Golden Village Multiplex Pte Ltd v Marina Centre Holdings Private Limited

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 25 January 2002
• Neutral Citation: [2002] SGCA 6
• Docket Number: Civil Appeal No 600084 of
• Date: 25 January 2002
• Year: 2002
• Published date: 19 September 2003
• Plaintiff Counsel: Engelin Teh SC (instructed), Leonard Hazra and Loh Lik Peng (David Lim & Partners)
• Citation: [2002] SGCA 6
• Defendant Counsel: Goh Kok Yeow and Jeanette Lee (De Souza Tay & Goh)
• Court: Court of Appeal (Singapore)
• Subject Matter: Agreement to lease premises,Whether lease must be in approved form,Leases,Lease of registered land exceeding seven years,ss 2(2) & 10(3) Planning Act (Cap 232, 1990 Ed),Lease not in approved form,Whether breach of provisions of Planning Act (Cap 232, 1990 Ed) rendering lease void and unenforceable,Whether void at law -Whether agreement devoid of any legal effect or incapable of creating any rights,Landlord and Tenant,Conveyance,Agreements for leases,Land,Planning Law,s 45(2) Land Titles Act (Cap 157, 1994 Ed),ss 2 & 53(1) Conveyancing and Law of Property Act (Cap 61, 1994 Ed),Whether agreement enforceable in equity,Planning control,Development and subdivision of land,Form,s 87(1) Land Titles Act (Cap 157, 1994 Ed),s 165(1) Land Titles Act (Cap 157, 1994 Ed)

Judgment

GROUNDS OF DECISION

1. This was an appeal from the decision of Woo Bih Li JC dismissing an application by the appellants, Golden Village Multiplex Pte Ltd (‘Golden Village’), for an order that the agreement for a lease dated 28 February 1995, which they made with the respondents, Marina Centre Holdings Pte Ltd (‘Marina Centre’), was void, illegal and/or unenforceable. We dismissed the appeal and now give our reasons

Background facts

2. The relevant facts giving rise to the appeal were not in dispute and were briefly these. Marina Centre own and manage a building known as ‘Leisureplex’ and the adjoining shopping mall, both of which are located in a complex known as the Marina Square. By an agreement dated 28 February 1995 made between them and Golden Village, they agreed to lease to Golden Village the 3^rd and 4^th levels and a part of the 2^nd level of the Leisureplex, more particularly described in the Agreement (collectively called ‘the premises’) to be used as a cinema complex for a term of 15 years. The entire complex stands on lots 357 and 358 of Town Subdivision 11 situate at Raffles Boulevard. Annexed to the Agreement was a form of the lease (‘annexed lease’) which was agreed to be executed by the parties eventually. The agreement and the annexed lease are together hereinafter referred to as ‘the Agreement’. Clause 8 of the Agreement provided as follows:

8. TENANT TO EXECUTE THE ANNEXED LEASE

The Tenant shall on or before the time fixed for the commencement of the TERM upon receipt of a twenty-eight (28) day written notice from the Landlord duly execute the ANNEXED LEASE with such amendments or variations thereto only as may be agreed between the parties hereto.

3. The annexed lease was not in the form prescribed under the Land Titles Act (Cap 157, 1994 ed) (‘LTA’), and therefore was not capable of being registered with the Registry of Titles. It was not the intention of Marina Centre to apply for and obtain subdivision approval for the premises comprised in the Agreement and accordingly no registrable lease could be granted to Golden Village. This intention was communicated to Golden Village at an early stage in the negotiations. Initially, this was not acceptable to Golden Village, which required the proposed lease to be registered with the Registry of Titles. There were subsequent negotiations between them on the point, and eventually Golden Village were prevailed upon to accept the lease in the form of the annexed lease. The Agreement was duly signed by Golden Village and was returned to Marina Centre on 9 January 1995 for stamping. In July 1996 or thereabouts, Golden Village took possession of the premises pursuant to the Agreement.

4. To reflect the agreement that the lease of the premises to be executed by the parties would not be in a registrable form, cl 9 of the Agreement provided as follows:

9. COVENANTS BY THE TENANT

The Tenant hereby covenants with the Landlord as follows:-

9.1 That it shall during all periods of use and/or occupation of the PREMISES prior to the commencement of the TERM be bound by all terms, covenants, conditions, stipulations and provisions set out in the ANNEXED LEASE so far as the same may be applicable.

9.2 That it shall not, during the continuance of the TERM, register the lease to be granted under this Agreement to Lease and the ANNEXED LEASE at the Registry of Land Titles and Deeds, Singapore or at any other registry in Singapore, or to require the Landlord to subdivide the BUILDING or any part thereof or to do any act or thing which could result in the Landlord being required to subdivide the BUILDING or any part thereof.

5. Nothing of any consequence in relation to the Agreement happened until some four years later. On 12 April 2000, Golden Village wrote to Marina Centre requesting a formal lease of the premises for their review and execution. Marina Centre forwarded a lease to Golden Village for execution. In response, the latter commented that the terms set out in the enclosed lease were the same as those set out in the annexed lease. They further pointed out that Marina Centre had not forwarded to them a lease in an approved form under the LTA. In reply, Marina Centre drew Golden Village’s attention to cl 9.2 of the agreement. Further correspondence between them ensued, and Golden Village insisted that the lease had to be registrable under the LTA. Thereafter, from January 2001, Golden Village failed or refused to pay rent for the premises, and Marina Centre called on the guarantee issued by The Hongkong And Shanghai Banking Corporation Ltd for the sum of $198,971.20 in payment to account of the rent of $215,245.28.

6. On 12 February 2001, Golden Village took out an application by way of an originating summons seeking a declaration that the Agreement was void, illegal and/or unenforceable and consequential relief. Before the court below, several arguments were advanced on behalf of Golden Village. It was contended, inter alia, that (a) there was a failure of consideration or that the consideration was illusory, since Golden Village would not be getting a lease which could be registered; (b) that although they knew they would not get a registrable lease, that was due to a mistake of law which was shared by them and Marina Centre, as both parties thought that the agreement had conferred some kind of interest in the premises; (c) the lease was tainted with illegality and unenforceable as it was in breach of the Planning Act (Cap 232, 1990 Ed) (‘Planning Act’) on the ground that the lease constituted a subdivision of the premises from the rest of the building without complying with the requirements of the Planning Act.

The decision below

7. The judge held that the Agreement was void at law. In such an event, the position at common law was that the term created was a tenancy at will, and since Golden Village had entered into possession of the premises and were paying rent, a periodic tenancy was created. However, in equity, Golden Village had a term for the period as stated in the agreement, and equity would also grant specific performance of the Agreement, unless by reason of the conduct of the party concerned the court refuses to grant any relief. The judge relied also on s 45(2) of the LTA which provides that nothing therein is to be construed as preventing any unregistered instrument from operating as a contract. The judge held that in the present case, Golden Village would not be getting a registrable lease under the Agreement. That notwithstanding, should Marina Centre choose to jeopardise Golden Village’s interest as a tenant in the premises, their interest would be protected by the court granting the suitable remedy.

8. Finally, the judge held that s 2(2) of the Planning Act applied to instruments in an approved form. Thus, if a lease was in an approved form and was executed without obtaining a subdivision from the relevant authorities, the lessor would be in breach of s 10(3) read with s 2(2) of the Planning Act. As the Agreement was not in an approved form, there was no breach of the Planning Act. In any case, the judge held that breach of the Planning Act did not necessarily mean that the lease was void and unenforceable.

The appeal

9. There were mainly three issues raised in this appeal. The first is whether the Agreement being void at law would operate as a contract in equity. The second is whether the Agreement contravened the provisions of the Planning Act on the ground that no sub-division approval had been obtained. The third issue is whether under s 87 of the LTA the lease granted to Golden Village must be in the approved form.

Equitable lease

10. The first submission of counsel for Golden Village was that the Agreement was void at law under s 53(1) of the Conveyancing and Law of Property Act (Cap 61, 1994 ed) (‘CLPA’). That, in our view, was correct, as s 53(1) provides:

53.–(1) A conveyance of any estate or interest in land other than a lease for a period not exceeding 7 years at a rack rent shall be void at law unless it is by deed in the English language.

Plainly the Agreement fell within the terms of s 53(1) of the CLPA and was void at law. Under s 2 of the CLPA, the term ‘conveyance’ includes a lease, and a ‘lease’ includes ‘an agreement for a lease where the lessee has become entitled to have his lease granted’. In this case, since the Agreement was not executed by way of a deed, it was therefore void under s 53(1) of the CLPA.

11. Next, counsel submitted that the Agreement not being registered under the LTA was ineffectual to pass any estate or interest in the premises. Here counsel was also correct. Section s 45(1) of the LTA provides as follows:

(1) No instrument until registered as in this Act provided is effectual to pass any estate or interest in land under the provisions of this Act, but upon registration of an instrument the estate or interest therein specified shall pass, or the land shall become liable as security for the payment of money (as the case may be), subject to such covenants and conditions as are set forth in the instrument and are capable of taking effect, and subject to such covenants and conditions as are by law declared to be implied in instruments of a like nature.

12. These submissions, though incontrovertible, did not conclude the matter in issue. As the judge below held, and we agreed, it does not follow that the Agreement is devoid of any legal effect and is incapable of creating any rights. The Agreement operates as a contract and the terms thereof and the rights of the parties thereunder are enforceable in equity under the doctrine of Walsh v Lonsdale (1882) 21 Ch D 9. It will be treated as an equitable lease for the term agreed upon and as between the parties to the agreement is equivalent to a lease...