Malayan Railway Administration v Station Hotel Company (A Firm)

• Jurisdiction: Singapore
• Judgment Date: 27 August 1992
• Date: 27 August 1992
• Docket Number: Suit No 7946 of 1984
• Court: High Court (Singapore)

Malayan Railway Administration

Plaintiff

and

Station Hotel Co

Defendant

[1992] SGHC 228

Goh Joon Seng J

Suit No 7946 of 1984

High Court

Landlord and Tenant–Termination of leases–Rent-controlled premises–Subletting of premises by tenant–Tenant received rents in excess of the recoverable rent–Whether landlord waived breach by accepting rent after learning of the breach–Whether landlord could recover mesne profits and possession of premises–Sections 15 (1) (g) and 17 Control of Rent Act (Cap 58, 1985 Rev Ed)

The plaintiff (“MRA”) was the owner of a railway station which was subject to the Control of Rent Act (Cap 58, 1985 Rev Ed) (“the Act”). Situated within the railway station was a hotel with a bar and restaurant (“the premises”). The defendant (“SHC”) leased the premises from MRA and entered into occupation pending finalisation of the lease. SHC then sublet the bar and restaurant to Chin Station Cocktail Lounge Pte Ltd (“Chin”) at $4,000 per month from November 1979 to January 1980. The rental was later raised to $4,500 per month from February 1980 to December 1982.

In January 1980, MRA received information that SHC had sublet part of the premises without MRA's permission and wrote to SHC stating that it had sublet the premises whilst the lease had not been finalised and requested particulars of the subletting. On 10 January 1980, SHC wrote to MRA denying any subletting. A five-year lease was eventually signed on 7 March 1981 commencing 1 January 1978 at $1,250 per month. It was also agreed that the rental would increase annually.

On 2 March 1983, Chin informed MRA that the premises was sublet to it for $4,000 per month from November 1979 to January 1980 and thereafter at $4,500 per month until the termination of the sub-tenancy on 31 December 1982. MRA continued to accept rents from SHC until July 1983. On 22 June 1983, MRA served on SHC a notice to quit requiring it to deliver vacant possession of the premises by 31 July 1983. SHC refused to comply.

On 6 November 1984, MRA commenced proceedings for recovery of possession and mesne profits on the ground that SHC sublet the premises and received rents in excess of 110% of the recoverable rent, under s 15 (1) (g) of the Act. SHC argued that even if there was a breach of s 15 (1) (g) of the Act, the breach was waived by MRA by its acceptance of rent up to 31 July 1983, after its receipt of the letter from Chin. It was further argued that under s 17 of the Act, MRA was required to terminate its tenancy according to the law. SHC's position was that this had not been done as the notice to quit was tainted with illegality on the ground that MRA had been collecting rent in excess of the standard rent. SHC also counterclaimed for recovery of payments in excess of the standard rent.

Held, allowing the claim and counterclaim:

(1) The standard rent and the recoverable rent paid by SHC was $1,953.13 per month for the premises comprising the bar and restaurant and 34 rooms. SHC received $4,500 per month from subletting of the bar and restaurant portion alone. Thus, SHC had received rents in excess of 110% of the recoverable rent and had breached s 15 (1) (g) of the Act. As such, it lost the protection of the Act. No waiver of the breach arose from MRA's acceptance of rent up to July 1983: at [18], [20] and [24].

(2) Mesne profits were damages for trespass but as the premises were rent-controlled premises, MRA could not re-let the premises for any sum in excess of the standard rent. MRA was accordingly awarded mesne profits at $1,953.13 per month from 1 August 1983 to the date of delivery of vacant possession of the premises: at [31].

(3) SHC was entitled to payments in excess of the standard rent. The present proceedings were commenced on 6 November 1984 but the counterclaim was filed on 5 February 1985. MRA had to refund the amounts received by them in excess of $1,953.13 per month within six years prior to the date of commencement of the present action by virtue of s 31 of the Limitation Act (Cap 163, 1985 Rev Ed). The amount of mesne profits payable to MRA would be set off against the excess rent to be refunded to SHC: at [32].

Koh Chee Chong v Chop Fook On [1957] MLJ 197 (distd)

Lim Kim Kee v Kin Aik Pte Ltd [1983-1984] SLR (R) 573; [1984-1985] SLR 430 (refd)

Lim Tai Tin v Services Ltd [1965] 1 MLJ 91 (refd)

Oversea-Chinese Banking Corp Ltd v Eastern Auto Co Ltd [1961] MLJ 300 (folld)

SEAC Co v Ang Ah Bak [1965-1967] SLR (R) 462; [1965-1968] SLR 162 (folld)

Syed Ahmed Al-Junied v Reshty [1968-1970] SLR (R) 402; [1969-1971] SLR 7 (folld)

Teo Ee Hup v Syed Hussain Alkaff [1981-1982] SLR (R) 384; [1982-1983] SLR 267 (distd)

Control of Rent Act (Cap 58,1985 Rev Ed)ss 15 (1) (g), 17 (consd)

Control of Rent Ordinance (Cap 242, 1955 Rev Ed)s 15 (1) (a)

Limitation Act (Cap 163,1985 Rev Ed)s 31 (consd)

Railway Ordinance (M'sia) s 4 (1)

Mohan Pillay (Drew & Napier) for the plaintiff

B T Tan (B T Tan & Co) for the defendant.

Judgment reserved.

Goh Joon Seng J

1 The plaintiffs are a body corporate by virtue of s 4 (1) of the Railway Ordinance of the laws of the Federation of Malaysia.

2 The plaintiffs are the owners of the land being Lot 209, Town Subdivision 23 with the building thereon known as railway station (“the railway station”), Keppel Road, Singapore. The railway station was built before 7 September 1947 and is therefore subject to the Control of Rent Act (Cap 58) (“the Act”).

3 Situated within the railway station is a hotel with a bar and restaurant known as the Station Hotel (“the demised premises”).

4 From 1 January 1978, the defendants went into occupation of the demised premises pending finalisation of a lease from the plaintiffs.

5 From November 1979 to January 1980, the bar and restaurant portion of the demised premises was sublet by the defendants to Chin Station Cocktail Lounge Pte Ltd at $4,000 per month.

6 From February 1980 to December 1982, the rental for the bar and restaurant paid by Chin Station Cocktail Lounge Pte Ltd was raised to $4,500 per month.

7 Sometime in January 1980 the plaintiffs received information that the defendants had sublet part of the demised premises without their permission. The plaintiffs therefore wrote to the defendants on 3 January 1980 stating that the defendants had sublet part of the demised premises whilst the lease had not been finalised and requested for particulars of the subletting.

8 On 10 January 1980, the defendants replied denying any subletting and stating that they had only employed “a firm of managers to assist” them to run the bar and restaurant. This explanation was apparently accepted by the plaintiffs.

9 After further negotiations, the lease was eventually signed on 7 March 1981 for a term of five years commencing on 1 January 1978 (“the lease”). The rents payable under the lease were as follows:

(a) from 1 January 1978 to 30 September 1979: $1,250 per month;

(b) for the month of October 1979: $4,387.80;

(c) for November and December 1979: $4,866.60 per month;

(d) for the month of January 1980: $5,631.10; and

(e) from February 1980 to 31 December 1982: $7,500 per month.

10 In addition the defendants paid by way of reimbursement to the plaintiffs the sum of $703.13 per month for property tax apportioned to the demised premises. As property tax is payable by the plaintiffs as owners, I regard this reimbursement of $703.13 as part of the monthly rent paid by the defendants. Accordingly the rent payable for the period 1 January 1978 to 30 September...