People's Park Development (Pte) Ltd v Lian Ya (Pte) Ltd

• Jurisdiction: Singapore
• Judge: A V Winslow J
• Judgment Date: 20 March 1974
• Neutral Citation: [1974] SGHC 1
• Docket Number: Suit No 2397 of 1972
• Date: 20 March 1974
• Published date: 19 September 2003
• Year: 1974
• Plaintiff Counsel: Harry Lee Wee and Lee Han Yang (Lee Woo & Partners)
• Citation: [1974] SGHC 1
• Defendant Counsel: LAJ Smith (LAJ Smith)
• Court: High Court (Singapore)
• Subject Matter: Effect of premium on claim for arrears of rent,Supply and maintenance of air-conditioning, cleaning and lighting,Payment of deposit,Requirement for service charges,Landlord and Tenant,Rent and service charges,Whether premium,Section 2 Premiums on Leases Act (Cap 280, 1970 Rev Ed)

By a writ dated 28 October 1972 the plaintiffs claim:

(1) arrears of rent in the sum of $55,604;

(2) possession of premises consisting of two units collectively known as Room 272 used as a store-cum-office and a shop respectively, on the first floor of the building known as People`s Park Complex in New Bridge Road demised to the defendants for three years under two leases dated 7 and 16 December 1970 respectively; and

(3) mesne profits.

The first lease which was in respect of the store was for three years commencing 1 September 1970 whereby the tenant undertook to pay to the landlord a deposit of two years` rent and a further sum of $180 once every month on and after 1 September 1970.

The second lease also commenced on 1 September 1970 and by cl 1 thereof the defendants had to pay firstly, a monthly rent of $6,468 for use of the shop as a departmental store. In addition, they were to pay an additional sum of $1,848 per month as service charges in respect of the supply and maintenance of air-conditioning as well as for the cleaning, lighting and maintenance of wash basins, lavatories and passages provided on the first floor, making a grand total of $8,316 per month in monthly payments for rent and service charges. Under the same clause the defendants were required to make a deposit of 24 months` rent and a further sum of $8,316 once every month on and after 1 September 1970.

These clauses appear at paras 30 and 35 of the agreed bundle (AB).

It may be useful to add at this stage that in both leases the landlord was required to reinstate the premises to their original condition on termination of these leases at the tenant`s cost which, was to be deducted from the deposits of 24 months` rent aforesaid.

It is common ground that the premises are not rent-controlled.

It is the contention of the defendants that the lease of 16 December 1970 by requiring payment for the supply and maintenance of airconditioning and for service charges relating to cleaning, lighting and maintenance of wash basins, etc provided for a consideration other than rent, due notice whereof was not duly given as required by s 2 of the Premiums on Leases Act (Cap 280, 1970 Ed) and that, accordingly, the lease was illegal and the plaintiffs are not entitled to recover the sums claimed for either rent or service charges.

They further contend that the leases were not registered as required by the Conveyancing and Law of Property Act (Cap 268, 1970 Ed).

Furthermore, the defendants contend that the provision for the payment of 24 months` rent as deposit as stated in cl 1 of the leases was made as a condition for the letting of the premises and amounted to the requiring of a consideration within the meaning of the same section of the Premiums on Leases Act and that failure to give due notice thereof similarly rendered the leases and the recovery of rent illegal.

It is further pleaded that, from the month of October 1971 onwards, the plaintiffs reduced the supply of air-conditioning to the premises to a level which required the installation of fans by the defendants to render the place sufficiently habitable and usable for the purposes for which it was intended.

It is further contended that charges made in respect of cleaning, lighting and maintaining wash basins and so on were excessive and bore no relation to the actual costs thereof and that such charges together with the charges for airconditioning were payments received otherwise than by way of rent for the purpose of evading property tax which would otherwise have been payable on all charges made and that therefore the lease was illegal and the plaintiffs precluded from recovering the rent payable.

It is also contended that, as no notice had been given under s 18(1) of the Conveyancing and Law of Property Act, action for forfeiture of the leases is premature.

A further amendment to the defence during the trial alleges that the requirement by the plaintiffs that the defendants should install ducting for airconditioning, a false ceiling, wiring and flooring and, in respect of the store, flooring and wiring at the defendants` expense was the requirement of a consideration within the meaning of s 2 of the Premiums on Leases Act of which the plaintiffs had failed to give notice and that the leases are accordingly illegal.

In their reply, the plaintiffs refer to paras 4 and 8 of the defence and deny that any sums collected in respect of service charges or by way of deposit amount to the collection of any consideration under the Premiums on Leases Act and that, even if they are such premiums, the plaintiffs contend that they are nonetheless entitled to the remedies claimed.

Before dealing with the questions of law involved, it may be convenient for me to state my findings on the facts herein as follows:

(a) The plaintiffs` manager, Lim Woon Kiat, gave a simple, straightforward story to the effect that he negotiated the leases with Lau Song Hwai and Lau Cher Hong who represented the defendants. He allowed the defendants to enter into occupation of Unit 272 on 15 July 1970 giving them a month and a half in which to settle down before commencing the leases which were eventually signed in December 1970 showing the date of commencement of such leases as 1 September 1970.

(b) The leases in question expired on 31 August 1973 just before the conclusion of the hearing of this case and, in the course of the evidence, it transpired that Unit 272 is now being occupied by a number of other people who are stall-holders with, as is set out later, the signboard of Hup Sheng (Pte) Ltd adorning the entrance thereto in substitution for that of the defendants.

(c) At the end of 1970, this witness said that he received AB40 from the Property Tax Division of the Inland Revenue Department to which he replied at AB42 on 11 February 1971 giving the particulars required by that Division including those relating to tenancies of units in the Podium Block of the People`s Park Complex of which Unit 272 was one. The plaintiffs were subsequently assessed to tax as at AB56 dated 30 August 1972. It should be remembered that, at the time when the defendants went into occupation of Unit 272, the entire building project at People`s Park Complex had not been completed and that certificates of fitness had not yet been obtained. Counsel for the defendants did not pursue this point having raised it in cross-examination and it appears that temporary occupation licences were in fact granted by the Assistant Director of Buildings. It would also appear from the evidence of the architect, who was called as a witness for the plaintiffs, that since the Tower Block had not yet been completed he believed that no certificate of fitness would be issued until after such completion.

(d) Considerable time was spent in the cross-examination of the plaintiffs` manager towards showing that the service charges contained in the lease were excessive, that in fact the services did not measure up to minimum standards of cleanliness and efficiency, that the defendants were compelled to undertake various responsibilities relating to internal wiring, lighting, ducting and a false ceiling at their own expense before they were granted the leases and that, in the circumstances, the plaintiffs had acted illegally so as to justify the defendants in refusing to pay what they had agreed in the leases to pay.

(e) This witness said that airconditioning was centralised and that there was a regular supply of cool air to the premises but that any internal ducting to distribute such air within the premises demised was entirely a matter for the defendants and that if the defendants had told the plaintiffs that they did not want airconditioning the plaintiffs would not have wanted a tenant like that. In re-examination, this witness made it quite clear that it would not be possible to work in a unit such as Unit 272 without airconditioning. In fact all the units had to have airconditioning, as there was no other form of ventilation.

(f) Furthermore, with regard to cleaning, lighting and maintenance of wash basins and lavatories and so on, this witness again said that if potential tenants did not want to pay for such services, the plaintiffs would not be interested in giving people like the defendants a lease. It will be observed that these matters of which complaint has been made are matters, the terms of which are incorporated in the leases and are not matters extraneous to such leases. The plaintiffs were not demanding additional payments for nonexistent services and supplies as a condition before they would grant a lease nor did they require such payments over and above whatever the lease contained.

(g) There was a further complaint that the deposits required to be made in respect of rent were illegal and amounted to premiums under the Act in question. As has earlier been pointed out, there was provision in the lease for the landlord to deduct from the deposits at the tenant`s cost any expenses incurred in restoring the premises at the end of the lease to their former condition. These deposits would finally be returned to the tenant less such expenses. This witness made it quite clear that the deposit required covered only the rent of the premises in question and not other matters like service charges and the supply of airconditioning. If people were not prepared to pay such deposits in respect of rent he would not want such people as tenants.

(h) The architect for the plaintiffs also gave evidence in the course of which he pointed out that airconditioning, ie the supply of cool air was provided up to one of the perimeter walls of the premises in question and that tenants would know this. Furthermore, he said that if the tenant wanted to have airconditioning he must have ducting inside the premises in order to obtain a good distribution of cool air inside the unit in question. The architect also gave...