1 Cur Adv Vult

2 The defendants were the developers of a flatted factory building (`the building`) known as Mun Hean Building on Lots 243-2 and 244-2 Mukim 17 at No 53 Kim Keat Road, Singapore. The development was one to which the Sale of Commercial Properties Act 1979 (`the Act`) and the Sale of Commercial Properties Rules 1979 (`the Rules`) applied.

3 By an agreement dated 8 October 1980 (`agreement I`) the defendants agreed to sell to the plaintiffs and the plaintiffs agreed to purchase from the defendants the mezzanine floor subsequently known as #02-01 and #02-02 of the building with a floor area of 7,830sq ft. The material terms of agreement I were:

4 Miss Jeanny Ng (`Miss Ng`), an advocate and solicitor, acted for both parties. She also acted for the plaintiffs in their proposed mortgage of the said property to DBS Finance Ltd (`DBS Finance`) to secure a loan of $1.5m. For that purpose, on 13 January 1981 she forwarded all relevant documents including agreement I to DBS Finance. Thereafter DBS Finance`s solicitors drew Miss Ng`s attention to the fact that agreement I was not in accordance with the prescribed form and did not comply with the requirements of the Act in that, inter alia, it did not contain a date for service by the defendants of the notice to complete. With the agreement of both parties, Miss Ng thereupon prepared a second agreement (`agreement II`) in accordance with the prescribed form and the parties executed agreement II on 25 February 1981 but backdated it to 8 October 1980 as it was meant to replace agreement I of 8 October 1980.

5 So far as is material agreement II differed from agreement I as follows:

6 Although agreement II did not contain any stipulation on the date of issue of TOL and for possession of the property to be delivered to the plaintiffs, the defendants undertook to deliver to the plaintiffs possession of the property sold by 7 May 1981, failing which they would pay damages for delay. This undertaking was confirmed in writing by Miss Ng in her letter of 25 February 1981 addressed to the plaintiffs. The letter which was confirmed by the plaintiffs read:

7 At all material times, the plaintiffs were represented by their directors, Lim Eng Hwa, Pang Ah Keuw, Lim Meow Hwa and William Tan Boon Toon (`William Tan`). Miss Ng dealt mainly with William Tan who was the plaintiffs` executive director and the only one who could converse in English. The defendants` managing director, Mok Wing Kee, represented the defendants.

8 As the prescribed form required a completion date to be inserted in cl 14(2) (whatever that date might be), 31 December 1983 was inserted by Miss Ng as the completion date somewhat arbitrarily. On this William Tan confirmed in evidence as follows:

9 William Tan is corroborated by Miss Ng:

10 On the evidence there is no doubt that had the problems of the possible delay in the strata subdivision, application for and issue of subsidiary strata certificates of title caused by the phase II project been better appreciated, Miss Ng would no doubt have inserted a completion date well after 31 December 1983. Such later date would have been equally acceptable to William Tan on behalf of the plaintiffs and Mok Wing Kee on behalf of the defendants.

11 In the events that followed, TOL was not issued until 27 July 1981. In compliance with the letter of 25 February 1981, the defendants paid to the plaintiffs the sum of $12,742.40 for the delay in the issue of TOL calculated from 7 May 1981 according to Miss Ng`s letter of 25 February 1981.

12 On 12 October 1983, some ten weeks before the defendants were to give notice to complete under cl 14 of agreement II, one Tan Han Yong acquired the whole of the issued share capital of the plaintiffs.

13 On 4 December 1985 the defendants through Miss Ng gave notice to complete enclosing a completion statement for:

14 The plaintiffs through Tan Han Yong thereupon instructed Tan Kim Seng & Co to act for them in place of Miss Ng.

15 A claim for liquidated damages amounting to $184,587.86 for delay in the service of the notice to complete was made. The plaintiffs also denied that the defendants were entitled to payment of $38,939.20 for the excess area and the sum of $5,455.75 for the maintenance and service charges. The plaintiffs subsequently paid the said sum of $5,455.75 pursuant to an order of court in Suit No 7702 of 1986. In the meantime as litigation became imminent, Miss Ng withdrew from acting for either party.

16 On 17 February 1986 the plaintiffs filed proceedings by way of originating summons claiming, inter alia, for the following reliefs:

17 The originating summons came up for hearing before Punch Coomaraswamy J on 15 January 1987 who ordered the originating summons continued as if the action had been begun by writ pursuant to O 28 r 8 of the Rules of the Supreme Court 1970. He also gave leave for pleadings by way of points of claim, defence and reply to be filed.

18 The matter eventually came up for hearing before Grimberg JC. The defendants denied the plaintiffs` claim relying on promissory estoppel and waiver on the part of the plaintiffs. At the hearing the defendants abandoned their claim for payment for the excess area. By order of court dated 27 February 1989 the learned trial judge granted the plaintiffs` claim for liquidated damages in the sum of $184,587.86 with interest at 9%pa from 18 December 1985 until judgment or payment [see [1989] 2 MLJ 80 ]. The defendants were also ordered to complete the sale and purchase and make payment to the plaintiffs of the sum of $59,307.86 after setting off the balance purchase price of $125,280 against the liquidated damages of $184,587.86. The learned trial judge also awarded the plaintiffs costs and other consequential reliefs. The defendants` counterclaim for $125,280 being balance of the purchase price and interest on the said sum of $125,280 was dismissed with costs.

19 In his grounds of decision the learned trial judge, after reviewing the evidence, stated at p 85:

20 Were the defendants, as a consequence of that promise or assurance, induced to alter their position to their detriment?

21 The reason why a date for completion had been omitted from agreement I was because phase II of the defendants` project was contemplated and there was no telling, in October 1980, when it would be possible to amalgamate the lots upon which Phases I and II were to be constructed for the purposes of procuring individual titles. That remained the position in February 1981. By their promise or assurance that the 31 December 1983 completion date would not bind the defendants, the plaintiffs induced the defendants to act upon it and to alter their position by proceeding upon the basis that nothing stood in the way of phase II, in the form of a deadline for giving the plaintiffs title to the property. Mr Mok Wing Kee said:

22 The learned judicial commissioner therefore found, first, that the plaintiffs by their promise or assurance had held out that they would not hold the defendants to the completion date of 31 December 1983 and, secondly, the defendants acted upon such promise or assurance and altered their position by proceeding with the phase II development. Such conduct on the part of the plaintiffs gave rise to an estoppel against them, but the learned judicial commissioner held that such estoppel could not succeed because, first, it was defeated by virtue of the Act and the Rules and by the wider considerations of public policy, and secondly, the doctrine of estoppel cannot be invoked to render valid a transaction which the legislature has, on grounds of general public policy, enacted to be invalid. He said at pp 86-87:

23 I am also obliged to reject the plea of estoppel, and the related plea of waiver, because it is a general principle that the doctrine of estoppel `cannot be invoked to render valid a transaction which the legislature has, on grounds of general public policy, enacted ... to be invalid ... `: 16 Halsbury`s Laws of England para 1515.

24 In Bradshaw v McMullan [1920] 2 IR 412, the House of Lords held that a contract was void as being contrary to a provision of the Local Government (Ireland) Act 1898. The defendant relied upon certain events as giving rise to an estoppel. The plea was rejected. In the course of his speech, Lord Shaw of Dunfermline said:

25 It is this part of the decision of the learned trial judge on which the appeal has been directed. It is convenient at this stage to set out the provisions of s 5 of the Act and rr 6 and 7 of the Rules:

26 Rules 6 and 7:

27 Agreement II was in accordance with Form B. All that Form B requires is the insertion of a date (not which date) by which the notice to complete shall be given by the vendor, failing which the purchaser shall be entitled to liquidated damages. The Rules do not prescribe a formula by which the date for giving notice to complete is to be determined. That is left to the parties; they are at liberty to agree to any date. That date agreed upon is meant for the protection of the purchaser, and it must equally be open to the purchaser who has agreed to that date to agree to extend the date or by conduct to represent to the vendor that he would not hold the vendor to the date as agreed upon, and such holding out, if acted upon to the detriment of the vendor must be binding on the purchaser. Bradshaw v McMullan 1 is not applicable here. There, by a proposal in writing and subsequently accepted, McMullan agreed to take from Bradshaw certain business premises for a term of 31 years at the yearly rent of o240 ` including all rates and taxes as at present existing or assessed on the said premises `. McMullan also agreed to pay 5U7ths of all future or increased taxation caused by the alterations and improvements stipulated for in the agreement.

28 In an action for rent by Bradshaw, McMullan claimed credit for the amount of poor-rate paid by him on the ground that the o240 yearly rent was inclusive of taxes. However s 52 of the Local Government (Ireland) Act 1898 provided as follows:

29 As the provision of s 52 had the effect of throwing upon the lessee the burden of ultimately paying the poor-rate the agreement by the lessor to bear poor-rate was contrary to s 52 and by s 52(2) specifically rendered void and as such there could not be any estoppel. Viscount Finlay at p 414 stated:

30 We find that the decision in Elsden & Anor v Pick [1980] 3 All ER 235[1980] 1 WLR 898 is of assistance on the matter before us. In that case, the plaintiffs were the landlords of two farms of which the defendant was the tenant. Section 23(1) of the Agricultural Holdings Act 1948 provided that ` a notice to quit an agricultural holding or part of an agricultural holding shall (notwithstanding any provision to the contrary in the contract of tenancy of the holding) be invalid if it purports to terminate the tenancy before the expiration of twelve months from the end of the then current year of tenancy `. By the terms of the lease the requisite notice was one year`s notice in writing expiring on 6 April in any year. In 1977 the tenant got into financial difficulties and on 4 April he approached the landlords` agent and warned him that he might have to quit the farms. The agent, being sympathetic to the tenant`s plight, suggested that the tenant take some more time to make a final decision and that if the tenant decided within the next five days to terminate either or both tenancies he would accept a notice to quit backdated to 4 April. The tenant agreed and having reconsidered, decided to quit one farm only. Accordingly on 7 April he gave the agent a notice to quit backdated to 4 April to expire on 5 April 1978. The agent accepted the notice. The tenant later changed his mind and requested that his notice be disregarded. The landlords refused and brought proceedings for recovery of possession. The tenant contended that the notice was invalid since it did not comply with s 23(1) of the Agricultural Holdings Act in that it purported ` to terminate the tenancy before the expiration of twelve months from the end of the then current year of the tenancy `. The judge upheld this contention on the ground that s 23(1) was a mandatory provision and dismissed the landlords` claim. The landlords appealed to the Court of Appeal. The Court of Appeal allowed the appeal holding that on the true construction of s 23(1) of the Agricultural Holdings Act which merely made notices which did not comply with its provisions `invalid` and not `unlawful`, a party to a tenancy agreement was not prevented from waiving his strict right to insist on a notice to quit of at least 12 months` duration and accepting the termination of the tenancy before the expiration of that period. The suggestion of the landlords` agent that the notice to quit be backdated and his acceptance of the notice despite the fact that the notice thereby given was less than 12 months was an effective waiver by the landlords of the requirements regarding length of notice. In giving his judgment, Shaw LJ said at p 240:

31 I therefore turn back to the section itself in order to examine its language and to deduce its clear tenor. It is clear that it is designed principally to protect the tenant farmer from peremptory or unduly prejudicial ejectment on the part of the landlord. Nonetheless it serves also to protect a landlord from the abandonment of a tenancy in circumstances which may cause a discontinuity in cultivation or a lapse from proper standards of husbandry. Thus the time for the ending of a tenancy is a matter of common interest both to a landlord and to his tenant. It may suit them both to determine a tenancy without waiting for what may be as long as nearly two years to bring it to an end. No statute could have so absurd an intention as to constrain a landlord and a tenant of an agricultural holding to remain bound in that relationship at a time when neither desires that it should endure. If they are in accord, can it matter whether they demonstrate that accord by an agreement to surrender or an agreement to accept short notice?

32 I have read s 23(1); the first matter to observe is that the subsection uses the word `invalid` and not `unlawful`. Thus there is no penal prohibition; it is simply that provision in the tenancy agreement for a shorter notice than 12 months is nugatory. So also any variation of a tenancy agreement in relation to an agricultural holding which purports to make a shorter period of notice than 12 months effective will fail of its purpose. This produces the situation that there can be no operative provision whereby notice can in prospect be made effective if it is less than 12 months; but a notice is of course a unilateral act available to one party or the other without the ad hoc consent of the party to whom the notice is given. There seems to me to be no impediment created by s 23(1) to the party in receipt of a notice to quit to waive his strict right that the notice should expire on a particular day or that it should be of a particular duration. A contractual provision which inures for the benefit of a party can be waived by that party albeit that his right to that benefit is reinforced by statute. There may be circumstances which might qualify this situation, as where an element of public interest is involved, but in such a case one would expect the statutory provision to speak in terms of illegality (thus: `It shall be unlawful`) rather than of mere invalidity.

33 Agreement II was in compliance with the Act and the Rules; it contained a completion date in cl 14(2). By Rule 7 ` no amendment, deletion or alteration ` to the agreement for sale ` referred to in rules 5 and 6 ` shall be made without the approval of the Controller of Housing. The parties here have not made any ` amendment, deletion or alteration ` to agreement II. What transpired here was that the plaintiffs had by their conduct assured the defendants that the latter would not be held to the completion date as stipulated in agreement II. That date, as we have said, was for the protection of the plaintiffs and they are at liberty to vary or extend it or waive compliance thereof by the defendants. Neither the Act nor the Rules make such variation, extension or waiver illegal or void.

34 The learned trial judge has found on the evidence before him that the plaintiffs` conduct gave rise to a promise or assurance on their part that they would not hold the defendants to the completion date of 31 December 1983 and that the defendants had, acting on this assurance or promise, altered their position, that is, they had proceeded with the phase II development which resulted in their delay in completion. We agree with this finding of fact. The plaintiffs are therefore estopped from insisting that the defendants adhere to the date of completion as stipulated in cl 14(2). We do not agree that the effect of such estoppel would defeat the intentions of Parliament and give rise to an illegal contract and by virtue of s 5 is void. In our opinion, on the facts, the plea of estoppel is sustainable.

35 Accordingly we allow the appeal. The orders of the court below are set aside and we allow the defendants` counterclaim for $125,280 being balance of the purchase price and interest thereon at 12%pa from 19 December 1985 to the date of judgment in accordance with cl 6 of agreement II. We also award the defendants costs of this appeal and costs in the court below.

36 Outcome: