Teo Siew Peng and Another v Neo Hock Pheng and Others

• Judge: Lai Siu Chiu J
• Judgment Date: 21 September 1998
• Neutral Citation: [1998] SGHC 312
• Citation: [1998] SGHC 312
• Defendant Counsel: Lim Khoon (Lim Hua Yong & Co),Andy Chiok (BT Tan & Co)
• Published date: 19 September 2003
• Plaintiff Counsel: Willy Tay and Joanna Tan (Chor Pee & Partners)
• Date: 21 September 1998
• Docket Number: Originating Summons No 302 of 1997
• Court: High Court (Singapore)
• Subject Matter: Provision in licence prohibiting sale of property,Proprietary estoppel,Sale of land,Whether void for offending rule against inalienability,Whether mere contractual licence an interest in land,Whether licence itself gives rise to equitable estoppel,Plea of proprietary estoppel without particulars of representation or conduct,Fraud,Striking out,Licence to use strip of land,Land,Effect of,Contractual,Equity,ss 38, 39 [now ss 46, 47] Land Titles Act (Cap 157),Whether any exceptions to indefeasibility of title,Estoppel,Whether sale of property a sham to deprive defendants of benefit of licence,Licences,s 104(1) [now s 115(1)] Land Titles Act (Cap 157),Whether disclosing reasonable defence,registration,Registration of title,Civil Procedure,Whether licence binding on subsequent purchaser,Pleadings

Judgment:

LAI SIU CHIU J

This action commenced as an originating summons under O 81 of the Rules of Supreme Court (RSC) 1996 for summary possession of part of the above property situated on the East Coast of Singapore (the property) occupied by the defendants. As it became apparent that issues of fraud were being raised by the defendants, the Deputy Registrar made an order on 11 April 1997 that the action continue as a writ action. In addition, the defendants also obtained leave on 8 April 1997 to issue a third party notice against the developers of the property Guan Soon Development Pte Ltd (the third party).

2. The facts

The first and second plaintiffs (who are wife and husband respectively) are the registered proprietors of the property, which shares a common boundary with the rear boundaries of No 32 Jalan Pelatok and No 30 Jalan Pelatok. The first and second defendants are the registered proprietors of No 32 Jalan Pelatok and the third to fifth defendants are the registered proprietors of No 30 Jalan Pelatok. Prior to the first and second defendants, the first to fourth defendants were the registered proprietors of No 32 Jalan Pelatok. The first to fourth defendants are siblings and the fifth defendant is their father. The third party is a private exempt company in the business of, inter alia, real estate development; it is essentially a family company.

3.This subject property, namely, Lot 3739 Mk 28 known as No 27 Jalan Kuang Singapore, together with Lot No 1715 Mk 28 known as No 32 Jalan Pelatok (No 32 Jalan Pelatok) and Lot 1716 Mk 28 known as No 30 Jalan Pelatok (No 30 Jalan Pelatok), are part of a 200 unit residential development of the third party known as `Eastview Gardens` (Eastview); the development comprised three phases, the property being part of the last phase, whilst the latter two properties were part of Phase 2.

4.It is not disputed that the defendants were and are in occupation of a strip of land that fell within the boundaries of the property (the encroached land) as indicated in a plan attached to and served with the statement of claim. A substantial portion of the encroachment is attributable to the entire rear boundary of No 32 Jalan Pelatok and the rest is attributable to part of the rear boundary of No 30 Jalan Pelatok. This encroachment was first discovered sometime in early 1983, as indicated by a letter from M/s How Huai Hoon (How Huai Hoon), registered surveyors, to the third party dated 5 February 1983.

5.As a result of this discovery, a licence agreement was entered into between the first to fourth defendants and the third party on 16 September 1883 (the agreement). The relevant portions of the agreement provided:

1 The owners [the first to fourth defendants] are seized of the land at Lot 1715 Mukim XXVIII together with the house standing therein and known as No 32 Jalan Pelatok, Singapore, (hereinafter referred to as `the property`) which was developed by the said developers [the third party].

2 It has been found that the existing fencing at the rear side of the said property is encroaching onto the adjoining land belonging to the developers as shown and edged in red in Sch 2 annexed hereto (width of the land encroached upon is approximately 2.5 m) (hereinafter referred to as `the licensed land`).

3 The developers have agreed to grant unto the owners full licence and liberty to use the said licensed land as if the licence is granted in perpetuity.

Now this agreement witnesseth as follows:

1 In consideration of the developers` agreement in cl 3 above, the owners have agreed to allow the developers to enter the property for the purposes of connecting pipes onto the sewerage system and to do other work incidental thereto beneath the surface in and around the existing sewerage manhole situated in the property.

8 The developers shall not to sell [sic] the said licensed land to any person firm or company and shall also exclude the same from forming part of any other land to be sold.

The defendants averred that, in reliance on the agreement, they incurred expenditure in making improvements to the encroached land. This expenditure consisted of the costs of digging a well, the turfing of and the planting of trees and shrubs, on the encroached land.

6.More than nine years later, on 3 May 1993, the shareholders of the third party passed a resolution allowing each of its shareholders, directors as well as the managing director, to purchase one unit from a list of 28 (including the property), of the last remaining unsold properties in Phase 3 of Eastview. Along with seven other shareholders, the second plaintiff took up this offer and purchased No 27 Jalan Kuang. The third party entered into a sale and purchase agreement with both plaintiffs on 2 July 1993; the transfer was subsequently registered on 16 November 1993. Throughout, the defendants continued to occupy the encroached land.

7.The exact time and circumstances under which the plaintiffs discovered or had knowledge of the encroachment and consequently the agreement, are in dispute. Sometime in early 1994, the first plaintiff requested Teo Lay Swee (TLS), who was at all material times the managing director of the third party, to take steps to recover the encroached land from the defendants on her behalf. Subsequently, the plaintiffs and TLS met with the defendants at No 32 Jalan Pelatok to discuss the encroachment. This meeting (which took place some time before 16 March 1994) and subsequent correspondence between the parties` solicitors, failed to resolve the matter.

8.The plaintiffs therefore commenced the present action seeking possession of the encroached land from the defendants. The defendants resisted the action alleging that, the plaintiffs are bound by the agreement, they had conspired with the directors of the third party to procure the third party`s breach of the agreement by selling the whole of No 27 Jalan Kuang and, that the plaintiffs had conspired fraudulently with the third party to deprive the defendants of the benefit of the agreement. Under the third party proceedings, the defendants sought a declaration that the sale of the property by the third party to the plaintiffs was and is null and void, alternatively, damages for breach of the agreement.

9. The application for striking out

As a preliminary application prior to the commencement of trial, the plaintiffs applied to strike out para 12 of the amended defence on the ground that it disclosed no reasonable defence. Paragraph 12 was included via an amendment to the defence and is as follows:

Further and/or alternatively, in the event that the sale of 27 Jalan Kuang by the third party to the plaintiffs is upheld, the defendants aver that said licence in perpetuity granted to them by the third party under the agreement is a contractual licence fortified by an estoppel and that accordingly, the plaintiffs are equally bound by the said licence.

Particulars of estoppel

Since the agreement and in expectation of being entitled to make use of the licenced land for as long as they so wished, the defendants have incurred expenditure in carrying out various improvements to the licenced land and planting trees and shrubs on the licenced land. Additionally, the defendants have also incurred the expense in digging a well on the licenced land.

10.In response to the plaintiffs` request for further and better particulars of the estoppel pleaded in para 12 of the defence, the defendants particularised as follows:

3.1 Whether the expectation of being entitled to make use of the licenced land for as long as the defendants so wished (`the expectation`) was based on a representation from the plaintiffs.

Ans: No. The defendants aver that the expectation was based on the fact that the agreement dated 16 September 1983 between the first to fourth defendants on the one part and the third party on the other had granted the defendants a licence in perpetuity to occupy the licenced land for good consideration.

3.6 If the expectation was not based on representation, whether it was based or derived from conduct on the part of the plaintiffs.

Ans: The representation was not based on the conduct of the plaintiffs.

11.It is trite law that estoppel by representation requires a representation of an existing fact (see Spencer Bower & Turner`s The Law Relating to Estoppel by Representation [1977] at p 31 para 26). The defendants failed to particularise any such representation under para 12 of the defence. Indeed, it was clear that they were relying solely on the agreement itself to found any such representation. A perusal of the agreement indicates that the only relevant representation made by the third party was that the first to fourth defendants were to be granted a licence over the encroached land as if in perpetuity. This was clearly in the nature of a promise or an assurance rather than of an existing fact. Accordingly, the defendants were seeking to invoke the doctrine of proprietary estoppel which can be based on an assurance as to future as well as present rights, over land (see Gray`s Elements of Land Law (2nd Ed, 1993) at p 327). However, a successful claim of estoppel involves a showing of three (3) elements: (1) an assurance, (2) a reliance, and (3) a detriment (see Gray at p 325).

12.In this respect, no assurance emanating from the representations or conduct of the plaintiffs was pleaded; rather the agreement itself is said to give rise to the estoppel. Under the rubric of proprietary estoppel, the defendants are therefore arguing that their detrimental reliance on the agreement raised in their favour an equity against the third party which is to be satisfied by conferring on them an irrevocable licence over the encroached land. This equity, although inchoate until crystallised by a relevant order of court, is equally binding on the plaintiffs as on the third party`s successors in title. The short answer to this claim is, that it has been...