Tan Swee Eng v Assoland Pte Ltd

• Judge: L P Thean J
• Judgment Date: 23 April 1987
• Neutral Citation: [1987] SGHC 10
• Citation: [1987] SGHC 10
• Defendant Counsel: Joseph Tan (Joseph Tan & Associates)
• Published date: 19 September 2003
• Plaintiff Counsel: Peter Chua (Peter Chua Sobaran & Partners)
• Date: 23 April 1987
• Docket Number: District Court Appeal No 20 of 1985
• Court: High Court (Singapore)
• Subject Matter: Whether tenancy or licence created,Principles applicable,Landlord and Tenant,Agreement to grant 'licence' to occupy premises for grocery store,Creation of tenancy,Contract

Cur Adv Vult

This is an appeal from the judgment of the district court allowing the claim by the plaintiffs for vacant possession of the premises known as 71, Upper East Coast Road, Singapore (the said premises) on the ground that the defendant was a licensee of the said premises and the licence had been duly determined by a notice dated 30 January 1981.

The plaintiffs acquired the said premises in 1973 from one of their directors, Tan Kim Hin (Tan), but the legal title to the property was not transferred to them until 9 June 1981. At the time when the plaintiffs acquired the said premises, one Lim Joo Song (Lim) was a tenant thereof, carrying on thereat the business of a grocery shop. In November 1976, Lim wanted to vacate the said premises and asked for consent from the plaintiffs to transfer his tenancy to another person. The plaintiffs refused to give such consent. However, they were prepared to allow another person to occupy the said premises on payment of an annual sum and on condition that when they required the same for redevelopment the occupier would vacate and deliver to them possession of the said premises. Lim then introduced the defendant to the plaintiffs and negotiation took place between the defendant and the plaintiffs` director, Ngo Soo Hiong (PW1). PW1 said that it was agreed that she would take a licence of the said premises on a temporary basis, and they both instructed a solicitor to prepare an agreement to give effect to that intention.

On 24 November 1976, two agreements were signed by the parties concerned. One agreement was made between Lim and the defendant (the sale agreement) whereby Lim agreed to sell to the defendant for a sum of $18,000 the business of a grocery shop then carried on by him at the said premises together with all the trade fixtures, implements, furniture and tables used in connection with the said business. The other agreement, expressed as a licence agreement, was made between Tan, who was then the registered proprietor of the said premises, and the defendant (the licence agreement). By the licence agreement Tan granted to the defendant `a licence for a period as stated in cl 2 of this agreement for the purpose of a grocery shop`. Under cl 2 the `licence` was expressed to be for an indefinite period until such time as the plaintiffs required the said premises for redevelopment or renovation. The consideration payable by the defendant under the agreement is $300 per annum payable in advance. There is contained in cl 7 the following provision:

It is hereby agreed between the parties hereto that this agreement constitutes a licence and shall be in no way be construed or conferred a tenancy upon the licensee and that possession of the said shop premises is retained by the licensor subject however to the rights created by this licence agreement.

The other terms are, in substance, rather similar to those normally found in a tenancy agreement, except that the words, `licensor`, `licensee` and `licence` were adopted in lieu of `landlord`, `tenant` and `tenancy`. The sum of $18,000 was paid to Lim on the signing of the sale agreement and the defendant took over the business from Lim together with all the things and articles purchased. The defendant was let into possession of the said premises, and since then the defendant has been in possession of the said premises, carrying on thereat the business of a grocery shop. On 30 January 1981, the plaintiffs caused to be given to the defendant four months` notice terminating the `licence` and offering to pay, on an ex gratis basis, a sum of $5,000 as removal expenses in terms of the licence agreement. The defendant refused to comply with the notice and the plaintiffs instituted the present proceedings against the defendant claiming for vacant possession of the said premises.

The defendant resisted the claim, contending that she was the tenant of the said premises; that she took an assignment of the business carried on at the said premises and also the tenancy of the said premises, and that the licence agreement was, in fact and in law, a tenancy agreement. She claimed that the said premises were premises within the Control of Rent Act and claimed the protection of the Act.

It is common ground that the premises are premises within the meaning of the Control of Rent Act and the only issue before the District Court was whether the defendant was a tenant or a licensee of the said premises. If a tenancy was created then the claim of the plaintiffs would fail, as there were no grounds for making an order for recovery of possession against the defendant. The learned district judge held that only a licence was granted to the defendant; in particular, he found (i) that the defendant understood the terms and conditions of the licence agreement and that she knew that the plaintiffs were not prepared to grant her a tenancy of the said premises and (ii) that she had agreed to accept a licence only. He concluded his findings as follows:

The land had been purchased by the plaintiffs for purposes of development. When the existing tenant was about to quit, they did not want to develop the land just then because of the unsatisfactory market situation. Because they felt that the premises should not be left vacant they were prepared to allow it to be occupied by someone who could look after the premises for them. They, however, did not want to have to encounter difficulties in evicting the occupier when they were ready to develop, Under these circumstances they accordingly felt that a tenancy should not be given. To ensure that the incoming occupier would not have any misconception of her rights, they got a lawyer to draft an agreement spelling out the conditions under which the occupier would be occupying the premises and the terms and conditions were fully explained by the lawyer. The defendant had agreed to an of the terms and conditions.

It is clear that the parties professed in the licence...