Tiananmen KTV (2013) Pte Ltd v Furama Pte Ltd

• Judgment Date: 27 March 2015
• Date: 27 March 2015
• Docket Number: Suit No 68 of 2015 (Summons No 512 of 2015)
• Court: High Court (Singapore)

Tiananmen KTV (2013) Pte Ltd and others

Plaintiff

and

Furama Pte Ltd

Defendant

[2015] SGHC 83

Lee Seiu Kin J

Suit No 68 of 2015 (Summons No 512 of 2015)

High Court

Civil Procedure—Injunctions—Interlocutory injunctions—Landlord repossessing premises—Tenants applying to compel landlord to reinstate premises—Whether serious question to be tried

Landlord and Tenant—Agreements for leases—Agreement to renew leases as long as premises were not redeveloped into hotel—Whether agreements for leases caught by s 6 (d) Civil Law—Section 6 (d) Civil Law Act (Cap 43, 1994 Rev Ed)

Tort—Misrepresentation—Fraud and deceit—Whether specific performance available as remedy for tort of fraudulent misrepresentation

The plaintiffs were tenants of premises owned by the defendant (‘the Premises’). The latest tenancy agreements between the parties were due to expire on 31 January 2015. In late 2014, the defendant rejected the plaintiffs' request for lease renewal. Dissatisfied, the plaintiffs brought a suit against the defendant alleging that: (a) the defendant's refusal to renew the leases was a breach of collateral contracts between the plaintiffs and the defendant; and (b) that the defendant had made various fraudulent misrepresentations that the plaintiffs had relied on to their detriment.

The plaintiffs' claims were founded on alleged verbal representations made by Kwan Kok Hua (‘Mr Kwan’), the defendant's property manager to Karjadi Tjugito (‘Mr Karjadi’), the third plaintiff's general manager (‘the Representations’). The essence of the Representations was that the leases would continue as long as the defendant did not redevelop the Premises into a hotel. The plaintiffs claimed that the first plaintiff's costly renovation works lent credence to their claim that the defendant had made the Representations.

Subsequently, the defendant terminated the electricity supply to the Premises and caused various blockades, including scaffolding pieces, to be set up around the Premises. The plaintiffs applied for an interim injunction to restrain the defendant from, inter alia, repossessing the Premises and to compel the defendant to reinstate the Premises by restoring the electricity supply and removing the blockades.

Held, dismissing the application:

(1) The test to be applied in determining whether an interim injunction should be granted was: (a) whether there was a serious question to be tried for a permanent injunction at trial; and (b) where the balance of convenience lay: at [18] .

(2) A higher threshold had to be met in this case since the interim relief sought was effectively a mandatory injunction. The intended effect of the injunction was to disrupt the status quo, ie, to compel the defendant to restore the Premises such that the plaintiffs could resume operations pending final determination of the action: at [21] and [22] .

(3) There was no evidence of the alleged collateral contracts. The plaintiffs relied on purely oral evidence to prove the existence of the alleged collateral contracts. However, the documentary evidence showed that previous lease extensions were granted out of goodwill and on account of the long term tenancy relationship between the parties, not on the basis of the alleged collateral contracts. Furthermore, it did not lie in the mouth of the plaintiff to rely on the costly renovation works since the documentary evidence also showed that the defendant had expressly cautioned the first plaintiff against over investing in the renovation of the Premises: at [29] to [31] .

(4) As the alleged collateral contracts were essentially promises for future leases, they constituted agreements for leases. An agreement for lease was a legally enforceable promise whereby the parties bound themselves, one to grant and the other to accept, a lease at a later date. On the other hand, an instrument was construed as a lease if it contained words of present demise or words that imparted an immediate letting: at [35] and [38] .

(5) Even if the court accepted the existence of the collateral contracts, the said contracts would be rendered unenforceable by s 6 (d) of the Civil Law Act (Cap 43, 1994 Rev Ed) (‘CLA’) for want of writing. The formalities for leases were set out in s 3 of the Statute of Frauds 1676 (‘Statute of Frauds’) while the formalities for agreements for leases were governed by s 4 of the same. Since s 6 of the CLA was a re-enactment of s 4 of the Statute of Frauds, it was clear that agreements for leases fell within the ambit of s 6 of the CLA and had to comply with the requirements of writing and signature therein. Since the plaintiffs' claim was premised on alleged representations that were made orally, the collateral contracts would not be enforceable by reason of s 6 (d) of the CLA: at [34] and [36] to [38] .

(6) The plaintiffs' claim in fraudulent misrepresentation could not support its application for an interim mandatory injunction as specific performance was not available as a remedy for the tort of fraudulent misrepresentation. The object of tortious remedies was to place the victim into the position in which he would have been, if the tort had not been committed. The nature of specific performance was incompatible with this goal. If granted for a claim of fraudulent misrepresentation, an order for specific performance would be tantamount to compelling the fraudster to make good his lie, not the losses flowing from his lie: at [43] .

(7) Finally, damages were an adequate remedy for both parties as their potential losses could be appropriately quantified. However, the potential injustice to the defendant was slightly greater since there was evidence to show that the plaintiffs were in a poor financial position and their ability to compensate the defendant was in doubt: at [47] to [49] .

Chuan Hong Petrol Station Pte Ltd v Shell Singapore (Pte) Ltd [1992] 2 SLR (R) 1; [1992] 2 SLR 729 (folld)

Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130 (folld)

London and South Western Railway Co v Gomm (1882) 20 Ch D 562 (refd)

Long v Tower Hamlets London Borough Council [1998] Ch 197 (refd)

NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR (R) 565; [2008] 2 SLR 565 (folld)

Shepherd Homes Ltd v Sandham [1971] Ch 340 (refd)

Singapore Press Holdings Ltd v Brown Noel Trading Pte Ltd [1994] 3 SLR (R) 114; [1994] 3 SLR 151 (refd)

SM Integrated Transware Pte Ltd v Schenker Singapore (Pte) Ltd [2005] 2 SLR (R) 651; [2005] 2 SLR 651 (refd)

Vita Health Laboratories Pte Ltd v Pang Seng Meng [2004] 4 SLR (R) 162; [2004] 4 SLR 162 (refd)

Wishing Star Ltd v Jurong Town Corp [2008] 2 SLR (R) 909; [2008] 2 SLR 909 (refd)

Civil Law Act (Cap 43, 1999 Rev Ed) s 6 (d) (consd) ;s 6

Statute of Frauds 1676 (AD 1676 c 3) (UK) ss 3, 4

Low Chai Chong and Alvin Liong (Rodyk & Davidson LLP) for the plaintiff

Ang Cheng Hock SC and Tan Kai Liang (Allen & Gledhill LLP) for the defendant.

Lee Seiu Kin J

1 This was an application for an interim injunction to restrain the defendant, or their directors, employees or agents from:

(a) exercising any right of re-entry under the tenancy agreements between each of the plaintiffs and the defendant (‘the Tenancy Agreements’);

(b) exercising any right of reinstatement under the Tenancy Agreements;

(c) ceasing the supply of electricity to the plaintiffs' premises, and in the event that supply of electricity had already been ceased, to restore such supply with immediate effect;

(d) disrupting the lift services for the first three storeys of the Annex Block (see [3] below); and

(e) setting up scaffoldings or barriers to Units 01-01, 02-01, 03-01, or to any of the common areas in or around the Annex Block, and in the event that such scaffolding or barriers have already been set up, to take down such scaffolding or barriers with immediate effect.

2 On 3 February 2015, I dismissed the injunction application and I now give my grounds of decision.

Facts

Parties to the dispute

3 This dispute concerns premises situated at 407 Havelock Road Furama Riverfront Singapore Annex Block Singapore 169634 (‘the Annex Block’).

4 The defendant is the owner of the Furama Riverfront Hotel (‘the Riverfront Hotel’). The Annex Block is one of the buildings of the Riverfront Hotel and houses five floors of commercial space. It was initially leased to Isetan (Singapore) Ltd which operated its eponymous departmental store there. Since the early 1980 s, the Annex Block has been leased to...