Golden Village Multiplex Pte Ltd v Marina Centre Holdings Pte Ltd

• Jurisdiction: Singapore
• Judge: Woo Bih Li JC
• Judgment Date: 05 July 2001
• Neutral Citation: [2001] SGHC 169
• Docket Number: Originating Summons No 600195 of
• Date: 05 July 2001
• Published date: 07 November 2003
• Year: 2001
• Plaintiff Counsel: Josephine Chong and Leonard Hazra (David Lim & Partners)
• Citation: [2001] SGHC 169
• Defendant Counsel: David De Souza (De Souza Tay & Goh)
• Court: High Court (Singapore)
• Subject Matter: Specific performance,Agreement not under deed,Mistake of law,Anticipatory breach,Planning Law,Whether agreement and lease void at law,Control over development,Contract,ss 2(2) & 10(3) Planning Act (Cap 232, 1990 Ed),Equity,Allegation of non-compliance with requirements for subdivision on lessor's part,Development and subdivision of land,Whether lease void and unenforceable for breach of provisions,ss 2 & 53(1) Conveyancing and Law of Property Act (Cap 61, 1994 Ed),s 45(2) Land Titles Act (Cap 157, 1994 Ed),Principle in Walsh v Lonsdale,Remedies,Applicability of Planning Act (Cap 232, 1990 Ed) provisions,Lease not intended to be under deed nor in approved form,Landlord and Tenant,Failure of consideration,Agreements for leases,Grant of non-registrable lease,Intended instrument of lease not in approved form,Whether any interest in property leased created,Discharge

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Introduction

The plaintiffs Golden Village Multiplex Pte Ltd (`Golden Village`) had entered into an Agreement to Lease dated 28 February 1995 (`the agreement`) with the defendants Marina Centre Holdings Pte Ltd (`Marina Centre`).

The agreement is in respect of the third and fourth levels and a small portion of the second level of a building known as the Leisureplex adjoining the shopping centre known as Marina Square (`the premises`).

The intention of Golden Village was to operate a six-screen cinema complex at the premises which would be its flagship in Singapore.

Under the agreement, read together with the attached form of a lease, the term is for a period of 15 years. It commenced in or about July or September 1996.

In this action filed on 12 February 2001, and amended on 17 May 2001, Golden Village sought a declaration that the agreement is void, illegal and/or unenforceable and for consequential relief.

On 20 June 2001, I dismissed the claim of Golden Village with costs.

Background

It is necessary to bear in mind the background leading to the execution of the agreement.

According to paras 5 to 27 of the affidavit of See San San, the Senior Manager of the Marketing Department of Marina Centre, filed on 7 March 2001:

5 The Defendants own operate and manage the building known as the Leisureplex and the adjoining shopping centre known as Marina Square both of which are located in the area known as Marina Square, Singapore (the "Shopping Centre"). The Shopping Centre has about 250 units, the number of which varies from time to time as units are consolidated or resized to meet the needs of existing or new tenants. It is therefore impractical for the Defendants to subdivide the Shopping Centre into fixed unit sizes.

6 In view of the above, the Defendants` practice has always been not to subdivide the units in the Shopping Centre. To give effect to this practice, the Defendants require all their tenants to covenant that they will not require the Shopping Centre to be subdivide [ sic ] and their standard terms and conditions of Agreement to Lease contains a covenant by the tenant:-

"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."

7 To further give effect to the above policy, the Defendants standard terms of Agreement to Lease contains a provision as follows:-

"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."

8 The abovementioned ANNEXED LEASE is not in the form contain [ sic ] in the Approved Forms For Use Under The Land Titles Act 1993 & The Land Titles (Strata) Act. A copy of the approved form is set out at [pages 9 to 13].

9 As the leases granted or to be granted by the Defendants are not intended for registration, they are not in the approved form and are not registrable. In this respect, the Defendants had been advised that if leases in the approved form are granted without written permission having been obtained to subdivide the land, there might be a deemed subdivision of the land under Section 4 of the Planning Act [pages 14 to 15] and a contravention of Section 12(3) thereof [page 16].

(NB: The numbering of the sections of the Planning Act referred to here by the deponent is from the 1998 Edition whereas the applicable Act is the 1990 Edition. However, the substance is the same.)

10 Following negotiations between the Plaintiffs and the Defendants on the Plaintiffs` intention to lease premises from the Defendants that the Plaintiffs intended to operate as a cinema complex, they signed a "Heads of Agreement" dated 12th March 1993 [pages 17 to 31]. By this agreement, the Plaintiffs agreed in principle to take a lease of premises (the "Premises") in the Leisureplex building that was then under construction. The lease of the Premises would be for 15 years commencing after the building was constructed.

11 Item 7 of Appendix II [page 19] to the Heads of Agreement provided that the terms and conditions of the Lease Agreement to be signed between the Plaintiffs and the Defendants would be in accordance with the standard terms and conditions of the Defendants` Lease Agreement. The Plaintiffs thereby agreed to the inclusion of theouldresaid [ sic ] provisions that the Lease to be granted to them would be in non-registrable form and they would not register it.

12 On or about 12th April 1994, the Plaintiffs received from the Defendants a discussion draft of the Agreement to Lease dated 8th April 1994 and the draft Lease annexed thereto (the "Lease Documents" which term includes the amendments thereafter made thereto). The Defendants are presently unable to trace their copy of the discussion draft but they believe that clause 9.2 of the Agreement to Lease contains the aforesaid standard provisions as set out in paragraph 6 above and clause 8 of the Agreement to Lease contains the standard provisions as set out in paragraph 7 above.

13 The Plaintiffs commented on the draft Lease Documents by their letter to the Defendants dated 24th May 1994 [pages 32 to 41]. The comments did not relate to clauses 8 and 9.2. Following this letter, the representatives of the Plaintiffs met and discussed it.

14 On the instructions of the Defendants, their then solicitors, M/s De Souza Tay & Partners wrote to the Plaintiffs` solicitors Messrs. Herbert Geer & Rundle in Melbourne by a letter dated 2 September 1994. The letter set out the Defendants` rationale for requiring certain clauses in the Lease Documents that had been objected to by the Plaintiffs. With regards to clause 9.2, the Defendants` solicitors explained [page 42] as follows:-

"MCH (i.e. the Defendant) has never agreed with any tenant that its lease may be registered. All tenants including anchor tenants have agreed to dispense with registration of the notification of the lease in the Land Titles Registry on the basis that they will rely instead on the reputation of MCH and its shareholders who have the highest standing. May we note that if in the future MCH were to dispose off [ sic ] its ownership in the BUILDING, it will be in MCH`s interests to ensure that the transferee is bound by the provisions of the leases failing which MCH will be liable in damages to the tenants."

15 By letter dated 17th October 1994 [page 45], the Plaintiffs` solicitors commented on the Lease Documents. With regard to clause 9.2, they enquired:-

"Is there any statutory protection given to the Tenants if the Lease is not registered? Notwithstanding the impeccable reputation of MCH and its shareholders, our client obviously has a substantial investment in the Lease and its interest must be protected."

16 The Defendants` solicitors replied by letter dated 10th November 1994 [page 48] and wrote with regards to clause 9.2, as follows:-

"There is no statutory protection to tenants if the Lease is not registered. Nevertheless, no tenant of MCH has insisted on a registered lease. It is not only the impeccable reputation of MCH and its shareholders which is relied upon, but no doubt also the net-worth of its assets."

17 By letter dated 14th November 1994 [page 50], the Plaintiffs` solicitors replied and with regards to clause 9.2, stated that the Plaintiffs would require the Lease to be registered.

18 Further negotiations took place between the Plaintiffs and the Defendants and by letter dated 25th November 1994 [page 52] the Plaintiffs informed the Defendants, with regards to clause 9.2, as follows:-

"John will discuss this with our solicitors as it would appear that we can only rely on the agreement and proceed against the Landlord in either

a) a claim in damages for breach of the agreement or

b) specific performance of the agre pant [ sic ]."

19 Subsequent to the Plaintiffs` aforesaid letter, the parties agreed that clause 9.2 would be retained without amendment and the Defendants provided finalised drafts of the Lease Documents to the Plaintiffs.

20 By letter dated 9th January 1995 [page 54], the Plaintiffs returned the Agreement to Lease to the Defendants duly signed for the same to be stamped.

21 The Plaintiffs took possession of the Premises in or about July 1996 and thereafter operated the same as a cinema complex.

22 By letter to the Defendants dated 12th April 2000 [page 55], the Plaintiffs noted that the parties had not executed any formal Lease Agreement and requested for a formal Lease for their review and execution.

23 Pursuant to the Plaintiffs` aforesaid letter, the Defendants forwarded the Lease to the Plaintiffs for their execution by their letter dated 26th June 2000 [page 56].

24 The Plaintiffs acknowledged the receipt of the Lease for their execution by their letter to the Defendants dated 3rd August 2000 [page 57]. In this letter, they commented as follows:-

"The terms set out in the enclosed lease agreement are the same as those set out in the draft lease agreement annexed to the Agreement to Lease dated 28 February 1995 and we note that you have not forwarded a lease in the form approved by the Land Titles Act Chapter 157 Revised Edition 1994 (the "LTA").

In the light of the foregoing, kindly forward to us a lease in the form approved by the LTA for our execution as soon as possible."

25 The Defendants` solicitors wrote to the Plaintiffs on 10th August 2000 [page 58], and drew the Plaintiffs` attention to clause 9.2 of the Agreement to Lease dated 28th February 1995.

26 Thereafter, the...