Klerk-Elias Liza v KT Chan Clinic Pte Ltd

• Judge: Karthigesu J
• Judgment Date: 23 April 1993
• Neutral Citation: [1993] SGCA 28
• Citation: [1993] SGCA 28
• Defendant Counsel: David Mitchell (Donaldson & Burkinshaw)
• Published date: 19 September 2003
• Plaintiff Counsel: Harry Elias and Yap Teong Liang (Harry Elias & Partners)
• Date: 23 April 1993
• Docket Number: Civil Appeal No 166 of 1991
• Court: Court of Appeal (Singapore)
• Subject Matter: Remedies,Contract,Civil Law Act (Cap 43, 1988 Ed),Letter providing for formal lease to be drawn up incorporating usual terms,Wrongful repudiation by lessee,s 9 Discretion of trial judge,Damages,Wrongful repudiation of lease by lessee,Whether deduction for income tax to be made from sum awarded to lessor as damages,s 9 Civil Law Act (Cap 43, 1988 Ed),Whether interest should be awarded,Assessment of damages,Discretion of trial judge,s 10(1)(f)Income Tax Act (Cap 134),Agreements for leases,Landlord and Tenant,Whether valid agreement concluded,Whether essential terms for valid agreement for lease settled,s 10(1)(f) Income Tax Act (Cap 134),Interest on damages,Whether agreement void for uncertainty,Repudiation retracted or withdrawn before acceptance thereof by lessee,Whether lessee wrongfully repudiated lease by quitting premises,Alleged repudiation by lessor,Letter by lessor setting out terms and signed acceptance thereof by lessee

Cur Adv Vult

This is an appeal from the judgment of FA Chua J giving judgment to the respondents (KT Chan Clinic) for $167,378 and costs to be taxed against the appellant (Mrs Klerk) for breach of an agreement for lease contained in a letter dated 7 July 1983 in respect of units #05-33 to #05-37 situate at Tanglin Shopping Centre (`the premises`). By a respondents` notice, KT Chan Clinic cross-appealed for interest on the judgment sum pursuant to s 9 of the Civil Law Act (Cap 43, 1988 Ed) `for the pre-judgment period at such rate as the court deems fit`. The judgment of FA Chua J was given on 7 November 1991.

In January 1983 Mrs Klerk had two businesses, a beauty salon called Institut Jeunesse et Beaute and a jewellery retail shop called La Margia Jewellers (`the beauty salon` and `La Margia` respectively) both of which she carried on at premises in the former Singapura Forum Hotel in Orchard Road. She had been running these two businesses for the past 12 years. The offices of these two businesses were at the former Ngee Ann Building in Orchard Road from where, her husband also ran his own family business.

In early 1983 it became known that both the Singapura Forum Hotel and the Ngee Ann Building would be demolished soon for redevelopment. Mrs Klerk started looking for new premises for her two businesses. She found suitable premises at Centrepoint for the beauty salon and in June 1983 the beauty salon moved into those premises. She still needed premises for La Margia and for the offices of her two businesses. Her husband too needed premises for his own family business.

At about this time, that is to say about the end of June or early July 1983, Mrs Klerk saw an advertisement in The Straits Times of premises being available at Tanglin Shopping Centre. She answered the advertisement by calling the telephone number given in the advertisement. It was answered by the manager of Perrodo Offshore (S) Pte Ltd (`Perrodo`). An appointment was made for Mrs Klerk to view the premises.

Mrs Klerk, her husband and her son went to view Perrodo`s premises which turned out to be the premises. She described her visit to the premises and her subsequent meeting with Dr Chan in her evidence as follows:

My husband and I and my son went to the premises of Perrodo at Tanglin Shopping Centre. We saw the manager who told us that he still had a couple of months of his lease. He told me that the premises belonged to Dr Chan.

We saw the premises and we thought we could use it. After discussing with the manager, we came to an agreement about the rental of $8,100 pm provided we could come to an agreement with Dr Chan.

The first time I met Dr Chan was in early July 1983; can`t remember the date. My son was also present at this meeting. We told Dr Chan the nature of our business, that we had at Singapura Forum and we told him about our office at Ngee Ann Building. We told him that we had a jewellery retail shop and an office in Ngee Ann Building and that we would like to combine this. We told him that the premises of Dr Chan was big and we would like to sublet part of it. Dr Chan said he had no objection and that we could do whatever we liked. Then I asked Dr Chan that I would like to sublet part of the premises and pay a rental of $8,100 pm.

I told Dr Chan that we had to vacate Singapura Forum and Ngee Ann Building.

The premises of Dr Chan was approximately 1,700sq ft.

Dr Chan did not agree to the rental of $8,100. I also told him that we would like to have a lease of three years with a two-year option.

There was no deal that day.

According to the evidence of Mrs Klerk, she met Dr Chan again another day, probably on the morning of 4 July 1983 when Dr Chan had offered her a rental of $8,500 pm. She said she had to consult her husband and had subsequently telephoned Dr Chan during the day on 4 July 1983 several times but could not get to speak with him. Eventually she had managed to contact Dr Chan late at night on 4 July 1983 at his home and had accepted Dr Chan`s offer of $8,500 pm which Dr Chan had acknowledged by saying `OK`. This was followed by her letter dated 5 July 1983 to Dr Chan which her husband had drafted for her. The letter read as follows:

Re: Units 05-33 - 05-37 Tanglin Shopping Centre

Further to our telephone conversation of yesterday evening, we hereby confirm that we accept to rent the above premises as per conditions verbally agreed, ie

(1) The total rental including maintenance is $8,500 per month.

(2) The agreement will be for three years with a option for two years, commencing

1 November 1983.

(3) A deposit of $8,500 in cash and a bank guarantee of $17,000 is to be lodged with you.

(4) One months rental is to be paid in advance.

(5) Subletting is permitted if and when required.

We look forward to receiving your written confirmation of the above and in due time a draft copy of the rental agreement.

Commenting on Mrs Klerk`s letter of 5 July 1983, Dr Chan said in evidence:

I did not agree verbally to the said terms. These were in fact the terms offered by the defendant (Mrs Klerk).

He then went on to say:

Two days after AB1 (Mrs Klerk`s letter of 5 July 1983) I wrote to the defendant on

7 July, AB2. There was a discussion, a meeting, on the morning of 7 July 1983, held in my office. It could have been over the telephone. Difficult to remember, six years ago. I discussed certainly with the defendant. The terms set out in AB2 were the terms agreed with Mrs Klerk, the defendant. The terms cover the same ground as the letter of 5 July 1983 from the defendant AB1, except the quantum of rent payable is different. I added I would not pay agency fees as it was a direct landlord/tenant arrangement.

Dr Chan`s letter to Mrs Klerk of 7 July 1983 written on a letterhead which read `KT Chan Clinic` was as follows:

Dear Mrs Klerk

Units #05-33/37 Tanglin Shopping Centre

This is to confirm the terms of rental of the above premises as discussed this morning:

(1) The rental will be $7,740 per month.

(2) Maintenance charge is to be paid separately and at the moment, it is 80 cents per square foot and therefore comes to $1,440, making a total sum payable each month of $9,180 per month at present. Should there be any increase in maintenance charges, this increase will be borne by the tenant.

(3) The lease will be for three years commencing 1 December 1983 with an option for renewal at the end of the period, details of which will be incorporated in the lease.

(4) Rent is to be paid in advance and one month`s rental for December 1983 is to be paid on 1 December 1983.

(5) A deposit of $9,180 is to be paid in cash immediately and a bank guarantee for $18,360 is to be lodged with me in due course.

(6) Subletting will be permitted, details of which will be in the lease.

(7) The lease will be legally drawn up with the usual terms that apply in Singapore and the tenant will be responsible for the cost of the lease.

(8) I will not be responsible for any agent`s fees payable.

If you agree to these terms, please sign the attached copy and return it.

On receipt of your confirmation, I shall authorize Perrodo Offshore (Singapore) Pte Ltd in writing to sublet the premises, of which they are the present legal tenants, to you at a mutually convenient time.

Yours faithfully

(signed)

KT Chan

Mrs Klerk said in her evidence that she was surprised when she received

Dr Chan`s letter of 7 July 1983, since `the amount of the rental was entirely different`. She also said that she tried to telephone Dr Chan but could not get him. She then received a letter from Dr Chan dated 8 July 1983 which read as follows:

Units #05-33/37 Tanglin Shopping Centre

I refer to my letter of offer of 7 July 1983 regarding the above premises.

The offer is good only up to 8 July 1983 after which it will no longer hold for reasons that I have indicated to you in our discussions.

Apparently there were other people interested in the premises but Mrs Klerk said in her evidence that she regarded this letter as `a pressure letter`, and so she had accepted the terms, wrote out a cheque for $9,180 and signed the letter of 7 July 1983 accepting the terms contained therein.

In fact the letter of 7 July 1983 was signed by her husband but there is no dispute that he signed it on behalf of Mrs Klerk. There is also no dispute that the letter of 7 July 1983 was returned to Dr Chan on 8 July 1983 together with a cheque for $9,180.

Dr Chan duly authorized Perrodo that they could sublet the premises to Mrs Klerk for the remainder of their lease with Dr Chan, that is, to 30 November 1983. Accordingly Mrs Klerk moved into the premises as the subtenant of Perrodo at the end of July or the beginning of August 1983 and began decorating the premises by installing show cases, spot lights, alarm system, carpets and a safe, which she maintained in her evidence was consistent `with setting up of a retail jewellery shop`.

However, she admitted that the nameplates to be exhibited at the premises were: `La Margia Jewellers (wholesale office) and Institut Jeunesse et Beaute (Registered office)`. She explained this by saying: `We wanted to give publicity that we sell jewellery at wholesale prices.` Mrs Klerk also said in her evidence:

Because I told Dr Chan at the first meeting that the main purpose was to have the jewellery shop and the office of jewellery shop combined in one roof and there was no objection; he said you could do whatever you liked. He said the lease would be sent to us and so it was not necessary to mention it in my letter of AB1 (Mrs Klerk`s letter of 5 July 1983). AB1 did not contain all the terms agreed.

AB2 and AB3 (Dr Chan`s letter of 7 July 1983) did not contain all the terms agreed upon. There was no doubt about it that there was to be a lease which would contain all the terms agreed upon.

Until the lease was signed there was no binding agreement...