Hu Lee Impex Pte Ltd v Lim Aik Seng

• Jurisdiction: Singapore
• Judgment Date: 26 July 2013
• Date: 26 July 2013
• Docket Number: Suit No 190 of 2012
• Court: High Court (Singapore)

Hu Lee Impex Pte Ltd

Plaintiff

and

Lim Aik Seng (trading as Tong Seng Vegetable Trading)

Defendant

[2013] SGHC 142

Andrew Ang J

Suit No 190 of 2012

High Court

Contract—Formalities—Plaintiff alleging that shop unit was assigned pursuant to oral agreements—Whether oral agreements unenforceable due to s 6 (d) Civil Law Act (Cap 43, 1999 Rev Ed) —Whether doctrine of part performance applicable—Whether acts relied upon as evidence of part performance had to unequivocally and of themselves point to alleged contract—Section 6 (d) Civil Law Act (Cap 43, 1999 Rev Ed)

Contract—Formation—Plaintiff alleging that shop unit was assigned pursuant to oral agreements—Whether such oral agreements existed

The plaintiff, Hu Lee Impex Pte Ltd, and the defendant, Lim Aik Seng, were wholesalers dealing with fruits and vegetables. A few months after May 2006, the plaintiff assigned the tenancy of a shop unit (“the Shop Unit”) to the defendant and one Tan Cheng Tong, who had since passed away (“the deceased”) who were then trading in partnership under the business name of Tong Seng Vegetable Trading (“TSVT”) with the assignees subsequently entering into a tenancy agreement directly with the Housing and Development Board (“the HDB”).

The plaintiff alleged that the Shop Unit was assigned pursuant to an oral agreement. The upshot of the oral agreement was that the Shop Unit would be reassigned to the plaintiff upon the plaintiff’s request, or if the deceased ceased to operate a vegetable wholesale business at the Shop Unit. The plaintiff further alleged that there was another oral agreement concluded in May 2011 after the deceased had been diagnosed with terminal cancer. This oral agreement allowed the defendant to retain the Shop Unit and continue the business thereat with the defendant’s son but stipulated that the Shop Unit would be reassigned back to the plaintiff if the defendant’s son ceased to operate the vegetable wholesale business at the Shop Unit or the defendant breached any other terms of the second oral agreement. It further provided for a proportion of the profits earned from the wholesale business to be paid to the deceased (or the deceased’s wife after his passing).

The plaintiff applied for an order compelling the defendant to reassign the Shop Unit back to it on the ground of alleged breaches of the second oral agreement.

Held, dismissing the application:

(1) The purported grant of an open-ended obligation to reassign a tenancy upon the fulfilment of certain conditions involved the disposition of an interest in immovable property within the meaning of s 6 (d) of the Civil Law Act (Cap 43, 1999 Rev Ed) (“s 6 (d) ”): at [15] .

(2) Section 6 (d) applied to agreements to assign. The requirement for the formality of writing was not predicated on the contract pertaining to land creating rights in rem from the outset: at [16] .

(3) It was well settled that part performance was part of Singapore law, and was an exception to the requirements of s 6 (d): at [19] .

(4) There were two different standards with regard to part performance. Elizabeth Maddison v John Alderson(1883) 8 App Cas 467 stipulated that the acts that were relied upon had unequivocally to point towards the existence of a contract fitting the description of the oral contract alleged to exist. Steadman v Steadman[1976] AC 536 stood for the proposition that the doctrine of part performance was satisfied if, on an analysis of all the circumstances (but leaving aside evidence of the purported oral contract), the court was satisfied that more probably than not the acts relied upon were done in reliance on the oral contract: at [21] , [23] and [24] .

(5) Steadman v Steadman was criticised by the UK Law Commission in its report Transfer of Land Formalities for Contracts for Sale etc of Land(Law Com No 164, 1987). It was impossible to discover with acceptable certainty, prior to proceedings, whether a contract would be found to be enforceable. Taking Steadman v Steadman at its highest, it also appeared that an oral contract for sale could be readily and unilaterally made enforceable. This led to the legislative abolition of the doctrine of part performance in England: at [28] and [30] .

(6) Elizabeth Maddison v John Alderson was to be preferred to Steadman v Steadman. A wide interpretation of the doctrine of part performance would defeat the raison d’etre of s 6 (d) by undermining certainty and increasing the potential for litigious disputes, would unwittingly bind parties due to the unilateral acts of their counterparties, and would be tantamount to a judicial abolition of s 6 (d): at [32] and [33] .

(7) Regardless of the standard adopted, the plaintiff could not fulfil the doctrine of part performance because the court was required to leave aside evidence about the oral contract. The plaintiff could only point to acts of forbearance, or acts which did not prove the existence of the oral contract: at [34] and [35] .

(8) The evidence adduced by the plaintiff fell far short of establishing, on a balance of probability, the specific terms of the allegedly binding agreements: at [44] and [45] .

Cathay Theatres Pte Ltd v LKM Investment Holdings Pte Ltd [1998] 1 SLR (R) 234; [1998] 1 SLR 917 (folld)

Choong Wai Phwee v Chileon Pte Ltd [2000] 2 SLR (R) 637; [2000] 4 SLR 340 (refd)

Elizabeth Maddison v John Alderson (1883) 8 App Cas 467 (folld)

H, Re [1996] AC 563 (folld)

Joseph Mathew v Singh Chiranjeev [2010] 1 SLR 338 (folld)

Khoo Keat Lock v Haji Yusop [1929] SSLR 210 (refd)

Midlink Development Pte Ltd v The Stansfield Group Pte Ltd [2004] 4 SLR (R) 258; [2004] 4 SLR 258 (refd)

Steadman v Steadman [1976] AC 536 (not folld)

Yaxley v Gotts [2000] Ch 162 (refd)

Civil Law Act (Cap 43, 1999 Rev Ed) s 6 (d) (consd)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 14 r 12, O 18 r 19

Law of Property Act 1925 (c 20) (UK) s 40

Law of Property (Miscellaneous Provisions) Act 1989 (c 34) (UK) s 2

Statute of Frauds 1677 (c 3) (UK) s 4

Wong Tze Roy (Goh JP & Wong) for the plaintiff

Chow Weng Weng (Chow Ng Partnership) for the defendant.

Judgment reserved.

Andrew Ang J

Introduction

1 The plaintiff, Hu Lee Impex Pte Ltd, seeks an order that the defendant Lim Aik Seng assigns the tenancy of a shop unit located at Block 11, Wholesale Centre #01-572, Singapore (“the Shop Unit”) pursuant to certain oral agreements. The Shop Unit is currently being rented by the defendant from the Housing and Development Board (“HDB”).

Facts

Undisputed background

2 Both the plaintiff and defendant are wholesalers dealing with fruits and vegetables. Tan Soon Huat (“PW 1”) is the plaintiff’s managing director. The defendant, with one Tan Cheng Tong (“the deceased”), had registered Tong Seng Vegetable Trading (“TSVT”) as a business name for their partnership in March 1998. The plaintiff had carried on part of its wholesale business at the Shop Unit since about 1992, and had been renewing tenancy agreements in respect of the same with the HDB since then. A few months after May 2006, the plaintiff assigned the tenancy of the Shop Unit to TSVT, with TSVT subsequently entering into a tenancy agreement dated 7 November 2006 directly with HDB for the Shop Unit.

Purported oral agreements

3 The parties materially disagree on the circumstances surrounding the assignment of the Shop Unit to TSVT. The plaintiff alleges that the Shop Unit was assigned pursuant to a specific oral agreement (elaborated upon at [5] below) (“the 2006 Agreement”). The defendant denies that there was ever such an agreement.

4 Early in 2011, the deceased learnt that he was terminally ill from cancer. A meeting was held at the deceased’s home in May 2011, where discussions were held regarding the Shop Unit (“the May 2011 Meeting”). The plaintiff alleges that another oral agreement was concluded (elaborated upon at [7] below) (“the 2011 Agreement”). The defendant denies that there was such an oral agreement. The deceased subsequently passed away on 1 June 2011.

Pleadings

5 The plaintiff avers that the 2006 Agreement was made on the following express terms:

(a) the plaintiff would assign to the deceased or TSVT all its rights and interest in the Shop Unit under the tenancy agreement with the HDB dated 21 December 2004;

(b) the sole purpose of the assignment was to enable the deceased to carry on a vegetable wholesale business at the Shop Unit;

(c) the plaintiff would not charge the deceased and/or TSVT any fee for the assignment; and

(d) the Shop Unit would have to be reassigned to the plaintiff upon the plaintiff’s request or the deceased ceasing to operate a vegetable wholesale business at the Shop Unit.

6 In contrast, the defendant avers that the plaintiff had relocated its business to new premises at Chin Bee Avenue and had no further need for its then three shop units (of which the Shop Unit was one) at the Pasir Panjang Wholesale Centre, all of which had cold rooms installed by the plaintiff. The plaintiff had approached the defendant and the deceased sometime in May 2006 for TSVT to take over two of the units without any payment required. In return, the plaintiff would take over the tenancies of two stalls in the same wholesale centre from the defendant and the deceased. The defendant and the deceased understood that it was cheaper and easier for the plaintiff to assign the units (inclusive of the cold rooms) without requiring any payment, as surrendering the units back to the HDB would entail reinstatement of the same involving the removal of the cold rooms. The defendant and the deceased subsequently agreed that they would only take the Shop Unit. Notably, the plaintiff assigned the second unit to a third party which to-date is still occupying the same. The third unit was reinstated and surrendered to the HDB.

7 As regards the 2011 Agreement, the plaintiff avers that PW 1 had at the May 2011 Meeting informed the deceased...