[1996] SGCA 8

In the Court of Appeal of the Republic of Singapore

[1996] SGCA 8

CA 146/1994, 65/1995

Between

Jubilee Electronics Pte Ltd

… Appellant

And

Tai Wah Garments & Knitting Factory Pte Ltd

… Respondent

grounds of decision

Land — Adverse possession; Land — Adverse possession; Landlord and Tenant — Duration of tenancy — Periodic tenancies; Landlord and Tenant — Assignment of leases

This judgment is subject to final editorial corrections approved by the court and/or redaction pursuant to the publisher’s duty in compliance with the law, for publication in LawNet and/or the Singapore Law Reports.

Jubilee Electronics Pte Ltd and Others v Tai Wah Garments & Knitting Factory Pte Ltd

[1996] SGCA 8

CA 146/1994, 65/1995
Chao Hick Tin J; Karthigesu JA; L P Thean JA
05 March 1996

1 CHAO HICK TIN J

2 Cur Adv Vult

3 This is an appeal against a decision of the High Court which reversed a decision of a district court declaring that the plaintiffs` (owners`) claim for the recovery of the possession of the property at 406 North Bridge Road had been barred by virtue of adverse possession on the part of the second and fourth defendants.

8 Chi Iu Year.` On 12 December 1969, M/s Tang & Tan forwarded on behalf of Tan Kheng Guan another cheque for $440, being rent for `the 11th and 12th Moons, Chi Iu Year.`

1 The commencing date of your occupying the said premises, and if there is any tenancy agreement, please furnish same to us for our inspection.

(2) From whom did you take over the tenancy. (3) Any rent receipts or previous rent receipts, for our inspection. (4) Whom did you tender rent before. (5) Any other tenants occupying the premises ... .

We refer to our letter dated 19 December 1969 and to our letter dated 13 February 1970 to your client upon which we have not received any reply.

We act for Jubilee Electronic Pte Ltd and would refer to your AR Registered letter of 17 November to Jubilee Records Trading Co whose business and assets were taken over by our clients.

26 District court decision

28 High Court decision

29 [1995] 3 SLR 399 , the High Court felt that the district court in coming to its decision had failed to take into account one important aspect of the matter. The plaintiffs` case was that they had always considered the first defendant to be the contractual tenant until the contractual tenancy was terminated for a breach of the terms of the tenancy agreement. Plaintiffs could take no action against the other defendants while the contractual tenancy between the plaintiffs and the first defendant was in existence. Thus the default judgment obtained against the first defendant for the recovery of possession of the property was crucial and proper consideration should be given to it. The learned judge said:

The fourth defendant unquestionably had actual possession of the property for more than 12 years before the commencement of this suit against him and the other defendants. The plaintiffs, however, at all times considered and accepted only the first defendant as the tenant. Until the contractual tenancy was terminated as a prelude and precondition to the filing of the suit for possession under the Control of Rent Act, it continued to exist. Accordingly, while that contractual tenancy between the plaintiffs and the first defendant existed, the plaintiffs could not take any action for possession against any of the defendants. The legal possession by the first defendant and the actual possession by the other defendants was lawful and was not adverse against plaintiffs. In particular, the plaintiffs could take no action against the fourth defendant as he derived his right of possession from the first defendant. His possession could not be adverse to the plaintiffs: see Jessamine Investment Co v Schwartz[1978] QB 264.

31 Appeal

34 Defendants` arguments

37 Jessamine Investment Co v Schwartz [1978] QB 264 because the fact situation there was quite different. In Jessamine there was a fixed term of 99-year lease and thus the court held that the sub-tenant`s possession could only be adverse against the holder of the 99-year lease and not against the freeholder. However, in our case, by virtue of s 13(2), and for the purposes of that Act, the tenancy of the first defendant is deemed determined. The fact that the plaintiffs did not formally determine it contractually is immaterial.

38 Plaintiffs` case

42 Does s 13(2) and (3) apply

(2) A tenancy from year to year or other period, without a lease in writing, shall, for the purposes of this Act, be deemed to be determined at the expiration of the first year or other period, and accordingly the right of action of the person entitled to the land subject to the tenancy shall be deemed to have accrued at the date of such determination.

(3) Where any rent has subsequently to the determination of any tenancy been received in respect of the tenancy, the right of action shall be deemed to have accrued on the date of the last receipt of rent.

44 Jessamine Investment Co v Schwartz [1978] QB 264; Lodge v City of Wakefield Metropolitan [1995] 38 EG 136; and Moses v Lovegrove [1952] 2 QB 533 per Romer LJ at p 543. Therefore, to the extent that the learned judge seemed to think that even in the case of a periodic tenancy within the meaning of s 13(2) something more than mere continuation of possession by the tenant without paying rent is necessary to establish animus possidendi , and thus adverse possession, we would respectfully differ from him.

46 Validity of assignment

48 Williams v Earle (1868) LR 3 QB 739. Hill and Redman on the Law of Landlord and Tenant (1994 Ed) states at p 1149 as follows:

A lessee for years or a tenant from year to year or other term has, in the absence of provision to the contrary, the right to assign his term or tenancy, or to create sub-leases or subtenancies; but a restraint on assignment or underletting is valid, and such a restraint may be created either by a condition making the lease void in those events, or by a covenant not to assign or underlet. The usual form of restriction is a covenant, breach of which may give rise to forfeiture of the lease. There are three commonly found categories of such covenants. One is an absolute covenant not to assign or underlet. The second is a covenant not to assign or underlet without the consent of the landlord. The third is a covenant not to assign or underlet without the consent of the landlord which consent is not to be unreasonably withheld. The second and third categories are usually called qualified covenants. Whichever form the restraint takes, an assignment in breach of the condition or covenant is not void. It is effectual to vest the term in the assignee, subject to the right of the landlord to forfeit the lease.

49 Old Grovebury Manor Farm Ltd v Seymour (W) Plant Sales & Hire Ltd (No 2) [1979] 1 WLR 1397; [1979] 3 All ER 504 a lease of business premises contained a covenant not to assign without the lessor`s written consent. In breach of that covenant the second defendant executed an assignment of the remainder of the term of the lease to the first defendant. The plaintiff served a notice under s 146 of the Law of Property Act 1925 on the assignor prior to commencing forfeiture proceedings. The Court of Appeal held that the notice should have been served on the assignee who was the lessee and, as it was not so served, the writ was commenced prematurely. This was what Lord Russell of Killowen said on the effect of the assignment in breach of the covenant (at pp 1398-1399):

Although that was without the consent of the plaintiff it is, in my judgment, perfectly plain that the assignment operated to vest the remainder of the term in the first defendant. The fact that it was done by the second defendant in breach of his covenant not to do it cannot in any way affect that situation as a matter of law. From 23 September, therefore, the owner of the term, whose relationship by privity of estate with the plaintiff was one of lessor and lessee, became the first defendant.

51 Governors of Peabody Donation Fund v Higgins [1983] 3 All ER 122 there was an absolute prohibition on assignment. The tenant, assigned the tenancy to the daughter. The issue before the court was what impact Ch II of the Housing Act 1980 had on a tenancy granted nine years before the enactment of the 1980 Act which tenancy had a clause containing an absolute prohibition of assignment. The law on assignment in breach of covenant as stated in Old Grovebury Manor Farm was approved when Cumming-Bruce LJ said (at pp 126-127):

If the ratio of the judgment of Lord Russell, with which Browne LJ agreed, cannot be distinguished from the instant case, then the law to be applied is as follows. Although there was a prohibition on assignment, the effect of the purported assignment was that the interest of the assignor validly passed to the assignee, and if the landlords wished to terminate it their duty then was to serve a s 146 notice on the assignee and proceed against the assignee for forfeiture on the grounds of breach of a covenant in the lease. It was submitted before us that that case could be distinguished because, on the facts, it was dealing with a lease for a term certain of three years and in his judgment Lord Russell described the interest of the lessee as a property right.

52 Old Grovebury Manor Farm case as applying in the instant case and although the assignment was in breach of a condition of the lease, its effect was to transfer the father`s interest to the daughter.

53 Nagappan v Chen Chi Ya [1949] MLJ 271 where the Court of Appeal seemed to affirm what was set out in an earlier edition of Hill and Redman .

55 Twelve years` continuous possession

57 Willis v Earl Howe [1893] 2 Ch 545 this very point was addressed by Kay LJ when he said (at p 553):

It was suggested in reply that, as the alleged brother was not really the brother of George, his taking possession formed a new departure, and that the statute would begin to run from that entry, and that the previous possession of George was not material. The effect of that would be that if a series of occupiers, not claiming under one another, kept out the real owner for 100 years, time would only run against him from the moment when the last of such occupiers entered into possession. I am of the opinion that this is not the law. A continuous adverse possession for the statutory period, though by a succession of persons not claiming under one another, does, in my opinion, bar the true owner.

58 Willis v Earl Howe

59 Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR, a decision of the New South Wales Court of Appeal. The whole question was succinctly set out and explained by Bowen CJ in Exchequer in the following passages (at p 476):

When a person enters into adverse possession, and so long as he continues in possession before the expiry of the statutory period, he has title to the land in the nature of a fee simple, good against all the world except the true owner, and his title may be conveyed or devised to, or devolve upon, another person: Asher v Whitlock (1865) LR 1 QB 1; Perry v Clissold [1907] AC 73; Wheeler v Baldwin (1955) 94 CLR 98; Allen v Roughley (1955) 94 CLR 98. Where there has been a series of persons in adverse possession by virtue of successive transmissions of the inchoate possessory title for a total period of 20 years or any extended period required by the Act, s 34 will operate to extinguish the true owner`s title. At that point of time the last successor being then in possession will acquire a title in fee simple to the land good against all the world including the true owner: Allen v Roughley; see generally Lightwood, The Time Limit on Actions (1909) p 118; Voumard, The Sale of Land(2nd Ed) p 431.

60 Willis v Earl Howe [1893] 2 Ch 545; Allen v Roughley; Salter v Clarke (1904) 4 SR (NSW) 280. It is emphasized that possession by successive trespassers must be continuous to have this effect. An abandonment by one adverse possessor followed by a break in time when the land is not in possession of some person adversely to the true owner will, as we have seen, restore the true owner`s title to its pristine force.

61 Megarry and Wade on the Law of Real Property (5th Ed), the learned authors state (at p 1036):

... a squatter has a title based on his own possession, and this title is good against everyone except the true owner. Accordingly, if a squatter who has not barred the true owner sells the land he can give the purchaser a right to the land which is as good as his own. The same applies to devises, gifts or other dispositions by the squatter, and to devolution on his intestacy: in each case the person taking the squatter`s interest canadd the squatter`s period of possession to his own. Thus if X, who has occupied A`s land for eight years, sells the land to Y, A will be barred after Y has held the land for a further four years.

62 Halsbury`s Laws of England (4th Ed), at para 779 where a similar principle is stated:

If a series of trespassers, adverse to one another and to the rightful owner, take and keep possession of land continuously in succession for various periods, each less than, but exceeding in the whole, 12 years, the rightful owner is barred. The earliest possessor within the 12 years has the best title.

64 Procedural point

66 Reconcilability of two appeal cases

67 Lee Martin & Anor v Wama bte Buang [1994] 3 SLR 689 and Soon Peng Yam v Maimon bte Ahmad (CA 30/94) (unreported), both concerning adverse possession, are irreconcilable.

68 Wama , the appellants were the personal representatives of the estate of the registered owner of a piece of land. The respondent`s father, Buang, had been a ground tenant since 1945, paying a monthly rent of $2. The respondent was born on the land in 1958 and had lived there all her life. In 1965 Buang stopped paying rent; the circumstances would appear to suggest it was pursuant to some arrangement with the owner. The registered owner died in 1969. In 1976 Buang died. Respondent continued to occupy the land until 1990 when she started proceedings to claim for adverse possession for the period from 1976. The High Court held that she was in adverse possession from 1976 and that the registered owners` title had been extinguished. The judge found that Buang was a tenant at one time but ceased to be so before the registered owner`s death. The Court of Appeal held that after 1965, Buang`s occupation was by permission or tolerance. The court emphasized that for there to be adverse possession there must be an ouster. Where possession at its inception was permissive, it was not possible to put an end to that possession by a secret intention in the mind of the person inpossession. The court held that the position of the respondent, who continued occupying the land, was no different from that of her father.

69 Maimon , the respondent`s mother stayed at the premises and paid a ground rent of $1 per month to the appellant, the paper owner. The respondent was then living with her mother. In April 1978 the respondent`s mother passed away and she continued to stay there but paying no rent. In September 1978 the respondent moved out of the house and rented the premises to other people. In 1984 the appellant gave notice purporting to terminate her mother`s tenancy with effect from 30 April 1984. However, no further action was taken by the appellant and no rent was paid by the respondent either. The High Court held, on an action taken by the respondent as the administratrix of her mother`s estate, that from April 1978 the respondent was, by virtue of s 13(2) of the Limitation Act, in adverse possession upon the expiry of the period to which the last rent was paid. It rejected the appellant`s assertion that the respondent was merely a licensee. The appeal to the Court of Appeal was dismissed. The Court of Appeal also allowed the respondent to amend the pleadings so that the respondent claimed adverse possession in her personal capacity rather than as the administratrix of her mother`s estate.

70 Maimon and Wama, the crucial difference lies in the fact that in Wama the Court of Appeal found that Buang ceased to pay rent pursuant to permission, which was absent in Maimon . There was further no ouster. In Maimon , on appeal, it was not seriously disputed by the appellant that the possession of the respondent was adverse to the right of the paper owner. There was clear evidence of ouster; the respondent even leased out the premises and collected rent. One of the main points taken (the other is not relevant) was whether there could be adverse possession by the respondent when she was not in possession and had rented out the premises. To that question the Court of Appeal answered in the affirmative.

71 Orders

74 Appeals dismissed; orders varied.

Chao Hick Tin J
Karthigesu JA
L P Thean JA

Morris John, Philip Lam and Anil Sachdev (Drew & Napier) for the appellants
Harry Elias and Yap Teong Liang (Harry Elias & Pnrs) for the respondents