Oriental Investments (SH) Pte LTD V Catalla Investments Pte LTD PDF
Oriental Investments (SH) Pte LTD V Catalla Investments Pte LTD PDF
Facts
The plaintiff tenant, Oriental Investments (SH) Pte Ltd (the Plaintiff), was at
all material times acting through and represented by its director Kevin Guay
Kim Hua (Kevin); and the defendant landlord, Catalla Investments Pte Ltd
(the Defendant), was at all material times acting through and represented by
its general manager, James Lim Keow Leng (James).
In February 2005, Kevin negotiated with James to lease an outdoor refreshment
area (the Premises) from the Defendant, for the purpose of operating food
stalls. Kevin wanted to construct a canopy over the premises and to build a fifth
kiosk (the Structures) in addition to the existing four kiosks. As regulatory
approval from the Urban Redevelopment Authority (URA) was required for
these alterations, James represented to Kevin that he would guide and help
Kevin sort out the paperwork, and to help him appoint an architect to submit
plans to obtain the necessary approval from URA. As a result of James
representations, the Plaintiff engaged a contractor to construct the Structures.
[2013] 1 SLR 1182.fm Page 1183 Thursday, April 4, 2013 4:09 PM
The Plaintiff then entered into a three-year tenancy (the First Tenancy) with
the Defendant over the Premises from 1 June 2005 to 31 May 2008.
James submitted the first application to the URA in August 2006. The
application was rejected. On 20 November 2006, James sent a letter to Kevin
stating that the Plaintiff had breached cl 3.7 of the First Tenancy and was to
remedy the breach within 21 working days, and expressly reserving the
Defendants right to terminate the First Tenancy. However, James later told
Kevin that the letter was for reference only and had no legal effect. The
Defendant did not subsequently exercise its right to terminate the First Tenancy.
On 1 October 2007, the Defendant offered the Plaintiff a renewal of the First
Tenancy (the Second Tenancy) for another two years from 1 June 2008 to 31
May 2010. Both Kevin and James signed the letter of offer for the Second
Tenancy. There was a condition precedent at para 5 of the letter of offer that the
additional drink kiosk had to be removed prior to the renewal of the First
Tenancy.
On 28 March 2008, James sent Kevin a letter stating that there was no valid
renewal of the First Tenancy, demanding the Premises to be reinstated by
31 May 2008. Kevin maintained that the Second Tenancy was valid. The
relationship between the parties soured. In April 2008, Kevin found out for the
first time from the architect that despite several applications to URA, the
requisite approval had not been obtained.
On 1 June 2008, the Defendant re-entered the Premises to take vacant possession
and dismantled the Structures. Subsequently, the Defendant sent the Plaintiff a
cheque for the sum of $1,410.96, being the remainder of the Plaintiffs security
deposit of $114,000, which the Plaintiff refused to accept. On 20 April 2010, the
Plaintiff commenced the present suit for misrepresentation; breach of contract;
breach of collateral contract; and wrongful repudiation of the Second Tenancy.
First Tenancy. The cost of removing the Structures could not be considered
damage: at [67] and [68].
(4) A necessary precondition to award rescission as a remedy for
misrepresentation was that the performance of the contract could in fact be
reversed and the representee had to be able to give back to the representor
whatever he had received under the contract. The remedy of rescission was no
longer available because the First Tenancy had already determined through the
effluxion of time: at [75].
(5) The condition in agreement to grant the Second Tenancy that the
additional drink kiosk had to be removed prior to the renewal of the First
Tenancy was a condition precedent. However, by its consistent conduct and
representations to the Plaintiff, the Defendant was estopped from relying on the
condition precedent under the doctrine of promissory estoppel. The Plaintiff
was able to show that (a) the Defendant made a clear and unequivocal promise;
(b) the Plaintiff acted in reliance on the promise; and (c) as a result of the
reliance the Plaintiff suffered detriment: at [80] and [82] to [92].
(6) There was a valid agreement between the parties for the Defendant to
grant the Plaintiff the Second Tenancy starting from 1 June 2008. By entering the
Premises and taking vacant possession on 1 June 2008, the Defendant was in
repudiatory breach of the Second Tenancy: at [95].
[Observation: The right to re-enter the demised premises and forfeit the lease or
tenancy was the most draconian weapon in the armoury of the landlord whose
tenant had committed a breach of covenant. Where a tenant wrongfully held
over, the landlord was statutorily entitled to double rent or double value at its
option for the entire period of the wrongful holding over under s 28(4) of the
Civil Law Act (Cap 43, 1999 Rev Ed). When in doubt, the landlord might first
obtain a judgment or a declaration of its rights and proceed to apply to court for
a writ of possession. In addition, ss 18 and 18A of the Conveyancing and Law of
Property Act (Cap 61, 1994 Rev Ed) prescribe stringent conditions that a
landlord had to satisfy before a tenant lost the right to relief against forfeiture. A
prudent landlord having an independent common law self-help right of
forfeiture would need to weigh the advantages of exercising this right against its
entitlement to double rent for wrongful holdovers, and the availability of court
processes to mitigate against the risk of liability for wrongful termination of the
lease: at [97] to [102].]
Case(s) referred to
Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 (refd)
Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR(R) 435; [2001] 3 SLR 405 (folld)
Persimmon Homes (South Coast) Ltd v Hall Aggregates (South Coast) Ltd [2008]
EWHC 2379 (TCC) (refd)
Legislation referred to
Civil Law Act (Cap 43, 1999 Rev Ed) s 28(4)
Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) ss 18, 18A
Misrepresentation Act (Cap 390, 1994 Rev Ed) s 2(1)
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 45 r 3, O 45 r 3(2), O 45 r 3(3)
[2013] 1 SLR 1182.fm Page 1185 Thursday, April 4, 2013 4:09 PM
Wang Tsing I Arthur (Tan Kim Seng & Partners) for the plaintiff;
Phua Cheng Sye Charles and Stephen Cheong (Tan Kok Quan Partnership) for the
defendant.
The facts
Background
Premises must be removed. These facts were not in dispute. Kevin avers
that James did not tell him about the problems, and that he only discovered
the problems when he personally approached SA Lim in April 2008, less
than two months before the termination of the First Tenancy.
7 Shortly after signing the letter of offer dated 1 October 2007, parties
started disputing whether or not the Plaintiffs purported acceptance of the
Second Tenancy was valid. The relationship between the parties
deteriorated so badly that by April 2008, the Plaintiff and the Defendant
would only communicate with each other through their lawyers. From
April to May 2008, the Plaintiff asserted that the offer for the Second
Tenancy was validly accepted and hence there was a binding tenancy for
another two years, whereas the Defendant denied the validity of the Second
Tenancy because certain condition precedents stated therein were not
fulfilled.
Plaintiffs case
The representations
further avers that at this meeting, James offered to guide and help him sort
out the paperwork, and to help him appoint an architect to submit plans to
obtain the necessary approval from URA for any alteration or addition that
had to be made to the Premises.
10 Kevins case is that at the February 2005 meeting, he told James that
he intended to construct a canopy structure over the ORA so that his
patrons could be sheltered from poor weather. Kevin avers that James
assured him that the construction of the canopy did not pose any problems
as it only involved submission of plans to the relevant authorities for
approval and that James further suggested that Kevin could construct an
additional fifth kiosk at the side of the Premises to sell drinks. As a result,
Kevin incorporated the Plaintiff company in March 2005 to contract the
First Tenancy with the Defendant.
Engaging Kingsville
11 After some negotiation, the parties agreed that the rental payable for
the First Tenancy was $32,000 a month for the first year and $38,000 a
month for the second and third years. This fact is not in dispute. Kevins
avers that after the February 2005 meeting, he arranged for his own
contractor to view the Premises for a price quotation to build the
Structures. When James heard about this, he recommended Kingsville
Pacific Pte Ltd (Kingsville) to Kevin, because Kingsville had prior
experience and would be able to secure the necessary approval from the
authorities expeditiously.
13 In late May 2005, the Plaintiff took possession of the Premises and
commenced business. Soon after, the Plaintiff received a letter from the
Building and Construction Authority (BCA) dated 2 June 2005 informing
it that the Structures did not conform to the plans which were earlier
approved by the URA and confined to four kiosks only. Kevin avers that he
was shocked to receive the letter, and that he wanted to seek clarification
directly from the URA. However, he avers that James told him that the
authorities would not entertain him because he was neither the landlord
[2013] 1 SLR 1182.fm Page 1188 Thursday, April 4, 2013 4:09 PM
nor the owner of the Premises. Kevin further avers that James told him not
to worry because the proposed plans had already been submitted to URA
for approval and that he should concentrate on running his business.
Trusting James, Kevin stopped asking him questions.
14 The First Tenancy agreement, which was to last for three years, was
executed in July 2005; and was backdated to begin on 1 June 2005 and end
on 31 May 2008. Kevin avers that, because of his limited command of the
English language, of which James was aware, James had to explain the terms
of the First Tenancy to him. Kevin further avers that James assured him
repeatedly not to worry about the details of the contract as long as he paid
the rent on time each month. James denies making such assurances.
You have failed to effect all of the terms stated above. Under this
circumstances, the Landlord may pursue to this matter further, upon giving
you a grace period of fourteen (14) days to make good all the additions and
alternations [sic] but, in view of our good working relationship, we are willing
[2013] 1 SLR 1182.fm Page 1189 Thursday, April 4, 2013 4:09 PM
to settle this matter amicably by giving you an extended grace period of twenty-
one (21) working days to make good all of the above.
[emphasis added]
17 Kevin avers that when he approached James about this letter, James
told him that the purpose of the letter was just to serve as a record and
had no real consequence. Kevin further avers that the Defendant did not
at any time during the First Tenancy act upon its reserved rights under the
20 November 2006 letter. Thereafter, nothing significant happened until
August 2007, when Kevin avers that James handed him a letter to pay the
following sums, which he duly paid to James in cash:
Item Cost
Resubmission of plans to URA $2,500
Professional fees for architect $15,000
Dear Mr Kevin
We refer to the above and are pleased to offer you renewal of the lease as
follows:
Important Note: All of the above are subjected to the following terms and
conditions
[2013] 1 SLR 1182.fm Page 1190 Thursday, April 4, 2013 4:09 PM
Thank you.
[emphasis added]
19 Kevin avers that the original 1 October 2007 letter he received was
already signed by James in ink both at the bottom of the first page and at
Signature J1. After receiving the original 1 October 2007 letter, Kevin
negotiated with James, with the result that Kevin agreed to dismantle the
fifth drinks stall and James agreed to reduce the rent from $52,000 per
month to $50,000 per month. On the other unresolved issue of URA
approval for the canopy, Kevin avers that James assured him that the
canopy merely required a resubmission of plans for approval. James then
amended in his own handwriting the relevant terms on the first page of the
original 1 October 2007 letter to reflect the agreed shorter term and
reduction in rent. James also initialled to the left of each handwritten
amendment and signed the bottom of the first page.
20 Kevin avers that he then went back to his own office, where he signed
the original 1 October 2007 letter by affixing Signature K1 and his
company stamp on each page. Kevin then made a photocopy of this original
1 October 2007 letter now duly stamped and signed by both parties on both
pages. Kevin avers that he had intended to keep the original 1 October 2007
letter himself and to hand James the photocopy that he made.
21 I pause to note that Kevin did not produce in evidence the original
1 October 2007 letter which he had retained. Instead, Kevin produced a
photocopy of the original 1 October 2007 letter signed by James and himself
(Kevins copy). James produced the photocopy of the original 1 October
2007 letter that Kevin had given to him (James copy).
Premises when the First Tenancy expired on 31 May 2008. When Kevin
approached James about the letter, James refused to discuss the matter any
further, although he allegedly stated that the Defendant had no agreement
to let the Premises to another ORA operator.
Defendants case
The witnesses
33 During the trial that lasted 5 days, the Plaintiff called the following
witnesses:
(a) Kevin;
(b) Yeo Pei Lin, Thyline (Yeo), a representative from the URA;
and
(c) Teo Kim Swa (Teo), an architect from SA Lim.
34 The Defendant called the following witnesses:
(a) James; and
(b) Richard Yong Yuen Sen (Yong), a director of Kingsville.
My findings of fact
Evaluation of parties
35 After hearing the evidence and observing the demeanour of each
witness, I find every witness, except for James, to be coherent and consistent
and I accept their evidence. In contrast, I find James to be an evasive
witness. The version of events that James recounted in his AEIC was
significantly different from the evidence that he gave during trial. I was not
impressed by the fact that James often changed his story, albeit sometimes
only slightly, when pressed for details. Therefore, I do not find James
evidence to be reliable.
37 The parties did not dispute that the construction of the Structures was
completed before an application for URA approval had been made or
before they formally entered into the First Tenancy. Kevin alleged that
James knew about his plans to construct the Structures in as early as March
2005, whereas James claimed that he only found out about the Structures in
May 2005 when he was walking by the Premises. Under cross-examination,
James initially took the position that he did not know about or notice the
construction of the canopy until May 2005, which according to him was the
earliest time that he could have found out about the works:
Q: [You said] that a tenant cannot make changes to your premises, so
my question to you was that if they constructed a fifth kiosk and a
canopy and when you noticed it, would you not tell them to either stop
the construction or, if they have completed it, to tear it down? Is that
not correct, would you not do that?
A: Yes.
Ct: If construction is going on, would you notice it and how soon would
you notice it?
Ct: Putting up a canopy across the four kiosks and to a fifth, and building a
fifth kiosk is not exactly minor alterations to the four kiosks.
A: Yes.
[emphasis added]
[2013] 1 SLR 1182.fm Page 1195 Thursday, April 4, 2013 4:09 PM
39 This is just one of the examples where James evidence in his AEIC
did not stand up to scrutiny when probed. Accordingly, I shall approach his
testimony with some caution. On the other hand, I find that Kevins
evidence is coherent because the evidence that Kevin gave throughout the
trial were relatively consistent with his AEIC. I therefore accept Kevins
evidence and find that James knew about the construction of the Structures
in as early as March 2005 and did not object to them. I infer from this fact
that the Defendant through James had impliedly consented to the
construction of the Structures right from the start, when James
recommended Kingsville to the Plaintiff.
A. Yes, certainly.
Q. [B]esides James Lim, did you speak to my clients about the second set
of plans before it was submitted?
A. No.
43 There was no reason for Teo to lie. In fact, Teo had to be subpoenaed
by the Plaintiff to give evidence in court. Teo gave evidence that after
looking at the Structures, he was already aware that it would be difficult to
obtain URA approval because it would involve pushing the limits of what
URA would usually permit and he had communicated the difficulty that he
had anticipated to James back in 2006:
A: Of course before we go in with a submission, we actually talk to URA.
We actually discuss with them. And as in all authorities, when certain
areas are grey, they will say: please submit plans and we will evaluate.
And thats what we did.
Ct: This is something that happened in 2006, so it is already done, it is
there. The canopy is there, the fifth kiosk is there, the tables are all
there. So you have seen something on the ground.
A: Yes.
Ct: And your brief is to seek approval.
A: Actually when we came in with these plans, certainly we know a lot of
things would not be allowed, but in trying to push the limits, we were
trying very hard
Q: By looking at the contents, can you give us a brief summary of what
was the response from URA as far as you can understand?
A: I think what this letter means is that our attempt to push the limit has
failed now. URA did not agree, despite all the supporting reasons we
have given.
Q: Now, when you received this letter from URA, was it communicated
by you to James Lim of Catalla Investments?
A: Well, I dont have the records, it is so long ago, but Im quite certain
that by e-mail or some means we would have communicated, me and the
client.
Ct: Communicated to whom?
A: To James Lim, that is.
[emphasis added]
[2013] 1 SLR 1182.fm Page 1197 Thursday, April 4, 2013 4:09 PM
A: I already said earlier that kiosk one to kiosk four, the plaintiffs leased
from us and he could obtain licences. The fifth kiosk he did not lease
from us and there was no tenancy agreement. How could he get the
licence?
Ct: You still havent fully explained why in the case of the fifth kiosk you
took the trouble of applying for the licence when he could have done it
himself, as well as the other four, which he did.
A: He did not get permission. He did not get the architect to do the
submission, and in NEA there was no record of the fifth kiosk.
Ct: So how does the fact that you applied for the NEA licence under your
own name enable you to get the NEA licence regardless of the
unauthorised structure? How come you can get it and he cant?
A: As for the kiosk, the NEA asked me what they were for. I told NEA
that I took the drinks from my food court to bring out to the stall for
sale, and there was no cooking and there was no drink there and then
prepared. I told NEA that I was informed that the application was in
the process, and I asked them to give me a temporary licence for them
to operate in the meantime.
When [Kevin] approached me for assistance to apply for the licence I
went down to NEA and gave a letter of undertaking, to undertake that
in case of any food poisonings our company would be responsible.
Therefore I requested [Kevin] to sign an undertaking with me to cover
back-to-back.
Ct: [S]o that is where I started my point ten minutes ago, which was, very
simply, you could do it for whatever reason and he could not do it.
Right? So you help him. Right? Then the question becomes why.
A: The kiosk has no address and he couldnt put kiosk five, and I used my
licence to undertake this licence. The kiosk has no address and I used
my licence to undertake this kiosk licence. So he is doing something
that is an offence which I have to bear the responsibility for.
[emphasis added]
47 I find that James could not explain why he had bothered to apply for
an NEA licence through Great Treat and on the Plaintiffs behalf. Even if I
were to accept James evidence that he had objected to the unapproved fifth
kiosk right from the outset and that he had made the Defendants position
known to the Plaintiff, such evidence would be contradicted by his later
application to NEA for a licence to operate a drink stall from the
unapproved fifth kiosk using Great Treat, a subsidiary of the Defendant. If
it was clear that the NEA would not issue a permit to the Plaintiff, I do not
[2013] 1 SLR 1182.fm Page 1199 Thursday, April 4, 2013 4:09 PM
find it probable that the Defendant, who was much more experienced than
the Plaintiff in these matters, would voluntarily undertake to incur
additional legal liability.
50 On the totality of the evidence, I accept the Plaintiffs case. I find that
the 20 November 2006 letter did little to inform Kevin about what was
transpiring between James and SA Lim as was suggested by James in his
AEIC. Under cross-examination, Kevin painted a different picture from the
version of events that James suggested:
Q: Okay. You said, you told the court that James said that the defendants
would be responsible for the submission of approvals for the drink
kiosk and canopy, but these three letters that I referred to you, signed
by Mr James Lim, say totally the opposite.
A: These three were written by him. I knew it. May I speak?
Ct: Sure.
A: Each time after I received this letter, I would look for him. I would ask
why had I breached the contract, but what he answered was that this
was just for reference. For these three times I get the same answer from
him.
Q: So, witness, you did not reply to the three letters to set the record
straight?
[2013] 1 SLR 1182.fm Page 1200 Thursday, April 4, 2013 4:09 PM
[emphasis added]
51 I believe Kevins evidence and I find that it is more likely than not that
James orally assured Kevin that the 20 November 2006 letter was a mere
formality and the Defendant did not intend for it to have any effect. Even
though Kevins command of the English language was not good enough for
him to understand the content of the entire letter, his receipt of the letter
was sufficient for him to speak to James about it. I believe Kevins evidence
in court that the 20 November 2006 letter made him so worried about
breaching the contract that he approached James three times on the same
issue, each time to be told by James that the 20 November 2006 letter was
written for reference only.
53 I therefore find that Kevins evidence and the parties actual conduct
are consistent with the mutual understanding that the 20 November 2006
letter was not intended to have legal effect. Kevin was not aware of the
problems with obtaining URA approval until he approached SA Lim in
April 2008, which was very late in the day considering that the First
Tenancy would terminate on 31 May 2008. I therefore reject the
Defendants reliance on the 20 November 2006 letter to show that the
Plaintiff had notice in as early as 2006 that regulatory approval from URA
was not forthcoming. I accordingly accept Kevins evidence as stated
at paras 49 to 52 of his AEIC:
49. I was shocked to receive these letters as I had thought that James had
done the submission of plans and drawings and obtained approval
from the authorities for the alterations and additions at the demised
premises. I had not at any time before the letter from BCA heard from
James that the authorities did not approve the alterations and additions
at the demised premises or that there was no approval from the
authorities for the alterations and additions at the demised premises.
[2013] 1 SLR 1182.fm Page 1201 Thursday, April 4, 2013 4:09 PM
54 I turn next to the last factual issue relating to the nature and effect of
the Inscription, Signature K2 and Signature J2 on James copy of the
1 October 2007 letter which was absent on Kevins copy. The Plaintiffs case
was simply that Signature K2 served the purpose of authenticating the
photocopied Signature K1 and not to signify agreement to the Inscription
which was not there when Kevin inscribed his Signature K2. On the other
hand, the Defendants case was that Kevin added Signature K2 and the
Inscription because he wanted to put the Second Tenancy on hold until
further notice. In James AEIC filed on 23 March 2011, he stated at para 37:
37. A second option to renew was sent on 1 October 2007 which similarly
provided for an extension of the lease for a further 2 years commencing
1 June 2008 for 4 kiosks only (the Second Option). It was, as with the First
Option, an expressed term and condition precedent for the extension of the
lease that the Unauthorised Additions had to be removed prior to the renewal
of the lease unless approval was obtained by the SLA/URA. This letter was
executed by the Plaintiffs on 10 October 2007 with a handwritten note by the
[Kevin] stating PendingOn Hold for Confirmation on both pages of the
Second Option. According to [Kevin], this was because he was undergoing
some marital problems at the material time and needed to sort them out
before he could commit fully to the Second Option. However, [Kevin] never
reverted to the Defendants as to whether the Plaintiffs would be confirming
the Second Option. The Second Option therefore was deemed to have lapsed
on 22 October 2007 as stated on the second page of the Second Option.
[emphasis added]
Q: Now, can you confirm that [the inscription was] written by you?
A: Yes.
Q: Then can I ask you to look at your affidavit, if you turn to page 19
at para 37? Do you confirm that that is incorrect?
A: That is so. He said it and I write it on his behalf and I asked him to
countersign.
Q: So you are changing what [you] have said in paragraph 37?
A: He couldnt write in English and we were not allowed him to write in
the Chinese, that is why I wrote on his behalf and asked him to
countersign.
Q: Okay. But thats not what you said in paragraph 37, yes.
A: Yes.
[emphasis added]
56 After admitting that the Inscription was written by him, James had
initially said during cross-examination that he wrote it on Kevins behalf
and on Kevins instructions, and he asked Kevin to countersign next to the
inscription with Signature K2 because Kevin could not write in English.
James initially said that the Inscription PendingON HOLD for
confirmation were Kevins exact words:
Ct: So you kept a photocopy with the PendingON HOLD for
confirmation. So did he tell you what is the meaning of PendingON
HOLD for confirmation? These are these your words or his words?
A: Written by me.
Ct: Yes, written by [you]. You say he doesnt speak English so he told
you something and then you write or what?
A: I write; I write on the photocopy.
Ct: What did you write? You write in your own words or did he tell you in
Mandarin then you translate?
A: Oh, he tell me in the English say that PendingON HOLD first, yah.
Ct: He can tell you in English but he doesnt know how to write?
A: Yah, thats right.
Ct: Did he tell you anything? He actually told you PendingON HOLD
for confirmation?
A: For confirmation.
Ct: Right, he just say that?
A: Thats right.
Ct: But did he tell you what does that mean?
A: He never [told] me the [meaning].
[2013] 1 SLR 1182.fm Page 1203 Thursday, April 4, 2013 4:09 PM
Ct: He signed the document first and then you write this in or you write
this in then he signed?
A: He said it first and I wrote it down, he then signed.
[emphasis added]
58 Shortly after, and upon further questioning, James changed his story
yet again, this time stating that the Inscription was not written in Kevins
presence when he signed the 1 October 2007 letter at James office on
10 October 2007, but was added later by him:
Q: Now, witness, you just told the Court that it was sometime between the
10th and the 21st that you spoke to [Kevin] and it was after that
conversation that you wrote PendingON HOLD for confirmation.
Is that correct?
A: Yes, it [was] mentioned by him. That is why I took out my photocopy
and wrote those words and asked him to [countersign].
Q: So it was not on the day when he gave you the copy on the 10th of
October?
A: No, it was not signed on 10th of October.
Q: So youre changing what you told the Court earlier because you told the
Court earlier on the 10th of October you met with [Kevin], he returned
the document to you and you wrote those words down. But now youre
saying that after the 10th, you met him again sometime between the
10th and the 21st and it was then that you wrote those words down. Is
that correct?
A: He took the original on the 10th of October. It could be on the same
day that he came to me again and I did not have the original with
me. Otherwise, I would have written those words on the original.
Q: So now youre saying that it may have been on the 10th of October or it
may be sometime between the 10th and the 21st when those words
were written down. Is that correct?
A: Yes. But it was written after he had signed the original on the 10th of
October. That is why his copy didnt have the second signature.
[2013] 1 SLR 1182.fm Page 1204 Thursday, April 4, 2013 4:09 PM
Ct: How do you know? All you said so far is this is the only document you
had. He didnt have the original with him because had he had the
original with him, he would have written the same thing on that
document.
A: Yes. I had only the copy, so I wrote on the copy I had. I went to my office.
I went to my office to get the copy and wrote those words on the copy.
Q: So it cannot be at the same time when he gave you the copy because you
just said that you had to go back to the office to take it. So it must have
been a different time from the time when he handed you the
document.
A: Could be on the same day, perhaps a different time.
[emphasis added]
Ct: So you can say I give you another week. I can change theIm trying
to understand why did you do what you did or why would he do
what he did. What are you trying to gain [by saying] I can extend
the time?
[2013] 1 SLR 1182.fm Page 1205 Thursday, April 4, 2013 4:09 PM
A: It was a request made by him. If I did not follow what he told me to do,
then perhaps he would think that I was not going to renew his lease and I
would change my mind.
Ct: No, no. But hes already signed the document and given it to you. So
once he signs, hes on the hook.
A: Well, he might change his mind and that is why he asked me
Ct: No, but once he has signed, I dont care whether he changes his mind,
hes on the hook. You are all businessmen. You sign document
knowing what you sign.
A: Yes, I agree.
[emphasis added]
65 The most significant obstacles for the Plaintiff are the fourth and fifth
elements. The fact of damage is an essential element of a claim based on the
tort of deceit. This can be contrasted with a claim for breach of contract
where the fact of damage is not an element of the claim, and nominal
damages can be recovered in the absence of damage or where damages
cannot be proved on a balance of probabilities. In the Plaintiffs statement
of claim (Statement of Claim) at para 67], the Plaintiff particularised the
damage that he had suffered as a result of the misrepresentations as follows:
The damage suffered by the Plaintiff included the monies invested by them in
the form of rental over the three years, sums over $300,000 paid to Kingsville
for the Works carried out, monies paid to the architect for the submissions of
application for planning permission, loss of profit etc.
contractors apart from Kingsville, he did not adduce evidence of the lower
quotations. In any event, regardless of which contractor Kevin engaged, he
would also have had to incur the cost of engaging an architect and applying
to URA for approval. These expenditures therefore cannot be considered
damage suffered by the Plaintiff as a result of James misrepresentations.
68 On the issue of the cost of removing the Structures, I note that it was
Kevin and not James who suggested building the Structures in the Premises.
Importantly, Kevin did not enter into the First Tenancy with any option to
renew the tenancy for a second term. Given that the Defendant was not
obliged to renew the tenancy, the First Tenancy would have expired on
1 June 2008 and the Plaintiff would have been obliged to remove the
Structures. Therefore, it is in my view improper to take into account the
cost of removing the Structures at the end of the tenancy.
71 In short, the First Tenancy was for a period of three years with no
option to renew. I find that even though James did not obtain regulatory
approval on the Plaintiffs behalf as he represented that he would, the
Plaintiff has not proven that it suffered damage during the First Tenancy as
a result of the misrepresentations made by James. Additionally, the Plaintiff
has not proven that the Defendant made the representations knowing that
they were false or without any genuine belief that they were true. Therefore,
the Plaintiffs claim in fraudulent misrepresentation must fail.
When you enunciate the proposition that a party has a right to rescind,
you involve in it the qualification, if the state of things is such that he
can rescind. If you are fraudulently induced to buy a cake you may
return it and get back the price; but you cannot both eat your cake and
return your cake.
[emphasis added]
76 The outcome, while surprising, is not unfair once one recognises that
the Plaintiffs cause of action against the Defendant lies not in the
Defendants misrepresentation with respect to the First Tenancy, but in the
Defendants repudiatory breach of the Second Tenancy, which I shall turn
to next.
Condition precedent
78 The Defendants counsel submitted that the agreement to grant the
Second Tenancy was not valid because the Plaintiff did not fulfil the
condition precedent at para 5 of the 1 October 2007 letter, which states:
This offer is only valid, for outdoor kiosks of 1 to 4. Additional drink kiosk
erected by the tenant during the existing tenancy period must be removed,
prior to renewal of lease.
Promissory estoppel
83 It is trite that the three elements that a promisee must prove in order
to successfully raise a promissory estoppel are: (a) the promisor made a
clear and unequivocal promise; (b) the promisee acted in reliance on the
promise; and (c) as a result of the reliance the promisee suffered detriment:
see generally The Law of Contract in Singapore at pp 229237. Additionally,
the promisee must show that it is inequitable for the promisor to resile from
his promise. The effect of the Plaintiff raising a promissory estoppel
successfully in the present case is that the Defendant would be estopped
from relying on the condition precedent in para 5, without first giving the
Plaintiff an opportunity to remedy the breach in order to satisfy the
condition precedent.
85 I find that the presence of para 6, which was drafted by the Defendant,
directly contradicts the Defendants case. If it were true, as the Defendant
maintained it was, that the onus was always with the Plaintiff to apply for
the relevant approval, the Defendant would not have bothered to insert
[2013] 1 SLR 1182.fm Page 1211 Thursday, April 4, 2013 4:09 PM
para 6 into the 1 October 2007 letter. The landlord is usually not involved in
the submission of the tenants plans or the payment of approval fees. In my
view, the existence of para 6 strongly suggests that, even as late as on
1 October 2007, the parties understanding was that the Defendant was still
responsible for applying for regulatory approval from URA on the
Plaintiffs behalf.
86 Although the Defendant had through the 20 November 2006 letter
put on record that it had objected to the Plaintiffs alterations very early on,
I believe Kevin when he said that when he approached James on the matter,
James had assured him that the 20 November 2006 letter was just to serve
as a record and had no real consequence. The 20 November 2006 letter,
therefore, was insufficient notice to the Plaintiff that the Defendant
intended to resile from its promise that it would not object to the
unapproved Structures.
87 In addition, the very fact that the Defendant did not take any steps
during the First Tenancy to enforce cl 3.7 was consistent with the Plaintiffs
case that the Defendant had intended the 20 November 2006 letter to be
only a formality. While silence or mere inaction would ordinarily not
amount to a clear and unequivocal promise, I infer the element of a clear
and unequivocal promise from the Defendants inaction following the
strongly worded 20 November 2006 letter, viewed in the light of (a) the
Defendants generally nonchalant attitude towards the unapproved
Structures; (b) James active recommendation of a contractor, Kingsville;
and also (c) the extent of James involvement in assisting the Plaintiff to
apply for approvals for the Structures.
89 This second element raises little difficulty in the present case. I find
that the Plaintiff had relied on the Defendants promise by leaving the task
of applying for regulatory approval in his hands and not actively exploring
ways to modify the Structures in order to obtain approval. I accept Teos
evidence that the additional cost to modify the canopy so that the relevant
approvals could be obtained was substantial:
A: But I think the scope of work can be quite a fair bit, because they have
to now make sure that that whole canopy is not blocking. They have to
[2013] 1 SLR 1182.fm Page 1212 Thursday, April 4, 2013 4:09 PM
segment it, you know, and then the height has to be changed. So there
is quite a bit of structural work. They probably had to dismantle it, cut
it down, weld it, you know, to bring it to the controlled height. So some
of these works are quite extensive, and perhaps that is the reason why it
didnt proceed, you know. Because that is the only way that URA will
approve it, and we had to pursue that along that line. But whether the
client towards the end will do it, you know, that is beyond me
90 I also find that, had Kevin known the problems faced by SA Lim in
obtaining approval, he would have been willing to, and would have
incurred at least part of the modification cost in order to continue carrying
on business on the Premises. Kevin did not do so earlier because he had
relied on James promise. Under cross-examination, Kevin evinced an
intention to regularise the set-up of his ORA and an intention to explore
methods of apportioning the losses resulting from James misrepresentation
that he would obtain approval for the fifth kiosk and the canopy after
installing them:
A. I discussed with [James] that I agree to remove the drinks kiosk, but
subsequently he told me to remove the entire canopy, so I asked him,
Who is going to pay for the charges? I already spent more than
$300,000 to erect this. Do you think it is reasonable for me to it was
you who told me that I could obtain the approval. After three years you
told me otherwise. About two years plus. He told me that it cannot be
approved. Do you think I can accept it?
93 I agree with the Plaintiff that the estoppel raised in Hughes would
apply and the Defendant is estopped from relying on the Plaintiffs non-
fulfilment of the condition precedent in para 5 unless the Defendant gives
the Plaintiff a reasonable amount of time to rectify the breach.
(4) Conclusion
94 From the foregoing analysis, I find that the Plaintiff in the present
case has successfully raised the shield of promissory estoppel by proving the
three elements of representation, reliance and detriment. It is clear from all
my findings that the Defendants course of conduct throughout the First
Tenancy gave the Plaintiff the impression, and rightfully so, that the
Defendant would not enforce cl 3.7 in the First Tenancy. The Defendant
had even represented that it would help the Plaintiff apply for regulatory
approval.
was breached, and what damage the Plaintiff suffered as a result. The claim
in breach of collateral contract is therefore bound to fail.
Observations
97 This case has brought into focus the consequences of a landlords
exercise of its right to re-enter premises in order to forfeit a lease which is
subsequently found to have been unlawful. In this regard, Kevin Gray and
Susan Francis Gray in Elements of Land Law (Oxford University Press,
5th Ed, 2009) observe at p 470:
The right to re-enter the demised premises and forfeit the lease or tenancy is
the most draconian weapon in the armoury of the landlord whose tenant has
committed a breach of covenant. Most written leases contain [a] forfeiture
clause As will appear later, the exercise of the landlords right of re-entry is
heavily qualified by the courts discretion to grant relief against forfeiture.
r 3(2)) which will only be granted the court is satisfied that every person in
actual possession of the immovable property has received notice sufficient
to enable him to apply to court for relief (O 45 r 3(3)).
101 Sections 18 and 18A of the Conveyancing and Law of Property Act
(Cap 61, 1994 Rev Ed) prescribe stringent conditions that a landlord must
satisfy before a tenant loses the right to relief against forfeiture. The authors
of Tan Sook Yees Principles of Land Law (LexisNexis, 3rd Ed, 2009) explain
these conditions at p 498:
In order to forfeit the lease, the landlord would have to satisfy the following
requirements: (a) the landlord must demonstrate that the tenants breach of
covenant entitles the landlord to re-enter and forfeit the lease; (b) there has
not been waiver of the breach by the landlord; (c) the landlord must satisfy all
the statutory requirements governing forfeiture including the relevant notice
provisions before re-entry; and (d) exercise the power of re-entry by either
physically re-entering the premises or serving the tenant with a writ of
possession. The tenant can still apply to the Court to ask for relief against
forfeiture. [emphasis added]
Conclusion
103 In the light of the above analysis, I find that the Plaintiff succeeds on
its cause of action based on the Defendants wrongful repudiation of the
Second Tenancy, as set out in paras 26 and 28 of the Plaintiffs Statement of
Claim:
28. By reason of the matters as set out in the preceding paragraphs, the
Plaintiffs have lost the benefit of the Lease as renewed and lost the
revenue/profits they would otherwise have received under it and have
thereby suffered loss and damage.
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