Fong Holdings Pte Ltd v Computer Library (S) Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 09 May 1991
• Date: 09 May 1991
• Docket Number: Suit No 3636 of 1984
• Court: High Court (Singapore)

Fong Holdings Pte Ltd

Plaintiff

and

Computer Library (S) Pte Ltd

Defendant

[1991] SGHC 61

Chan Sek Keong J

Suit No 3636 of 1984

High Court

Contract–Consideration–Promissory estoppel–Landlord promised to let tenant surrender on part-payment of rent and maintenance charges–Tenant made part-payment as agreed and returned keys to premises–Whether landlord estopped from claiming for future rents–Contract–Consideration–Sufficiency of consideration–Tenant wanted to quit premises because of poor business–Tenant would not be able to pay full rent and maintenance charges–Tenant to pay part rent and maintenance charges for surrender–Tenant contractually obliged to pay full rent and maintenance–Whether sufficient consideration for surrender exists–Landlord and Tenant–Termination of leases–Surrender–Express surrender–Statute of Frauds 1677 (c 3) (UK) requires note in writing to validate express surrender–Tenant wrote letter setting out terms of agreement for early termination and signed letter–Whether surrender valid–Section 3 Statute of Frauds 1677 (c 3) (UK)–Landlord and Tenant–Termination of leases–Surrender–Surrender by operation of law–Surrender effected by delivery up of possession pursuant to agreement between landlord and tenant to deliver up possession–Landlord retained keys returned by tenant–Agreement proved–Significance of landlord's retention of keys–Whether surrender effective–Words and Phrases–“Note in writing”–Section 3 Statute of Frauds 1677 (c 3) (UK)

The plaintiff landlord sued the defendant tenant for loss of rent as a result of the latter's early termination of the tenancy. The tenant submitted that it had spoken to the landlord about early termination due to bad business, and that there had subsequently been an agreement for early termination of the tenancy, as evidenced by two letters it sent to the landlord accompanied by cheques for outstanding rental and service charge payments and the keys to the premises. The landlord denied that there had been any agreement for early termination of the tenancy. The court found that there was an oral agreement for early termination of the tenancy. The issues of law before the court were: whether the tenant's surrender of the tenancy was effective at law, viz whether s 3 of the Statute of Frauds 1677 (c 3) (UK), which required an express surrender to be by deed or note in writing, was complied with; and whether there had been consideration for the landlord's agreement to accept any such surrender of the lease.

Held, dismissing the plaintiff's claim:

(1) The tenant's second letter was a sufficient “note in writing” to effect the surrender of the premises in terms of s 3 of the Statute of Frauds 1677. It was in writing signed by the party surrendering the premises. Where the letter was written and the acts evidenced thereby were done by a tenant in performance of a prior oral agreement to surrender, it was effective to operate as an express surrender under s 3, as no further consent of the landlord was required: at [22].

(2) Where a promisor made a promise as a result of which he obtained a benefit or obviated a disbenefit, that was sufficient consideration for his promise, even though the promisee did not suffer any detriment because he had merely done what he was under a legal obligation to the promisor to do in return for the promise of the promisor. There was consideration for the promise of the landlord to agree to the surrender. Although the tenant was under a legal liability to pay the arrears of rent to the landlord and maintenance charges directly to the management corporation, nevertheless the landlord did derive a benefit from the receipt of the arrears of rent and from being relieved of having to pay the arrears of maintenance charges, as otherwise they might not have been paid at all, bearing in mind that the tenant's business was poor and losing money. Moreover, the landlord also derived a benefit in being able to let the premises out again. The premises were not let out until after the expiry date of the tenancy, but there was no evidence that they could not have let out the premises at any rent: at [25].

[O Even if the second letter and its contents did not comply with s 3 of the Statute of Frauds 1677, there was a surrender by operation of law. The acceptance or retention of the keys of the premises by the landlord, although in itself equivocal, was no longer so once the oral agreement to surrender has been proved. The retention or acceptance of the keys could be explained in terms of the oral agreement. Where there was an agreement between the landlord and the tenant that the latter should deliver up possession, and possession was delivered up accordingly, there was a surrender by operation of law: at [23].

If the express surrender was not valid by reason of the Statute of Frauds 1677, or there was no surrender by operation of law, promissory estoppel could be applied to estop the landlord from claiming that it was entitled to future rents. Consideration was not necessary for the application of the doctrine of promissory estoppel: at [24].]

Central London Property Ltd v High Trees House Ltd [1947] 1 KB 130 (folld)

Fenner v Blake [1900] 1 QB 426 (distd)

Foster v Robinson [1951] 1 KB 149 (folld)

Grimman v Legge (1828) 8 B & C 324; 108 ER 1063 (folld)

Highway Properties Ltd v Kelly, Douglas & Co Ltd (1971) 17 DLR (3d) 710 (distd)

Oastler v Henderson (1876-1877) 2 QBD 575 (distd)

Phene v Popplewell (1862) 12 CBNS 334; 142 ER 1171 (distd)

Smith v Roberts (1892) 9 TLR 77 (distd)

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1; [1990] 1 All ER 512 (folld)

Law of Property Act 1925 (c 20) (UK)s 52 (1)

Statute of Frauds 1677 (c 3) (UK) s 3 (consd)

Salem Ibrahim and Sylvia Lim (Harry Elias & Partners) for the plaintiff

S Hameed (Hameed & Co) for the defendant.

Judgment reserved.

Chan Sek Keong J

1 This is a claim by the...