with’ in s 8 (d) of the Act which provided that ‘Property seizable under a writ of distress shall not include ... (d) goods in the possession of the tenant for the purpose of being carried, wrought, worked up, or otherwise dealt with in the course of his ordinary trade or business’ should be interpreted in the same way as the word ‘manage’ in the common law formulation of the trade privilege: at [70] .

(10) The feature common to factors, brokers and commission agents who are afforded privilege under the ‘managed’ limb of the common law trade privilege was that of an agency relationship: at [71] .

(11) It was obvious that the tenant was not an agent of the third party in the true sense of the word. In particular, the tenant did not sell the third party's goods upon commission. The financial arrangement between the parties was such that the tenant could set the price of the jewellery at its sole discretion. It only had to account to the third party for the cost price. Other than that, the tenant was entitled to retain any profits and had to bear the losses if any. There was no commission involved. Since the tenant did not fall within the ambit of the common law privilege, its reliance on s 8 (d) of the Act failed: at [73] and [74] .

(12) The doctrine of reputed ownership should not, as a matter of principle, exclude that of actual knowledge: at [79] .

(13) The third party's case on actual knowledge was misconceived. The mere awareness that the tenant would be supported by the third part in stocks and finance was simply insufficient to found actual knowledge on the part of the landlord that the Distrained Jewellery was not owned by the tenant: at [80] .

(14) The appropriate perspective to adopt of the reputed owner within the meaning of s 12 (a) of the Act, was that of the landlord. The doctrine of reputed ownership in the context of distress was intended to allow a landlord to recover the full value of the goods found on the tenant's premises when the true owner of the goods had unconscientiously permitted or consented to a state of things from which he had to have known, if he had considered the matter, that the inference of ownership by the tenant had to arise. That having been said, the distinction in the possible approaches was a theoretical one without much significance in the practical sphere of application: at [81] and [82] .

(15) It was the third party, and not the landlord, that bore the burden of proving that the Distrained Jewellery was not reputedly owned by the tenant: at [87] .

(16) The evidence was insufficient to establish that a consignment arrangement between jewellers and their suppliers was an industry-wide practice that it would have been immediately apparent to any reasonably informed landlord. The third party failed to prove that the tenant was the reputed owner of the Distrained Jewellery and hence could not rely on s 10 of the Act: at [88] and [89] .

[Observation: In any event, the third party failed to prove that it had any right of property in the Distrained Jewellery under s 10 (2) of the Act. The relationship between the third party and the tenant could not reasonably be said to be a consignor-consignee relationship. On the contrary, it seemed that the parties merely had a sale and return arrangement: at [90] .

Given the reality of the commercial relationship between the tenant and the third party, and the fact that both entities were at all times controlled and owned by the same or related parties, the third party could have difficulty on the established facts in denying any beneficial interest in the tenancy so as to fall within the ambit of s 10 (1) (c) of the Act: at [93] .]

Adams v Grane (1833) 1 Cr & M 380; 149 ER 447 (refd)

Challoner v Robinson [1908] 1 Ch 49 (refd)

Gilman v Elton (1821) 3 Br & B 76; 129 ER 1211 (refd)

Goldring Timothy Nicholas v PP [2013] 3 SLR 487 (refd)

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