Malayan Credit Ltd v Jack Chia-MPH Ltd

• Jurisdiction: Singapore
• Judge: Lord Brandon of Oakbrook
• Judgment Date: 03 February 1986
• Neutral Citation: [1986] SGPC 1
• Date: 03 February 1986
• Subject Matter: Tenancy in common,First Sch para 3 Supreme Court of Judicature Act (Cap 15),Tenants in common in unequal shares,Land,Order of sale,Interest in land
• Docket Number: Privy Council Appeal No 33 of 1984
• Published date: 19 September 2003
• Defendant Counsel: Colin Ross-Munroe QC and Simon Elias (Coward Chance)
• Court: Privy Council
• Plaintiff Counsel: Leolin Price QC, Sian Thomas and M Karthigesu (Turner Kenneth Brown)

This appeal from the Court of Appeal of the Republic of Singapore raises the question whether the appellant and respondent companies are beneficially entitled to a lease of business premises as tenants in common in equal shares or as tenants in common in unequal shares. The High Court held that their shares were unequal. The Court of Appeal came to the opposite view and held that their shares were equal. A subsidiary question is whether the Court of Appeal was right to order a sale of the lease. This relief had been refused to the respondent company by the High Court.

In March 1976 Malayan Credit Properties Pte. Ltd (the property company), acquired an office block known as Malayan Credit House in the district of Claymore, Singapore. The property company was a wholly owned subsidiary of Malayan Credit Ltd (the credit company), which is the appellant before the Board. The credit company thereafter went into occupation of the whole of the seventh floor as tenant of the property company.

At a later date Jack Chia-MPH Ltd (the Chia company), of which Mr Jack Chia was Chairman, bought a substantial shareholding in the credit company. Thereafter, Mr Jack Chia became a director of the credit company and eventually Chairman of the Board, and three nominees of the Chia company also became directors. The Chia company is the respondent to the appeal.

In 1979, the Board of the credit company decided that Malayan Credit House should be sold, since it was contributing no profits to the group. A board meeting of the credit company was held on 11 August 1979 to consider a number of matters, including a proposed sale of the premises on the terms that the office space presently occupied by the credit company should be leased back by the purchaser. This particular sale proved abortive, but the board went on to consider the occupancy of the seventh floor and resolved as follows:

The Board approved of the arrangement for Jack Chia-MPH Ltd to share the office premises at Seventh Floor, Malayan Credit House. It was agreed that Jack Chia-MPH Ltd be charged for the area utilized by them, which is to exclude the Managing Director`s and Board Room. Messrs Jack Chia, Donald Chia, Robert K Booker and Wee Hock Ho who are also directors of Jack Chia-MPH Ltd abstained from the above discussion. The Board was informed that Jack Chia-MPH Ltd would be moving into the premises on or about 1 October 1979.

The next meeting of the board of the credit company was held on 31 August 1979 with Mr Jack Chia in the chair. The board approved the proposed sale of Malayan Credit House to United Overseas Land Ltd (United Overseas), at $15m. The minutes of the previous board meeting were approved, subject to minor alterations.

On the same day a memorandum of agreement was made between the property company, United Overseas, the credit company and the Chia company, providing for the sale to United Overseas of Malayan Credit House at the price mentioned. This agreement stipulated that United Overseas should grant to the credit company and the Chia company a lease of the seventh floor expressed to contain an area of 5,786 sq ft or thereabouts, for a period of five years renewable for a further two years in the terms of the annexed form of lease. It also provided for a further extension of three years. Their Lordships will refer more fully to this agreement and to the lease at a later stage. For present purposes it is sufficient to say that the monthly rent was to be $7,696 and the service-charge $2,960, totalling $10,656, payable in advance.

On 11 October 1979 there came into existence a professional drawing bearing the legend `Project: Proposed Renovation Work at Seventh Floor, Malayan Credit House for M/s MCL and JC-MPH. Drawing Title: Record of Furniture Layout`. This depicted the seventh floor as partitioned or intended to be partitioned. Their Lordships will refer to this as `the plan`.

Shortly thereafter there also came into existence three closely written pages of calculations relating to the seventh floor. The document is headed `Malayan Credit Group`. It is divided into three so-called items:

Item I refers expressly to the plan. The item is divided into three parts. Part (A) is headed `Malayan Credit Group`, followed by sub-headings descriptive of each space allocated to the credit company, ie Chairman`s Office, Chairman`s Secretary`s Office, Board Room, `TAS` Room, Rooms 6 to 10, Computer Room, Vault and General Office. These spaces are named on the plan. Against each space there is a meticulous calculation of its area in square feet. Part (B) is headed `Jack Chia-MPH Group`, followed by sub-headings descriptive of each space allocated to the Chia company, ie Rooms No 1 to 5, and General Office, again with meticulous calculations of area. Part (C) is headed `Common area shared between MC and JC-MPH Group` consisting of reception area and kitchen, again with meticulous measurements.

Item II is headed `Space at MC Group`s area utilized by JC-MPH Group`. There follow four subheadings entitled PABX room, photostat machine, Telex machine and vault, with meticulous calculations of areas. These four spaces can be seen from the plan to represent island sites within the curtilage of Pt A of Item I allocated to the credit company.

Item III is headed `Area and Rental to be borne by the MC and JC-MPH Group`. Part I is headed `Malayan Credit Group`. It sets out the total area in Item I, pt A, adds to it 50% of the common area in Item I, Pt C, and deducts the area in Item II. The result is 3,532 sq ft. This figure is then adjusted to 3,614 sq ft for a reason which does not appear, and costed at $1.80 per sq ft to produce an apportioned rent and service charge of $6,505.20 payable by the credit company. A comparable process was followed in the case of the Chia company to produce an area of 2,254 sq ft adjusted to 2,306 sq ft and likewise costed to produce an apportioned rent and service charge of $4,150.80. The two apportionments amount to $10,656 being the total of the monthly rent and service charge to be specified in the lease. These three pages of calculations were marked `Agreed: Tong Chin: 18 October 1979`. Mr Tong was the secretary of the Chia company and he also acted as an alternate director of the credit company in place of Mr Donald Chia, (a nominee of the Chia company on the board of the credit company). It will be...