Singapore Woodcraft Manufacturing Company (Pte) Ltd v Mok Ah Sai

• Jurisdiction: Singapore
• Judgment Date: 23 April 1979
• Date: 23 April 1979
• Docket Number: Suit No 3348 of 1976
• Court: High Court (Singapore)

Singapore Woodcraft Manufacturing Co (Pte) Ltd

Plaintiff

and

Mok Ah Sai

Defendant

[1979] SGHC 37

Choor Singh J

Suit No 3348 of 1976

High Court

Contract–Frustration–Whether agency agreement or disguised subtenancy–Effect of compulsory acquisition of tenanted premises on subtenancy–Whether contract for subtenancy frustrated when notice of acquisition served–Section 2 (1) Frustrated Contracts Act (Cap 33, 1970 Rev Ed)–Sections 16 (1) and 18 Land Acquisition Act (Cap 272, 1970 Rev Ed)–Control of Rent Act (Cap 266, 1970 Rev Ed)–Statutory Interpretation–Construction of statute–Legal effect of notice of possession under Land Acquisition Act (Cap 272, 1970 Rev Ed)–Meaning of “encumbrances” in Land Acquisition Act (Cap 272, 1970 Rev Ed)–Sections 16 and 18 Land Acquisition Act (Cap 272, 1970 Rev Ed)

The plaintiff sought from the defendant the refund of a deposit paid under a contract and all moneys paid under the contract as from 23 May 1975 to 31 December 1977. The plaintiff claimed that it was entitled to the refund as the contract had been frustrated. The defendant counterclaimed for 2 % commission on the sale of the plaintiff's goods or $9,000 for every six months, whichever is higher from 1 January 1976.

The contract was an agreement in writing which described the plaintiff and defendant as “principal” and “agent” respectively. Under the agreement, the defendant permitted the plaintiff to display its goods for sale at the specified premises in return for a commission of 2 % on all goods sold and delivered to and paid for by customers to be calculated every six months or if the amount of commission payable for the same period fell below the sum of $9,000, the plaintiff was to make it up to that sum. The agreement was for ten years and did not provide for earlier termination.

The plaintiff occupied the whole of the first floor and three-quarters of the ground floor of the specified premises and had exclusive possession of these areas. The remaining quarter portion of the ground floor was occupied by the defendant who carried on his own business there. The defendant took no part in the business of the plaintiff and apart from providing the use of the specified premises, he did not carry out any of the other acts as required of him under the agreement. Throughout the whole period up to 31 December 1975, the defendant received $1,500 per month from the plaintiff and there was no examination of the plaintiff's accounts and no calculation of commission. The plaintiff employed its own staff, made sales itself, delivered goods sold by it, kept all accounts and installed and paid for its telephone.

The defendant held a tenancy of the first floor and ground floor of the specified premises and the rent he paid to the owners of the specified premises was $215 per month. The Control of Rent Act (Cap 266, 1970 Rev Ed) (“the Control of Rent Act”) applied to the specified premises. The specified premises were acquired under the Land Acquisition Act (Cap 272, 1970 Rev Ed) (“the Land Acquisition Act”) and the Collector of Land Revenue served on the owners notice of possession on 23 May 1975. The Collector of Land Revenue took physical possession of the specified premises on 31 December 1977. At issue was whether the contract was frustrated on the giving of the notice of possession or only upon physical possession of the specified premises.

Held, allowing the plaintiff's claim and dismissing the defendant's counterclaim:

(1) The defendant did not perform any act from which the relationship of principal and agent can be inferred. The agreement which the defendant claimed to be an agency agreement was a device to conceal the...