Nick's Notes - Property

-
N i c h o l a s T o n g - P r o p e r t y L a w - 2 0 1 2

Nicks
Property Law
Exam Notes
2012

- Page 1 of 71 -
- N i c h o l a s T o n g - P r o p e r t y L a w - 2 0 1 2

TENANCY AND PAID DEPOSITS ............................... 20
Table of Contents ASSIGNMENT ......................................................... 20
SUB-LEASE ............................................................. 22
FIXTURES & CHATTELS .......................................... 4 MISCELLANEOUS .................................................... 23
CONTRACT (RIGHT OF 3P) ACT ............................... 23
FIXTURE VS CHATTELS .............................................. 4
PRIOR BREACH (TO ASSIGNMENT) ......................... 23
(1) DEGREE OF ANNEXATION ................................... 4
REMEDIES .............................................................. 24
(2) OBJECT OF ANNEXATION .................................... 4
1. L'S COVENANTS + T'S REMEDIES ........................ 24
EXPRESS COVENANTS ......................................... 24
CO-OWNERSHIP ................................................... 5 IMPLIED COVENANTS ......................................... 24
DETERMINE: JT OR TIC? ............................................ 5 TENANT'S REMEDIES IN CASE OF L'S BREACH .... 24
INITIAL TRANSFER/CONVEYANCE ............................ 5 2. T'S COVENANTS + L'S REMEDIES ........................ 24
EXPRESS COVENANTS ......................................... 24
NON-LEGAL OWNERS CLAIM .................................. 5
LANDLORD'S REMEDIES ..................................... 25
FACTORS :: EQUITY'S INTERVENTION ...................... 5
S6: DETERMINATION OF LEASE .............................. 27
PRESUMPTIONS .................................................... 5

UNEQUAL CONTRIBUTIONS .................................. 6
MATRIMONIAL CONTEXT ..................................... 6 LICENCES ............................................................ 28
PARTNERSHIP ASSETS / BUSINESS CONTEXT ........ 7
NATURE OF LICENCES ............................................. 28
JOINT MORTGAGEE .............................................. 7
1. BARE LICENCES ................................................... 28
RENT OBLIGATIONS? ................................................ 7
2. LICENCES COUPLED WITH A GRANT ................... 28
CONVERT: JT TIC .................................................. 7
3. CONTRACTUAL LICENCE** ................................. 28
1. LAW: UNILATERAL DECLARATION ........................ 7
REVOCABILITY .................................................... 28
2. EQUITY: SEVERANCE ............................................ 7
IMPACT ON THIRD PARTIES ................................ 29
1. OPERATING UPON HIS OWN SHARE ................. 7
ASSIGNABILITY .................................................... 30
2. MUTUAL CONDUCT .......................................... 8
4. LICENCE COUPLED WITH EQUITY ....................... 30
3. MUTUAL AGREEMENT ...................................... 8

TERMINATION OF JT/TIC .......................................... 9
1. VOLUNTARY SALE ................................................. 9 PROPRIETARY ESTOPPEL ..................................... 31
2. PARTITION ............................................................ 9 GENERAL ................................................................ 31
SALE IN LIEU OF PARTITION .................................. 9 S1: RAISING PE ....................................................... 31

REPRESENTATION ................................................... 31
LEASES ............................................................... 10 RELIANCE ................................................................ 31
2-PARTY APPROACH ............................................... 10 DETRIMENT ............................................................ 32
FIXED TERM LEASE ................................................. 10 S2: SATISFACTION OF EQUITY ................................ 32
1. EXCLUSIVE POSSESSION ..................................... 10 S3: IMPACT ON 3P ................................................. 33
2. CERTAINTY OF TERM .......................................... 11 S4: TRANSFERABILITY ............................................. 34

3. RENT ................................................................... 11
RENT HAS TO BE CERTAIN .................................. 11 MORTGAGES ...................................................... 37
PERIODIC LEASE ..................................................... 12
CREATION (LTA) ..................................................... 37
VOID AND EXPIRED LEASES .................................... 12
LEGAL MORTGAGE / LTA ........................................ 37
VOID ................................................................... 12
EQUITABLE MORTGAGE / LTA ................................ 37
EXPIRED .............................................................. 12
TERMINATION ........................................................ 12 MTGOR (M)S RIGHTS ............................................ 38
EQUITABLE LEASE ................................................... 14 EQUITY OF REDEMPTION ....................................... 38
GENERAL ............................................................ 38
WALSH V LONSDALE .............................................. 14
POSTPONE DATE OF REDEMPTION .................... 38
SECTION 6(D) ......................................................... 14 OPTION TO PURCHASE ....................................... 38
PART PERFORMANCE ............................................. 14 COLLATERAL ADVANTAGE .................................. 38
CREATION OF A LEASES .......................................... 15 TERM THAT DESTROYS EQUITY OF REDEMPTION
LEASES <7 YEARS .................................................... 15 ............................................................................ 38
LEASES >7 YEARS .................................................... 15 UNDUE INFLUENCE ............................................ 38
LICENCE VS LEASE ................................................... 16 CONTRACTUAL RULES ........................................ 39
ANALYTICAL FRAMEWORK ..................................... 17 WHAT CAN M DO WITH HIS EQUITY OF
PRIVITY OF CONTRACT ........................................... 19 REDEMPTION ......................................................... 42
COVENANTS: T&C LAND ......................................... 19 1. ASSIGNMENT .................................................. 42
- Page 2 of 71 -

2. LEASE (S23, CLPA) ........................................... 42 APPLY S160 COURT'S POWER TO RECTIFY ............. 56
3. MORTGAGE ..................................................... 42 VOLUNTEERS S46(3) ............................................... 56
ACTION FOR REDEMPTION / LTA ........................... 42 IN PERSONAM EXCEPTIONS ................................... 57
S19 COMPEL TRANSFER OF DEBT/PROPERTY TO ASSURANCE FUND ................................................. 58
3P ........................................................................ 42
S20 M HAS POWER TO INSPECT TITLE DEEDS .. 42
S21 RESTRICTION ON CONS. OF MORTGAGES . 42 CAVEATS ............................................................ 59
S22 3 MONTHS NOTICE RULE .......................... 43 FUNCTION .............................................................. 59
S30(1) APPLY FOR COURT SALE OF MGED.
1. STATUTORY INJUNCTION ................................... 59
PROPERTY ........................................................... 43
2. NOTICE ............................................................... 59
MTGEE (X)S RIGHTS ............................................... 44
3. PRIORITIES (S49) ................................................. 59
RIGHT TO FORECLOSE ............................................ 44
CAVEAT VS REGISTRATION ..................................... 59
RIGHTS INDEPENDENT OF MS DEF ........................ 44
PROCEDURAL ASPECTS .......................................... 59
1. RIGHT TO POSSESSION ................................... 44
2. RIGHT TO INSURE PROPERTY .......................... 45 1. LODGING A CAVEAT (S116,117) ......................... 59
3. RIGHT TO TRANSFER AND DEAL ..................... 45 2. FORM OF THE CAVEAT (S115(1)) ........................ 59
RIGHTS UPON MS DEFAULT .................................. 46 AMOUNT OF DETAILS REQUIRED ....................... 59
1. RIGHT TO APPOINT RECEIVER ......................... 47 3. TERMS OF A CAVEAT (S115(2)) ........................... 60
2. EXERCISE EXTRA-JUDICIAL POWER OF SALE ... 47 4. EFFECTS OF LODGING A CAVEAT ........................ 60
S1 (PRE-SALE): ..................................................... 47 IMMEDIATE IMPACT ........................................... 60
MS DUTY WHEN EXERCISING POWER OF SALE . 47 CHALLENGING THE CAVEAT ............................... 60
S2 (SALE): ............................................................ 48 5. LIFESPAN OF CAVEAT ......................................... 60
DUTY OF M IN SALE OF PROPERTY ..................... 48 LAPSE (S121,122) ................................................ 60
S3 POST-SALE ...................................................... 50 WITHDRAWAL (S126) ......................................... 61
DUTIES OF M REGARDING PROCEEDS OF SALE .. 50 ISSUE 1: "INTEREST IN LAND" ................................. 62
MORTGAGEES OTHER RIGHTS .............................. 50 RESCISSION OF CONTRACT ..................................... 62
ACTION ON THE DEBT ......................................... 50 REPAYMENT OF DEPOSIT ....................................... 62
APPLY FOR JUDICIAL SALE ................................... 50 R/P OR MORTGAGOR'S RIGHTS .............................. 62
EQUITABLE MORTGAGE/CHARGEE ......................... 51 OPTION TO PURCHASE ........................................... 63
PRIORITY OF MORTGAGES ..................................... 51 RIGHT OF PRE-EMPTION ........................................ 63
MORTGAGEES V. REGISTERED WRIT OF SEIZURE MATRIMONIAL ASSETS ........................................... 63
AND SALE ............................................................... 51 ISSUE 2: WRONGFUL CAVEAT ................................. 64
TACKING ................................................................. 51 ELEMENTS OF WRONGFUL CAVEAT ....................... 64
WRONGFULLY WIDE AND NARROW ............ 64
VEXATIOUSLY .................................................. 64
LAND TITLES ACT ................................................ 52
WITHOUT REASONABLE CAUSE ...................... 64
START: INDEFEASIBILITY ......................................... 52 DAMAGES ............................................................... 64
OVERRIDING INTERESTS 46(1) ................................ 52 FORESEEABILITY ................................................. 64
S159 REGISTRAR'S POWER TO RECTIFY ................. 52 CAUSATION ........................................................ 65
S160 COURT'S POWER TO RECTIFY ........................ 52 DUTY TO MITIGATE ............................................ 65
EXCEPTIONS 46(2) .................................................. 53 LTA ESSAYS ............................................................. 66
46(2)(A) FRAUD OR FORGERY ............................. 53 FRAUD ................................................................ 66
1. WHAT IS FRAUD? NOTICE? ............................. 53 CONSTRUCTIVE TRUST ....................................... 66
2. SUBSEQUENT REPUDIATION ........................... 53 2-PARTY VITIATING FACTORS ............................. 67
3. WILFUL BLINDNESS ......................................... 53 INCHOATE EQUITY .............................................. 68
3A. UNDUE INFLUENCE WILFUL BLINDNESS .. 54 HOW DOES THE ETRIDGE SITUATION FIT INTO THE
4. WHOSE FRAUD? .............................................. 54 TORRENS SYSTEM ............................................... 68
EVALUATION ....................................................... 54 IN PERSONAM .................................................... 69
46(2)(B) CONTRACTUAL RIGHTS ......................... 55 OTHER SOLUTIONS ............................................. 70
VIATING FACTORS ............................................... 55
CRTPA AND S46(2)(B) ......................................... 55
WHAT IF PARTIES WANT TO RESCIND THE
CONTRACT? ........................................................ 55

46(2)(C) TRUST OBLIGATIONS ............................. 55
46(2)(D) LAND ACQUIRED FROM LEGAL DISABILITY
............................................................................... 56
46(2)(E) ULTRA VIRES .......................................... 56
- Page 3 of 71 -

Fixtures & Chattels

chattel, can still be found to be a fixture if it is intended to
enhance the value of the land (Peoples Park Chinatown
Development Pte Ltd v Schindler Lifts (S) Pte Ltd, Van
FIXTURE VS CHATTELS Ommeren Terminal (S) Pte Ltd). Conversely, even if an object
is affixed to the ground, thus prima facie a fixture, it can still
be found to be a chattel if the affixing was meant to increase
____ can only get back the objects if they are part of the land. the convenience of the use of the object (Hellawell v
An object falls under one of the three broad categories: a Eastwood). In determining the objective purpose, the law
chattel, a fixture, or part and parcel of the land itself must also take into account cultural exceptions, if any (Kish v.
(Elitestone Ltd v. Morris & Anor), with the last two being part Som).
of the land itself. Indeed, fixtures are part of the land as
worded in s. 6 of CLPA, such that the fixtures are to be passed The test also applies to objects that are not within the physical
on together with the land during the conveyance. Therefore boundaries of the land but still intended to be an integral part
the issue in this case is whether the objects are chattels or of the land, such as a floating dry dock (Pan-United Marine Ltd
fixtures. v Chief Assessor). When a tenant installs an object on the land
(commonly known as tenant fixtures), if it was not intended
To differentiate between a fixture and a chattel, the court has to benefit the landlord, it does not belong to the landlord until
devised 2 tests: (1) Degree of annexation, and (2) Object of the lease expires and the fixture is still not removed (BP
Annexation (Elitestone Ltd v. Morris & Anor; Holland v. Refinery Singapore Pte Ltd v Amazon Group Ltd; Riduan Bin
Hodgson) with the latter test being of first importance Yusof v Khng Thian Huat (No 2)). Even if there is retention of
(Hamp v. Bygrave, affirmed locally in Chief Assessor & title clause on the fixture, the fixture still belongs to the land
Comptroller of Property Tax v Van Ommeren Terminal (S) Pte as proprietary rights triumph over contractual rights
Ltd). (Gebrueder Buehler AG v Chi Man Kwong Peter).

**Apply facts to see the purpose of placing the object was to
(1) DEGREE OF ANNEXATION enhance the object or the realty?

Under the first test of degree of annexation, an object is prima

facie a fixture if it cannot be removed at all save by

destruction of itself or damage to the land (Elitestone Ltd v.
Morris & Anor; Holland v. Hodgson). If the object is affixed or
secured to the land, it is prima facie a fixture and the burden
of proof fall on the person arguing otherwise (Holland v.
Hodgson). Conversely, if the object is resting on its own
weight, it is prima facie a chattel and the burden of proof on
the person who argues that it is a fixture.

**Apply facts to see if its resting on own weight or affixed,
and consequently who has the burden of proof

(2) OBJECT OF ANNEXATION
However, the first test merely affects the burden of proof, and
one need to go on to the second test to determine whether
the object is really indeed a fixture or chattel. Object of
annexation looks at the objective intention of the parties not
the subjective intention of the party who put the object there
and ask whether the object was to improve value of the land
or was it simply fixed for easier enjoyment of the object
(Hamp v. Bygrave; Hellawell v Eastwood)? Therefore, an
object that is resting on its own weight, and thus prima facie a
- Page 4 of 71 -

Co-ownership
presumed to have intended to retain the beneficial ownership.
The burden of proving that a gift was intended, is on the
recipient of the transfer.
DETERMINE: JT OR TIC?

Presumption of resulting trust

INITIAL TRANSFER/CONVEYANCE
A resulting trust is in theory strictly based on the parties
** Are there words of severance? respective contributions to the purchase price of the
property, and each partys entitlement to the beneficial
If yes, shall hold as TIC in law but presumed with equal shares interest of the property is the exact mathematical equivalent
(s53(2), LTA). of his or her contribution

If no, shall be presumed as JT in law (s53(1)(, LTA). Issue 1: contributions to purchase price

Court will give effect to any agreement between the
parties at the time of acquiring the property in
NON-LEGAL OWNERS CLAIM question as to the ultimate source of funds for the
1. Resulting trust: based on contributions to purchase purchase of that property. However, in the absence
price at time of purchase (Laskar v Laskar) of any such agreement, the payment of mortgage
2. Constructive trust: based upon inequitable conduct instalments or other financial contributions
i.e. express promise and detrimental reliance subsequent to the initial acquisition of the property
o Detriment must be related to property: will not give rise to any beneficial interest by way of a
Gissing v Gissing resulting trust (Lau Siew Kim).
o Another view that form of detriment Repayment of mortgage
doesnt matter as long as detriment o Contributions to repayment of mortgage
referable to promise; promise has still spent based on prior agreement (Cowcher v
money that he would not otherwise have Cowcher) []
spent: Stack v Dowden o Subsequent financial contributions [ X ]
3. Stack v Dowdens constructive trust: a constructive Bridging loans
trust can arise if the parties entire relationship to o Ultimate source of funding from relative of
each other and the way they regard the property one party or from sale of one party's
indicates a common intention as to ownership property + agreement at time of acquiring
property

Issue 2: costs of repairs / renovation (academic)
FACTORS :: EQUITY'S INTERVENTION

Contributions to the cost of repairs or renovation of a
PRESUMPTIONS property may be relevant when computing a partys
2-step approach as per Lau Siew Kim contribution to the purchase price of property (The Law of
Trusts and Equitable Obligations, Pearce & Stevens).
1. Does presumption of RT arise on the facts?
2. If yes, then can apply presumption of advancement Where the property is repaired or renovated, and its value is
to displace that initial presumption thereby increased, a person who contributes towards the cost
of such repairs or renovations will be entitled to an interest in
Note: actual effect of presumptions relate to burden of the land by way of a resulting trust proportionate to the
proof: If the presumption of advancement applies, an extent to which the increase was attributable to their
individual who transfers property into another persons name contribution. Improvements made much later than the date
is presumed to have intended to make a gift to that person. of purchase may give rise to a constructive trust.
The burden of proving that the transfer was not intended to
be a gift, is on the challenger to the transfer. If the Resulting trust vs Constructive trust (bonus)
presumption of resulting trust applies, the transferor is
- Page 5 of 71 -

The financial dependence of the recipient on the
Midland Bank v Cooke transferor or contributor (Low Gim Siah)
Mrs Cooke was entitled to a 6.74% share of the
beneficial interest of a house by way of a In relation to the father-child/husband-wife relationships
presumed resulting trust but was awarded a which traditionally attracts the operation of this presumption,
50% share by the court by way of a constructive it has also been emphatically acknowledged that to treat the
trust, taking into account all her indirect established categories as frozen in time would not be
contributions to the house characteristic of the doctrines of equity (Calverley v Green).
In our view, his consideration of contributions up Prospective husband to prospective wife []
to the time of separation was more appropriate o In fact, stronger presumption if gift was
for the imposition of a constructive trust; for the made in consideration of marriage before
purposes of presuming a resulting trust, the solemnisation than post-nuptial
parties contributions that are to be considered o Otherwise, to say that transfer of property
should instead be confined to those made at the to intended wife = resulting trust, and a
time of the acquisition of the property similar transfer of property made
immediately after marriage = advancement
involves paradixocial distinction not
Presumption of advancement characteristic of doctrines of equity.
Husband and mistress [ X ] (Diwell v Farnes)
The presumption of advancement was still very relevant in the o Unless argue using Gibbs CJ dicta in
established (both traditional and extended) categories of Calverley v Green acknowledging the
relationships; it was the strength of the presumption that changing conditions of society and a desire
should vary with the circumstances in accordance with to desist from the historical reasons for
modern social conditions (Lau Siew Kim, adopting Chan CJ's confining the presumption of advancement
dicta in Low Gim Siah). to cases of legal spouses
Cohabiting couples (whether sexual or homosexual)
Rationale: [ X ] (Diwell v Farnes)
Genesis of the presumption of advancement lay in o Gibbs CJ dicta, Calverley v Green
remedying the unjust operation of the presumption
of resulting trust in certain circumstances; its
functionality is limited to, and indeed dependent on, UNEQUAL CONTRIBUTIONS
the prior existence of a presumed resulting trust
The presumption should be held to be raised when There is a presumption of resulting trust where there is
the relationship between the parties is such that it is unequal contribution; parties with the legal titles are holding
more probable than not that a beneficial interest was it in shares proportionate to their contributions (Lake v
intended to be conferred, whether or not the Gibson; Sitiawah Bee bte Kader).
purchaser owed the other a legal or moral duty of
support
MATRIMONIAL CONTEXT
2 key elements are crucial in determining the strength of the
presumption of advancement in any given case (Lau Siew However, in matrimonial context, the position in Singapore is
Kim): that the presumption of resulting trust for domestic couples
1. first, the nature of the relationship between the remains applicable. This, in effect, ignores the Stack v
parties (for example, the obligation (legal, moral or Dowden, which states that there is always a presumptive
otherwise) that one party has towards another or the equality notwithstanding unequal contribution in matrimonial
dependency between the parties); and context.
2. second, the state of the relationship (for example, NOTE: Presumptions are "an evidential instrument of
whether the relationship is a close and caring one or last resort where there is no direct evidence as to
one of formal convenience) the intention of the parties rather than as an oft-
applied rule of thumb"
All factors of the case should be considered:
- Page 6 of 71 -

If presumption of advancement operates, couple is
presumed as JT in equity as well (Lau Siew Kim). In Diaz v. Diaz, the instrument of severance was served but
If wife made no contributions at all, she held deemed not registered, and the court held that between the join-
to hold the property entirely on trust for husband tenants the severance is effective in equity but third parties
(Lau Siew Kim). are entitled to treat the joint tenancy as subsisting. The
rationale of allowing severance between the joint-tenants is
to give effect to legislative intention to facilitate severance by
PARTNERSHIP ASSETS / BUSINESS CONTEXT one co-owner without consent of the other. However, this
rationale is overridden by parliaments insertion of s. 53(8),
When parties purchase land in joint names as part of a which dispense the need for production of document title,
partnership property, they are presumed to be TIC even if which indicates that registration is still important (as noted by
there is equal contributions (Malayan Credit Ltd v Jack Chia). Barry Crown in his article). Thus, Diaz v. Diaz is likely not to be
This is because the rule of survivorship has no place in a followed in Singapore. Thus, instrument of severance need to
business context. Thus, this applies to joint undertakings with be registered or else there will be no severance at all.
a view to profit as well, notwithstanding the lack of formal
partnership agreement.

2. EQUITY: SEVERANCE

JOINT MORTGAGEE Held in Williams v Hensman (1861) that there are three heads
for severing a JT in equity:
When two or more people lend money on the security for a 1. "Operating upon his own share"
mortgage, regardless of position at law and regardless of 2. Mutual agreement
contribution (equal/unequal), equity will presume that they 3. Mutual conduct
hold as TIC.
The touchstone for determining effective severance is final
and irrevocable intention.
RENT OBLIGATIONS?

1. OPERATING UPON HIS OWN SHARE
Regardless of JT or TIC, there is unity of possession.

Making of will [ X ]
If A stays alone, B approves A doesn't have to pay rent
o Doesn't work; rule of survivorship trumps
If A evicts B A must pay rent (Dennis v McDonald)
Litigation
If A rents out property/makes profit must disgorge (s73A,
o If suit is about the JT, then severance occurs
CLPA)
(Harris v Goddard)

o Order of court = serverance, even if not
CONVERT: JT TIC
perfected (Sivakolunthu)
Sale []
o Refers to sale of interest and not the entire
1. LAW: UNILATERAL DECLARATION land: P steps into shoes of ex-JT
s53(5), LTA; s66A(3), CLPA o C sells to P
(A+B) = JT | P = TIC
Procedure involves 1) filling up instrument or deed, 2) serving o C sells to B
on all other JTs, and 3) lodging with Registrar (for LTA) (A+B) = JT | B = TIC
o Can apply Walsh v Lonsdale + s6(d), CLA
The effect is severance at law. This approach differs from UK, Alienation by mortgage/lease
where servance is in equity only because of UK Law of o Mortgage is valid severance [ ] (First
Property Act 1925. Singapore provides for severance at law. National Securities)
o Lease unclear (partial alienation) modern
authority is TIC during lease; if lease ends

Issue: what if instrument filled but not registered?
- Page 7 of 71 -

before JT dies = JT again (Wright v Gibbons An oral agreement, though not enforceable and later
AUS position) abandoned, can still be accepted as evidence of course of
No Singapore case on this dealing to show parties intention (Burgess v Rawnsley).
o Policy reasons (Barry Crown)
A registered mortgage is a public Lord Denning and Sir John Pennycuick (Browne LJ silent on
transaction no risk of 1 JT this) held that it was possible for negotiations not
effecting a severance behind back culminating in an agreement to be evidence of a common
of co-owner intention to sever. However, both disagreed as to whether
An equitable mortgage, however, the facts in Burgess amounted to such intention. While Lord
may never be found out and if the Denning was in the positive, Sir John Pennycuick felt that one
co-owner that is not the mortgagor cannot ascribe to join-tenants an intention to sever merely
dies, the lessee will succeed to the because one offers to sell and the other counter-offers.
entire estate by virtue of the Therefore, the threshold is high and the course of dealing or
doctrine of survivorship. Manifestly actions must evince the unequivocal common intention of
unfair when JT had in fact been parties to sever, even if intention was not subsequently acted
severed in equity upon.
Leases are also problematic if
lease was only granted by 1 co- **Facts, is the common intention unequivocal based from
owner without joint consent of the actions?
others, lessee must share exclusive
possession with rest of the co-
owners who di not consent and 3. MUTUAL AGREEMENT
who also have the right to elase
property out to 3P An oral agreement, though not specifically enforceable, would
Quare: whether 4 unities can be re- amount to a mutual agreement to severe. The significance is
enjoyed afterwards not the binding effect of the agreement but the indication of
Gifts the common intention to severe (Burgess v Rawnsley).
o If deeded []
o If not, see if Re Rose doctrine applies ***Comparison to facts: Agreement was indeed to sell the
Did everything in his power but shares and at 750, merely left documentation. Compared to
transfer not registered due to fault question (see how/discuss later), intention to sell was not
of 3P = effective severance even present.
Bankruptcy
o Automatically vests in the trustee in Agreement can be express or implied and be a valid
bankruptcy (Bankruptcy Act) agreement, but need not be specific
1. Sale from one JT to another: contract need not be
specifically enforceable
2. MUTUAL CONDUCT 2. Sale to 3P: mere agreement to sell won't lead to
severance, but intention to split the proceeds of sale
Lack of agreement but unambiguous intention to does
sever through a course of dealing 3. For negotiations, severance would occur only if the
Mutual wills [] (Burgess v Rawnsley) JTS intend to sever regardless of the outcome of the
Negotiation negotiation
o Uncertain. Mere offer to buy/sell insufficient
standard has to be the same as mutual Mutuality: all JTs must agree
agreement
Mutuality: ALL JT must be involved in the course of
dealing (Tan Chew Hoe Neo v Chee Swee Cheng)

- Page 8 of 71 -

TERMINATION OF JT/TIC

1. VOLUNTARY SALE
Combined sale of property, either voluntarily or by court
order, will end the co-ownership agreement. JT have to act
collectively for sale to be effective

2. PARTITION
Partition destroys the unity of possession and parties thus
become sole owners of his part.

This can be done voluntary or by court order (s18(2), SCJA +
First Schedule, 1st paragraph).

This interest is divided physically as well as conceptually and a
land surveyor has to be called. Not always easy.

SALE IN LIEU OF PARTITION

However, in some situations, court may order for a sale in lieu
of partition (SCJA, First Sch, para 2 court has power to order
partition or sale in lieu of partition)

Khoo Seoke Haing v Cheah Khay Pin partition decree []
Before partition decree carried out, one of the co-
owners died. Court held that partition decree
operates as a severance of a joint tenancy the
moment it was created

Abu Bakar v Jawahir impractical partitioning []
Partitioning of small house not practicable. Court
held sale in lieu of partition works to sever as well
and that better remedy was for one to buyout the
other parties' shares or have a sale in lieu of
partition and split the money
Abdul Razak Valibhoy partition breached planning rules []
Dicta: must consider financial prejudice to co-owners

Chiam Heng Luan acrimonious r/s + property in disrepair
[]
Co-owners granted some sort of interest to a subset
of their numbers to run the hotel. Majority of co-
owners want to sell but 2 resisted
Court ordered a sale and reasoned that not selling
will only exacerbate friction and that property was in
bad physical condition so this would be a
commercially sound decision.
- Page 9 of 71 -

Leases
3) L can command T to leave the house at specific periods of
each day = no exclusive possession
o But quite difficult to convince Ct to take this
2-PARTY APPROACH term for real (just as it was rejected in Aslan v.

Murphy)
o In such sham cases, the evidence (eg. L retains
If only 2, creation of leases not an issue; after all, even if it was the right, but he does not ever exercise it)
an equitable lease, equity trumps law and would treat the convinces the courts that such written rights are
lease as the same as a legal one. merely a mask and that in practice, the parties
do something entirely different.
If more than 2, whether it was equitable or not would have 4) Possession of keys
significant legal impact because of assignment o Ambivalent factor depends on the underlying
purpose behind Ls retention of keys. (Aslan)
A. NATURE LEASE OR LICENCE o If retention was for legitimate emergency
i. Certainty of duration purpose, does not affect tenant's exclusive
i. Fixed or periodic possession
ii. Exclusive possession o However if retention is to interfere with
iii. Rent tenant's territorial control or for occasional
iv. Lease vs licence analysis access for reasons of L's own convenience, then
B. REMEDIES tenant has no exclusive possession and is mere
C. DETERMINATION lodger
5) Intention to create legal relations
6) Familial settings sometimes L tells T that he can do
FIXED TERM LEASE anything he wants in a space and even keeps out of it but
it is still clearly personal in nature = no exclusive
E X C L U S I V E P O S S E S S I O N / F O R A T E R M / A T A R E N T possession (Abbeyfield (Harpenden) Society Ltd v. Woods
frail old man case)
According to Street v Mountford, a lease is created if the a. More importantly, INTENTION TO CREATE LEGAL
tenant has exclusive possession over premise for a term at a RELATIONS if family, can argue that no such
rent. intention exists; otherwise, can argue that
existence of contract and signing it = intention to
create legal relations
1. EXCLUSIVE POSSESSION
7) It is only logical that if both landlord and tenant are in
Exclusive possession is the proper touchstone of a lease occupation of property, there cannot be any tenancy
(Radaich v. Smith) if one does not have exclusive possession because no exclusive possession.
he does not have a lease. With exclusive possession the a. Goh Suat Neo v. Roberts (1950)
tenant is able to exercise the rights of an owner in land and b. HELD: Depends on whether the landlord [1]
can keep out strangers such as the landlord himself, unless retained a right of control and [2] the parties
the landlord is exercising limited rights reserved to him by the intentions.
tenancy agreement (Street v. Mountford). Therefore, the land c. Usually, this is a strong presumption that the
is in the real sense the tenants land, albeit temporarily and landlord retained control and tenant must show
subject to certain restrictions this elevates the tenancy evidence that he renounced his control.
agreement to an estate in the land and the tenant now owns
proprietary rights (Street v. Mountford). Substance, not labels
Courts will look at substance and conduct of parties and
What are some factors? not labels (in dicta in Goh Gin Chye v. Peck Teck Kian
1) Provision of services unlimited access for L or Ls agents Realty [SGCA]).
to provide services (like housekeeping) = no exclusive Even if parties expressly state that this is not a lease, its
possession (Marchant v. Charters) inconsequential (Antoniades v Villiers)
2) Control over when T has access to premises + how he
runs business = no exclusive possession (Re Tan Tye) Bonus: Exceptions to exclusive posssesion amounting to lease
- Page 10 of 71 -

In certain situations, exclusive possession may not lead to the a contractual licence, with the practical effect of
agreement amounting to a lease. These exceptions, as behaving like a lease between parties inter se.
identified by Lord Templeman in Street, include 1) service 2. Furthermore, all the judges in the case were critical
occupancy of Norris v Checksfield, in which the right to occupy of the rule that a tenancy has to be for a certain
was given to an employee for the better performance of his period, and particularly the way in which that rule
duties, and 2) where occupation is given as an act of applies to periodic tenancies. They recommended
generosity, friendship or charity as such as in Gray v Taylor, in that this rule be looked at again by Parliament, after
which occupation of an almshouse did not indicate the consultation on the issue by the Law Commission.
existence of a lease. 3. Applying this to Lace v Chantler, it would allow the
agreement to be enforceable
4. If this case were to be held in Singapore,
a. Under s87(2)(b), LTA, there is a specific
2. CERTAINTY OF TERM requirement that the maximum duration is
With regards to the term, a lease must have a certainty in certain before a lease can be registered
duration and it cannot be open-ended; the termination point b. This is arguably just a codified provision of
of the lease must be fixed from the very commencement of the common law requirement of certainty of
the lease, ab initio (Lace v. Chantler). This principle was briefly duration (Prudential), hence the Mexfield
doubted when the court in Ashburn Anstalt v. Arnold held that contractual circumvention of the certainty of
even if the term is not clearly demarcated, as long parties term requirement would still be viable
know when the arrangement will come to an end there is no Hence in practice, just put lease for 99 years or [whatever
uncertainty. However, Ashburn was overruled in Prudential indeterminate condition], whichever is shorter.
Assurance Co Ltd v. London Residuary Body where the court
affirmed Lace v. Chantler that any lease or tenancy MUST
state a maximum duration that is ascertainable at the date of
commencement. This principle was then affirmed locally in
3. RENT
Chiam Heng Luan v Chiam Heng Hsien. Despite Lord Templemans ruling in Street v. Mountford, it
was held in Ashburn Anstalt v Arnold that it was not necessary
** Discuss Mexfield v Berrisford circumvention of certainty for a payment of rent to create a valid lease at common law.
requirement
Whilst Ashburn was accepted by Scott LJ in Prudential
Assurance Co Ltd v. London Residuary and Dillon LJ in
Is this factor of certainty of duration required? Canadian Imperial Bank, this view was restricted to only fixed
term leases and not periodic tenancy as it is difficult for the
Mexfield v Berrisford (2012 Supreme Court of UK) latter to arise without a reservation of rent.
[60] If the agreement does not create a tenancy for
technical reasons, namely because it purports to Nonetheless it is submitted that a rent is important as
create an uncertain term, it is hard to see why, as a consideration to sustain the contractual bargain, therefore
matter of principle, it should not be capable of most leases would have rent, if not an alternative form of
taking effect as a contract, enforceable as between consideration (Tan Sook Yee).
the parties personally, albeit not capable of binding
their respective successors, as no interest in land or RENT HAS TO BE CERTAIN
other proprietary interest would subsist. It is a common misconception that rent has to be in monetary
form. It can be in goods, services, or payable in kind. The only
** Apply to say that the certainty of term req. is in question clear requirement is that the amount of rent must be capable
1. The Supreme Court in Mexfield v Berrisford held in of being rendered certain. Thus, in Bostock v Bryant (1990),
dicta that even if a tenancy could not be created for the obligation to pay fluctuating utility bills could not be
want of certainty of duration, the arrangement could regarded as rent, being an uncertain sum.
still take effect as a contract, enforceable as
between the parties personally, albeit not capable of
binding their successors because no interest in land
would subsist. In other words, it would take effect as
- Page 11 of 71 -

PERIODIC LEASE Lord Templeman sought to argue that periodic

tenancy fits into the rule because the maximum
length of each period is known.
E N T E R I N G I N T O P O S S E S S I O N / P A Y I N G R E N T / But many academics still feel that it fits quite
P E R I O D I C I N T E R V A L S uncomfortably doctrinally with the certainty of term
rule.
It was also thought that the certainty of duration only applied Note: A lease for 99 years subject to be determined
to fixed leases and not to periodic tenancy as for periodic when England wins the world cup is a fixed term
tenancy the term grows period by period without knowing lease even though it may end earlier than 99 yrs.
when it will end (Re Midland Railway Companys Agreement). Issue: uncertainty in periodic tenancy
However, this was overruled in Prudential Assurance where o Uncertainty can arise where there is a fetter
the court held that period tenancy is not an exception to the on the right of either or both parties to
rule requiring certainty as a periodic tenancy is saved from serve a notice to quit.
being uncertain because each party has power by notice to o In Mexfield v Berrisford, the Supreme Court
determine the lease. In other words, the certainty of held that the restriction on the ability of the
duration lay in the certainty of termination of the period housing association to serve a notice to quit
tenancy. This was once again affirmed locally in Chiam Heng was of potentially unlimited duration, thus
Luan. Thus, in Singapore all leases, whether fixed or periodic, the agreement could not take effect as a
must have certainty of duration. tenancy according to its terms
o Therefore, a periodic tenancy with a fetter
A common law periodic tenancy may be implied and created on the either party's ability to serve notice
with the tenant entering into possession and paying rent at a to quit, thus making it possible to last for an
periodic interval (Prudential Assurance, affirmed locally in uncertain period, cannot exist.
Chiam Heng Luan). After the end of one period, the tenancy
automatically elongates by 1 original period and it continues * A periodic lease is always more vulnerable than a fixed
rolling over in such a way. It is terminated only when either of term because it can be easily terminated by L serving notice.
the parties give the appropriate notice to quit (Prudential
Assurance, Mellows v. Low). The duration of a period is to be

inferred from the period of each payment (Adler v. Blackman),
therefore if rent is paid on a weekly basis it is likely to be a VOID AND EXPIRED LEASES
weekly tenancy and so on. In the absence of a provision for
the termination of the periodic tenancy, the appropriate VOID
period for notice to quit must correspond with the length of a
period: if it is a monthly tenancy, the period is 1 periodic This is the case even where parties had intended to create a
month, and if it is a yearly tenancy the periodic is 6 months fixed term lease which is, in fact, void but the tenant has, in
(Ko Teck Kin v Watkinson). However, the notice must be given any event, entered into possession and paid rent at periodic
at the start of a new period (Ko Teck Kin), i.e. if tenancy intervals (Prudential Assurance).
th th
starts on 20 , notice must be given on 20 , and there cannot
be an overlap of the periods.

EXPIRED

A common law periodic lease may be implied and created A periodic tenancy will also be created where the tenant of a
with the tenant 1) entering into possession of the property fixed term lease holds over on the expiration of his term and
and 2) paying rent at periodic intervals (Prudential Assurance, then pays the rent of a periodic basis (Adler v Blackman). In
affirmed locally in Chiam Heng Luan). both of these cases, the terms of the void or expired lease will
continue to bind the parties insofar as they are consistent
How to reconcile the periodic tenancy? with the periodic lease.
The periodic tenancy is too entrenched in English law
to be disregarded as a lease and indeed even the HL
in Prudential had to acknowledge it.
TERMINATION
- Page 12 of 71 -

It is terminated only when either of the parties give the
appropriate notice to quit (Prudential Assurance, Mellows v.
Low).

The duration of a period is to be inferred from the period of
each payment (Adler v. Blackman), therefore if rent is paid on
a weekly basis it is likely to be a weekly tenancy and so on. In
the absence of a provision for the termination of the periodic
tenancy, the appropriate period for notice to quit must
correspond with the length of a period: if it is a monthly
tenancy, the period is 1 periodic month, and if it is a yearly
tenancy the periodic is 6 months (Ko Teck Kin v Watkinson).

However, the notice must be given at the start of a new
th
period (Ko Teck Kin), i.e. if tenancy starts on 20 , notice must
th
be given on 20 , and there cannot be an overlap of the
periods.

- Page 13 of 71 -

EQUITABLE LEASE shows that it was to prevent fraud and

unconscionable dealings.
o Emails help clarify contractual position and
W A L S H V L O N S D A L E + S E C T I O N 6 ( D ) signatures also need not be literally
personalised and an indication of the name
If the contract is in writing, signed (s6(d), CLA) and is will suffice.
specifically enforceable, equity will regard the relationship Joseph Mathew (2010)
between the parties as one governed by an equitable lease o Affirmed SM Integrated
(Walsh v Lonsdale). The exception to this is an equitable lease
arising out of proprietary estoppel. These can be completely

oral and arise out of the inequitable conduct of the landlord
(Taylor Fashions; Yaxley v Gotts). PART PERFORMANCE
A C T + D E T R I M E N T + R E L I A N C E O N C O N T R A C T
WALSH V LONSDALE
Some act must have been performed that is premised on the
Specific performance / clean hands / consideration
contract before it can be enforceable. If the party has

undertaken an act to his detriment because of reliance on
Requires clean hands and value (because equity will
the contract, it can be enforced (Steadman v Steadman,
not assist a volunteer)
affirmed in Joseph Mathew).
Distinction between grants of leases as opposed to

agreements to grant leases

An agreement to grant a lease will typically create a
Differences between a legal and equitable lease
lease in equity. This is the result of the operation of
Legal Equitable
the maxim that equity regards as done that which
ought to be done (Walsh v Lonsdale) Tenants position is Tenants position is
o On an orthodox view of the law, the maxim dependent on compliance dependent on the availability
only operates when specific performance is with formalities. of SP (where there is a
an available remedy contract of sale or part
o Equitable perspective will prevail where performance)
requirements are met. Should equitable If the tenant breaches a SP is discretionary so remedy
lease fail to arise i.e. no written form, court covenant, the landlord may may not be granted if tenant
will fall back on the common law forfeit the lease. comes with unclean hands,
perspective of an implied periodic lease. i.e. breach of covenants.
However, GV v Marina Centre expanded the doctrine Privity of estate *No privity of estate (albeit
in Walsh by purposively interpreting that specific s10/11 includes an equitable
performance is not only confined to enforcing the lease; and boyer v wayer
terms of the contract, it also provides equitable exception)
intervention by way of injunction so as to protect Conveyance of land For unregistered land,
the rights of the parties completed agreement for lease is not a
conveyance under CLPA no
easement is created in
favour of the tenant
SECTION 6(d) Binds the whole world Binds the whole word,
**Whether there is an enforceable contract except for the equitys
darling
In respect of agreements to grant leases, there must be
compliance with s6(d) of the CLA, which requires for the
agreement to be in writing and signed.
SM Integrated (2005)
o HELD: Yes, emails constitute writing under s.
6(d) of the Civil Law Act because the
purposive interpretation of the provision
- Page 14 of 71 -

CREATION OF A LEASES
LEASES <7 YEARS
If < 7 years, then common law intention, possession but no
need formalities.
S86, 87 does not apply to leases below 7 years: s87(5)
Leases under 7 years form an overriding interest
even if they do not appear on the face of the register

LEASES >7 YEARS
If > 7 years, then, s. 53(1), CLPA and s. 46(1)(f), 86, 87, LTA.
S. 53(1), CLPA:
o A conveyance of an estate or interest in
land other than for a lease for a period not
exceeding 7 years at rack rent shall be void
at law unless it is by deed in the English
language.
S. 46(1)(f), 86, 87, LTA:
o Further requirements for registered land
under the Land Registry:
Have fixed maximum term (cannot
be determinable by the happening
of an event)
Must purport to confer on the
leesee exclusive possession of land.
o S. 87, LTA: Must be in the prescribed form
and registered.
o S. 46(1)(f), LTA: Will bind parties even
without registration or notification.

Failure to complete the formalities will void the lease at law,
but if the tenant tenders rent which is subsequently accepted
by the landlord, a legal periodic tenancy is created.
An equitable lease > implied legal periodic tenancy
because s. 4(13), CLA says that equity prevails.

Furthermore, there could be a lease in equity when there is
an agreement to grant a lease.
Note: Must satisfy s. 6(d), CLA or doctrine of part
performance.
See above ('Equitable leases')

- Page 15 of 71 -

LICENCE VS LEASE
Exclusive possession is not
What is the significance of distinguishing license from lease?
conclusive of a lease
LEASE LICENSE A may have exclusive
possession, but
CONCEPTUALLY A proprietary estate A purely personal permission to occupy
rd
he may be a:
COMMON LAW - Interest capable of - Not capable of assignment to 3 P
rd - Fee simple owner
RIGHTS
rd
assignment to 3 P - Incapable of binding a 3 P transferee of land
- Adverse possessor
-
rd
Capable of binding a 3 - Not subj to Ls remedy of distress
- Mtgee in possession
P transferee of land - Cannot seek relief against forfeiture
- Beneficiary under a
- Subj to Ls remedy of charitable trust
distress

- Can seek relief against
forfeiture
- Can create a sublease
TRESPASS/ - Can sue in an action for - No such right
NUISANCE nuisance or trespass - (A rare case whr licensee has a right tt lessee does
- Can recover land from not is when licensee sues licensor for negligence in
trespassers safeguarding the formers belongings. A tenant on
the other hand is deemed to have excl possession
and is responsible for the defence of his own land)

This problem concerns the distinction between a lease and a licence. A lease is tradiationally a proprietary right, whereas a
licence is a mere personal arrangement between two parties (Ashburn Anstalt). The practical difference this makes in this
problem is clear. If the arrangements entered into by (name of landlord) with his respective occupiers amount to leases, then
they have the ability to bind (name of) the purchaser when he acquires the title. If, however, the arrangements are properly to
be regarded as liences, then, in principle, they cannot bind Edward and the occupiers will have to vacate the premises.

Overall Territorial control
This carries the idea that the tenant has some form of overall control and dominion over the land. The test for determining
whether an occupier is a tenant or a licensee depended on the nature and quality of the occupancy, whether it was intended
that the occupier should have a stake in the room (dicta of Lord Denning in Marchant v Charters, affirmed by Lord Templeman in
Street v. Mountford). Other factors such as exclusive possession, duration of stay, labels which the parties put on the agreement
might influence the decision but none of which were conclusive (Lord Denning in Marchant v Charters). Whilst granting of
exclusive possession is prima facie an intention to create a tenancy, if major covenants of the agreement indicated that the
landlord retained control and supervision, the agreement is not a lease (Re Tan Tye). In Re Tan Lye, though the occupier was
purportedly given possession of the running of an amusement park, it was held that the tenant did not have exclusive control
as he was subject to micro-management by the landlord. The landlord could control employment and had a say in the running
and operations of the land. There was even a clause which purported to transfer the estate back to the landlord upon the
tenants death. There is no control or dominion by the tenant and he cannot be said to have exclusive control of the land.

The retention of keys by the landlord is inconclusive to the determination of control and the court must ascertain the purpose of
the retention (Aslan v. Murphy). If retention was for a legitimate emergency purpose, it does not affect tenants exclusive
possession, but if retention is to interfere with the tenants territorial control or for occasional access for reasons of his own
convenience, then tenant has no more exclusive possession (Aslan v. Murphy).

Exclusive occupation =/= Exclusive possession (control stake in the land)
However, exclusive possession is not synonymous with exclusive occupation (Street v. Mounfort). An occupier who is granted
exclusive occupation of the room does not mean he has exclusive possession if the circumstances objectively showed that he
had no stake or control in the room (Abbeyfield v Woods). To differentiate a lodger (with exclusive occupation) and a tenant
- Page 16 of 71 -

(with exclusive possession), one must see if the landlord provides attendance or services which require the landlord to exercise
unrestricted access to and use of the premises. If so, the occupier is a lodger (Street v. Mounfort).

Labels, contracting away legal status, misleading terms Courts will intervene to give effect to true relationship that was
created between the parties
The relationship of the parties is determined by law and not the label that parties put on themselves. The actual terminology the
parties come up with is not conclusive as they might misdescribe their relationship, whether deliberately or accidentally. Even if
a contract used the term license it can still be found to be a lease if when one looks at the inner reality of the relationship the
parties had, it would be found that the substance of the contract was actually a lease (Goh Gin Chye v Peck Teck Kian Realty Pte
Ltd). Parties also cannot contract away their true legal status. Even if the agreement expressly states that the occupier is not a
tenant but a mere licensee, it will still be held as a lease if all the 3 requirements (of exclusive possession, for a term and rent) of
a lease are fulfilled one cannot, by autonomous misdescription of the relationship, change the nature of the relationship itself
(Street v. Mountfort; Antoniades v Villiers). Any misleading, unrealistic and cynical terms that were not intended to be taken
seriously by the parties will be treated as sham clauses which the court will then strip away from the document (Antoniades v
Villiers; Aslan v Murphy). The bottom line is, Courts will always intervene and look into the inner reality of the parties
relationship substance over form when determining whether or not a lease or license has been created.

ANALYTICAL FRAMEWORK

STAGE 1: Where there is privity of contract & estate (original parties)
Rule 1: Where there is privity of contract then ALL covenants are enforceable (whether personal or T&C).
Covenants will also bind the original tenant even after the assignment of lease: Corp of London v Fell (expiration of contractual
liability but still has privity of estate)

STAGE 2: Where there is privity of estate (any assignment/conveyance excluding subletting*)
Rule 2: Where there is privity of estate but no privity of contract, only covenants which touches and concerns the land are
enforceable on 3P.
In law privity of estate: In equity exceptions:
All covenants will bind, where it is touching and All covenants will bind, where it is touching and concerning the land:
concerning the land: s. 10/11, CLPA + s. 86(2), s. 10/11, CLPA + s. 86(2), read with s. 2 of CLPA (which includes
LTA; Spencers case agreement for a lease, i.e. equitable lease. But this is in Part I, whereas
LTA only imports part III); Boyer v Warby

rd
STAGE 3: Where there is no privity of estate or contract (3 parties: surety or sub-lesees)
RULE 3: Where there is neither privity of contract nor privity of estate, as a general rule, covenants are unenforceable.
However, 2 exceptions (Tulk v. Moxhay):
Exception 1 (benefits): If covenant touch and concern land with notice, benefits can still run in law and in equity:
Kumar v. Dunning; P & A Swift Investments v CESG (benefit of surety covenant runs)

Exception 2 (burden): Burden of restrictive covenants binds in equity where there is notice.
o In a case of a registered lease/sale/transfer, it is usually available in the land-register. Hence it is likely that the
court will deem that there was constructive notice if he fails to check
o In a case of an unregistered lease, the common law position is that the underlessee has the right to check the
head-lease. Hence, it is also possible that the court will deem the presence of constructive notice if he fails to
check: Patman v Harland.
o Rationale? Court will not allow the underlessee (or the underlessor) to avoid the covenants merely for failure to
check
- Page 17 of 71 -

RIGHTS AND LIABILITIES OF PARTIES

POSITION IN LAW
ORIGINAL PARTIES LEASE REVERSION
L1 and T1 T1 assigns the lease to T2 L1 assigns the reversion to L2
Privity of contract / estate T&C Privity of estate - T&C covenants bind Privity of estate T&C
covenants bind However, the covenants does not bind covenants bind
Can include personal covenants subleases (no privity of estate) Only rights to sue only for
T1 liable for covenant for duration But restrictive covenants will bind subleases future breaches passes
of lease, even if assigns it to T2 since it runs with the land and not the estate over to L2.
who breached it (provided the (Tulk v. Moxhay). Forfeiture provisions
lease provides T1 and his Forfeiture provisions apply apply
successors in title Spencers case S 10 (benefit) and 11
L1 can choose to sue either T1 or (burden) of CLPA
T2 or both.
When L1 assigns reversion to L2,
all rights to sue on covenants
touching and concerning land
passes to L2
POSITION IN EQUITY
T&C covenants bind. Problem area T&C might not bind! s 10/11 LTA T&C covenants
No difference whether legal or Since assignments of contractual rights are bind.
equitable lease since they have privity limited to benefits and not burdens, only T2 can No difference whether legal
of contract. sue L1 but not vice versa (in a case of assignment or equitable lease, since s10
of lease) and 11 provides that lease is
2 possibilities: defined under s2 as an
Implied contract between L1 and T2 when T2 agreement for a lease
entered into possession whereby the lessee has
No distinction between legal and equitable become entitled to have his
leases should be recognised for these lease granted), i.e. an
purposes (Boyer v Warby) equitable lease.

- Page 18 of 71 -

PRIVITY OF CONTRACT o Clearly acceptable, as in Goldstein v Sanders

Covenant to undertake all reasonable repairs
o Clearly acceptable as in Martyn v Clue;
On the facts both the original landlord ___ and the original Parker v Webb
tenant ___ have assigned their leasehold estates. Clearly, the Covenant not to open after 8pm (time)
original parties are bound to each other in contract to perform o Although at first sight this may seem to be a
the covenants contained in their lease. Thus, in this problem, mere personal covenant, it is clear that it is
___ can sue ___, ___ can sue ___ in contract on all the intended for the benefit of other units on
covenants, whether or not they concern the land. This laibility the site. It is not for ___ personal benefit
continues throughout the life of the contract, that being the and does affect the mode of use of the land
term of the lease, although due to the wording of s10 of LTA, within the Swift formula. Hence, it seems to
a landlord will not be able to sue the original tenant after he touch and concern.
has parted with the land as that right is statutorily transferred Covenant to buy beer only from George (Clegg v
to the new landlord. Hands)
o This also touches and concerns the land
because it is a covenant relating to the way
COVENANTS: T&C LAND in which the business at a particular house
was to be carried on, and accordingly a
** First point that ___ should bear in mind is that should all covenant running with the land
other remedies prove to be unavailable, ___, the original o Even if it weren't, according to Tulk v
tenant, will still be liable throughout the term of the lease as a Moxhay, it is still enforceable if tenant
matter of contract. Thus, if all else fails, ___ can be sued for obtained a lease of the house at lower rent
the breaches of the covenants, even though the acts in breach because of this restrictive covenant and thus
were those of ___. ought to be restrained from dealing with the
house in a way inconsistent with the
A covenant that is touching and concerning the land is a covenant
covenant which affects landlord in his position as landlord and Covenant not to open a catering business (anti-
tenant in his position as tenant. There are 3 tests to satisfy: [1] competition covenant)
Covenant was beneficial for the owner of the reversionary o Affects the mode of use of land and is
interest, and if separated from the reversion, ceases to be of intended to benefit land granted by him,
benefit; [2] Covenant affects the nature, quality, mode of user thus T&C land
or value of the land of the reversioner [3] The covenant is not
expressed to be personal (that is to say, neither being given Lord Oliver in Swift Investments (UKHL1989), without
only to a specific reversioner nor in respect of only of a intending to state an exhaustive guide, laid down the
specific tenant) (Kumar v. Dunning, approved in P & A Swift following as a working test as to whether a covenant touches
Investments v CESG). A return of security deposit is a personal and concerns land:
obligation and thus it does not touch and concern the land 1. The covenant benefits the reversioner for the time
(Hua Chiao Commerical Bank, followed in UMBC v. Goodhope being, and if separated from the reversion ceases to
Realty & Ors). A covenant for surety normally satisfy the 3 be of benefit to the covenantee;
tests and it is thus a covenant that touches and concern the 2. The covenants affects the a) nature, b) quality, c)
land (Coronation Street Ltd v Ingall Industries Ltd, following mode of user or d) value of the land of the
Swift Investments). reversioner;
3. The covenant is not expressed to be personal (not
Examples being given only to a specific reversioner/tenant)
Covenant that premises shall not be used for the 4. The fact that a covenant to pay a sum of money will
manufacture of household appliances not prevent it from touching and concerning land so
o This is a covenant restrictive of the user of long as the three foregoing conditions are satisfied
premises and prima facie touches and and the covenant connected with something to be
concerns the land. It seems to fall within the done on, to or in relation to the land
Swift formula: see Williams v Earle, in which
property was restricted to domestic use only
Covenant not to assign or sublet without consent
- Page 19 of 71 -

TENANCY AND PAID DEPOSITS ASSIGNMENT
The court in Hua Chiao Commercial Bank (PC1987) similarly
affirmed the test in Swift Investment. In that case, the L A N D L O R D A S S I G N S R E V E R S I O N
covenant concerned the obligation of the landlord to return S C E N A R I O : L 1 L 3 | T 1
the deposit paid by the original tenant as security for the E I T H E R L 3 S U E S T 1 O R T 1 S U E S L 3
performance of the covenants of the lease, and the issue was
whether the assignee of the landlord was bound by the ** Requires covenants to run with the reversionary interest
covenant to return to the original tenant the deposit. The (ss.10-11, CLPA; s.86(2), LTA)
Privy Council held that the assignee of the landlord was not
affected by the covenant; it was not one which touched and Since the ________ and ______ does not have privity of
concerned land, for it was perceived as a personal obligation contract, the only way for ___ to sue _____ is to establish
(payee rather than landlord) and that it does not per se affect privity of estate.
the nature, quality or value of the land during or at the end of
the term. There are two ways to establish privity of estate, either via
common law (Spencers Case) in which the covenants will run
This decision was also followed in United Malayan Banking with the term and bind the assignee of the lease (T2) or via ss.
Corp v Goodhope Realty (MA1989). Taking fairly large 10-11, CLPA (which is applicable to registered land, by virtue
deposits from tenants to ensure due performance of the of s. 86(2), LTA) in which the covenants run with the
covenants is a common practice in Singapore and the decision reversionary interest and bind the assignee of the reversion
will be viewed with dismay by tenants. (L2) instead.
To circumvent this legal pitfall, the terms of the
lease could provide for the passing of the deposit by In our present case since ___ wants to sue ____, this will
the landlord to his assignee and for the tenant, on require that the covenants of the head lease to run with
assigning the lease, to pass the right to payment on reversionary interest to bind a subsequent landlord (L2) and
termination of the lease. this will go under ss. 10-11, CLPA which is applicable to
**These additional terms may well render the registered land, by virtue of s. 86(2), LTA. s. 10 allows benefits
covenant 'extricably bound' with the performance of the land to run with the reversionary interest while s. 11
of the other covenants (Moss' Empires Ltd v allows the burdens to run with the reversionary interest and
Olympia) bind the assignee L2. However, the covenants must be having
reference to the subject-matter thereof in other words, the
covenants must be touching and concerning the land.

(If want to apply to equitable leases:
On the plain reading, ss.10-11 might seem to apply to legal
leases only. However, if read together with s. 2, CLPA which
defines lease to include an agreement to grant a lease (i.e.
an equitable lease), it is submitted that ss.10-11 applies to
equitable leases too. Though a counter argument might run
that w.r.t. registered land, s. 86(2) of LTA only imports Part 3
of CLPA (which includes s 10 and 11) and not s. 2 of CLPA and
hence this argument does not stand, it is submitted that Part 3
of the CLPA must necessarily be read with s. 2 of the CLPA
(preliminary definitions) and hence this argument stands.

A covenant that is touching and concerning the land is a
covenant which affects landlord in his position as landlord and
tenant in his position as tenant. There are 3 tests to satisfy: [1]
Covenant was beneficial for the owner of the reversionary
interest, and if separated from the reversion, ceases to be of
benefit; [2] Covenant affects the nature, quality, mode of user
- Page 20 of 71 -

expressed to be personal (that is to say, neither being given reasoned, most do agree that the result is a fair. Nonetheless,
only to a specific reversioner nor in respect of only of a it is submitted that there is no principled reason why privity of
specific tenant) (Kumar v. Dunning, approved in P & A Swift estate should not apply to equitable lease (besides the mere
Investments v CESG). fact that it is a common law principle) since it arrives at a fair
results. Alternatively, even if privity of estate does not apply
**Apply to facts, is the covenant touching and concerning the to equitable leases, it is submitted that the court should imply
land? a new contract between the lessor (L1) and the assignees (T2)
when the lessor accepts rent from the assignee who has
entered into possession (Buckworth v. Johnson). Thus, the
T E N A N T A S S I G N S L E A S E burden and benefit should also bind T2 to L1 via privity of
S C E N A R I O : L 1 | T 1 T 3 contract.)
E I T H E R L 1 S U E S T 3 , O R T 3 S U E S L 1
**Apply to the facts is it a legal lease?
** Requires covenants to run with the term (Spencers Case)
With regard to the second requirement, the court in Spencers
Since the ________ and ______ does not have privity of Case drew a distinction between a covenant in esse (i.e.
contract, the only way for ___ to sue _____ is to establish something already on the premise demised, such as a
privity of estate. covenant to repair a house), and a covenant in posse, (i.e.
something new to be done, such as building a house). Only
There are two ways to establish privity of estate, either via covenants in esse, if it touches and concerns the land, will be
common law (Spencers Case) in which the covenants will run attached to the land and travel with the term. On the other
with the term and bind the assignee of the lease (T2) or via ss. hand, covenants of posse will not bind the assignees unless
10-11, CLPA (which is applicable to registered land, by virtue the lessee (T1) had expressly covenanted for himself and his
of s. 86(2), LTA) in which the covenants run with the assignees (T2) (Spencers Case). The original tenants
reversionary interest and bind the assignee of the reversion contractual liability only ends until upon the expiration of the
(L2) instead. original term on the contract (City of London Corpn v Fell).

In our present case since ___ wants to sue ____, this will **Apply to facts, is it covenant in posse or in esse?
require that the covenants of the head lease to run with the
term and bind a subsequent tenant (T2) and this will go A covenant that is touching and concerning the land is a
under common law (Spencers Case). Under Spencers Case for covenant which affects landlord in his position as landlord and
the benefits and burden to travel with the term and bind the tenant in his position as tenant. There are 3 tests to satisfy: [1]
assignees of the term, 2 conditions must be satisfied: (1) it Covenant was beneficial for the owner of the reversionary
must be a legal lease, (2) only covenants that touch and interest, and if separated from the reversion, ceases to be of
concern the land may travel with the term. benefit; [2] Covenant affects the nature, quality, mode of user
With regard to the first requirement of a legal lease, Lord expressed to be personal (that is to say, neither being given
Denning, in Boyer v. Warby, held that equitable assignees are only to a specific reversioner nor in respect of only of a
also bound by the covenant that touch and concern the land. specific tenant) (Kumar v. Dunning, approved in P & A Swift
His rationale is that because of the fusion of law and equity, Investments v CESG). A return of security deposit is a personal
there is no distinction between legal and equitable lease. This obligation and thus it does not touch and concern the land
has been heavily criticized by many as poorly reasoned (Hua Chiao Commerical Bank, followed in UMBC v. Goodhope
because the Judicature Act only fused the administration of Realty & Ors). A covenant for surety normally satisfy the 3
common law and equity, not the substance. Thus, it is tests and it is thus a covenant that touches and concern the
submitted that Boyer v. Warby is bad law and the doctrine of land (Coronation Street Ltd v Ingall Industries Ltd, following
privity of estate only applies to legal lease, per Spencers Case. Swift Investments).

(If fighting to apply to equitable leases: **Apply to facts, is the covenant touching and concerning the
This has been heavily criticized by many as the Judicature Act land?
only fused the administration of common law and equity, not
the substance. While critics say that Boyer v. Warby is poorly
- Page 21 of 71 -

SUB-LEASE Where there is neither privity of contract nor privity of estate,

covenants are generally unenforceable, subject to two
exceptions (Tulk v Moxhay)
A sublease is different from an assignment in that in a
sublease, the tenant of the main lease remains a tenant as Exception 1 (benefits): If covenant touch and
such although he is simultaneously also the landlord of his concern land with notice, benefits can still run in law
tenant. and in equity: Kumar v. Dunning; P & A Swift
Investments v CESG (benefit of surety covenant runs)
A tenant may sublet for any period of time, so long as the
sublease is shorter than his own in duration. If, however, the Exception 2 (burden): Burden of restrictive
sublease is as long or longer than the duration of the lease, covenants binds in equity where there is notice.
the effect is assignment. The tenant of a periodic lease may o In a case of a registered lease/sale/transfer, it is
also sublet either for a fixed term or for a periodic lease of usually available in the land-register. Hence it is
similar periods. likely that the court will deem that there was
constructive notice if he fails to check
o In a case of an unregistered lease, the common
Difference between assignment and sublease law position is that the underlessee has the right
to check the head-lease. Hence, it is also possible
Importance of distinguishing an assignment from a sublease is that the court will deem the presence of
that in an assignment (as the lessee has disposed of his entire constructive notice if he fails to check: Patman v
interest under the lease to his assignee), there is privity of Harland.
estate between the landlord and the assignee. Consequently, o Rationale? Court will not allow the underlessee
covenants which touch and concern the land are enforceable (or the underlessor) to avoid the covenants
between them. merely for failure to check

Where there is a sublease, there is no direct relationship
between the sublessee and the head landlord; the lessee
remains as the tenant under his lease. Accordingly, there is no
privity of estate between head landlord and sublessee, and
the convenants do not bind.

The test to be applied to determine whether an assignment or
subletting has taken place is whether or not the lessee has
retained any interest under the lease. It is a matter of
substance and not of form.

Effect of sublease no privity of estate/contract

**Against subleasee: It is clear that there is no privity of
estate between A and B. B is a sub-tenant is in privity of estate
only with her own landlord, C. Thus burden of covenants do
not run to B under Spencer's case. However, A can still
enforce any negative covenants that T&C the land (as with the
coveannt restrictive of user) by injunction under the rule in
Tulk v Moxhay, provided that B has notice of them (as is most
likely: Gosling v Woolfe). Alternatively, A can choose to forfeit
the headlease.

- Page 22 of 71 -

MISCELLANEOUS
CONTRACT (RIGHT OF 3P) ACT
** Did tenant/landlord covenant to make assignees uphold
covenants?

What if there are covenants which are not touching and
concerning land?

1. Use CRPTA
2. Provided T1 makes T2 promise to uphold covenants
in head lease, then L1 may claim that the contract
purports to benefit L1.
3. Same logic for the contract between L1 and L2.
4. Sometimes, contract between T1 and L1 contains
promise that they will make their successors in line
promise to uphold the covenants in their subsequent
contracts.

PRIOR BREACH (TO ASSIGNMENT)

An interesting question is whether the assignee either of the
landlord or the tenant may sue or be sued for a breach of a
covenant (which touches and concerns the land) which occurs
before the assignment.
Duncliffe v Caefelin Properties (1989):
o Garland J noted that the present landlords
were certainly liable under the covenants for
the present state of disrepair;
o But the relevant statutory provision, s142 of
English Law of Property Act 1925, did not
entitle tenant to sue assignee of the
landlord for consequences of the breach
which occurred before assignment
S142 of English Law of Property Act is in pari materia
with s11 of CLPA = persuasive authority
Essentially, the sensible view is that after the
assignment, the assignee is the only person who is
able to sue.

- Page 23 of 71 -

REMEDIES from performance so there is no

breach.
ii. Where the covenants are
1. L'S COVENANTS + T'S REMEDIES independent but equitable set off
applies, both parties are in breach
EXPRESS COVENANTS except one party may set off his
claim against the other.
Most leases will contain a whole host of express covenants. d. L may only deny T this by expressly
There is no rule that a court will disregard the express stipulating so (Batshita International v Lim
covenants in a Walsh v. Lonsdale lease (since specific Eng Hock)
performance is the condition for Equity to intervene). 4. Termination
a. If L's covenant is a condition (or a very
serious breach of warranty using the Hong

Kong Fir test), T can terminate for breach
IMPLIED COVENANTS

1) Covenant to give T quiet enjoyment.
- The very basis of T claiming exclusive possession. 2. T'S COVENANTS + L'S REMEDIES
2) Covenant against derogation from grant.

- L cannot grant land on terms which effectively or
EXPRESS COVENANTS
substantially negative the utility of the grant.

- A lessor having given with one hand is not to take
1. Covenant to pay rent
away the means of enjoying it with the other (Lord
2. Covenant against assigning*
Millet, Southwark LBC v. Mills)
a. Leases will usually include a covenant to
Eg. you lease commercial property then L disallows you from
prevent T from assigning, subject to L's
letting customers into the building.
approval

b. When breached, it is usually viewed as a

one-off breach incapable of remedy. Thus L
TENANT'S REMEDIES IN CASE OF L'S BREACH
can forfeit the lease

c. T is well advised to include a covenant that L
1. Damages
shall not unreasonably withhold consent
a. As with any contract, L is liable in damages
d. S17, CLPA states that L cannot impose a fine
for breach
in exchange for L's approval
2. Specific performance
i. But this does not preclude L from
a. CL has long been prepared to order specific
seeking reasonable expenses in
performance for a L's covenant to repair
giving approval
(Jeune v Queens Cross Properties Ltd)
3. Covenant to repair
3. Set-off
a. Depending on outcome of negotiations,
a. Where the tenant is in arrears, the landlord
either L or T may bear the burden of repair
may sue for debt.
b. Regardless, there is usually an implied
b. Where the landlord breaches his covenants,
covenant that T will take care of the waste
the tenant may execute repairs and recoup
generated from his or her occupation
from future rents. Alternatively, damages
4. Covenant to insure
may be recoverable.
a. Should premises be damaged by fire, neither
c. Independence of covenant: While
party is liable to the other
covenants in leases are generally
b. Hence there is usually an express covenant
independent of one another, it does not
that one party will take responsibility of
prevent the ability of each party to plead
insuring the premises
and equitable set off against the other.
5. Covenant as to user
i. In interdependent covenants, the
a. Common to restrict user, e.g. for residential
breach of one excuses the other
premises, prohibit it from being used for any
biz or trade
- Page 24 of 71 -

b. Common for L to seek an injunction Appropriate test for whether covenant is indeed capable of
restraining continued breach in cases of T's remedy was discussed in Expert Clothing and it boils down to
breach whether harm to the landlord could be remedied.
For negative covenants, difficult as once the action is
done the covenant is broken (Scala House)
LANDLORD'S REMEDIES If breach of a negative covenant is 'continuing', it will
be regarded as sufficient to stop the offending action
Damages and thereby avoid forfeiture
o Similarly in Savva v Hossein, corut held that
there was no requirement that negative

covenants always should be regarded as
Specific performance
irremediable and that Expert Clothing test

should be applied individually to the facts of

each case
Distress (for arrears of rent ONLY)

In general, threatened forfeiture is a costly way of recovering
Source: CL. Right to distress need not be expressly
rent and Alan would be well advised to use the normal action
reserved (but can only be exercised by parting
for rent recovery.
holding the reversion)

Old CL remedy allowing L to impound T's goods to

force repayment. After seizure, T has a reasonable
preiod to discharge arrears before goods are sold off Source:
o Must be expressly reserved (s18(1), CLPA)
Governed by Distress Act (s4-12)
o But s93(1) LTA implies such a right into every
o Distress must be implemented by officer of
the court lease of registered land
Can apply to equitable lease since
o Landlord must apply for a writ of distress
s2 of CLPA includes agreement to
o L can only claim up to 12 months' arrears
preceding the application (s5) landlord create lease
But does not include leases below 7
must act quickly; cannot take his own time
years s87(5)
o Notice of seizure of goods and writ of
distress must be sent to the defaulter Parties can vary or contract out of
s93
o Option to sell after 5 days of no replies

Burden of proof for wrongful seizure is on party
challenging the Sheriff (Plaza Singapura v Cosdel) L must satisfy the following:
o Demonstrate that T's breach of covenant

entitles L to re-enter and forfeit lease

o No waiver of breach by L
Forfeiture or re-entry***
If L accepts rent after awareness of

T's breach for period in arrears
In general terms, in order for forfeiture to be available, the
after breach, L may be waiving his
lease must contain a right of re-entry. This is a stipulation that
right (Expert Clothing)
the landlord is entitled to re-enter the premises should the
If L has filed for a writ of possession,
tenant fail to observe their covenants.
no more timeous poenitentiae

(Protaz Co-operative Society)
However, the right of forfeiture for covenants other than to
o L must satisfy all stat. requirement
pay rent is controlled by statute, irrespective of whether
governing forfeiture e.g. notice before re-
forfeiture is by action in the courts or by physical re-entry.
entry
Landlord must serve a s18 notice specifying breach that is
o L must exercise power of re-entry either by
complained of, requirign compensation and requriing tenant
physically re-entering premises or serving
to rememdy breach if it is capable of remedy.
tenant with a writ of possession

Conditions for applying for forfeiture
- Page 25 of 71 -

1. Any covenant cast as a condition that directly exercise. If right is implied by LTA, L
entitles L to forfeit must wait for T to be in arrears for 30 days.
2. Breach of covenant to pay rent only
3. Continuing breach of ANY covenant for 30 Relief against forfeiture**
days** o S18(2), CLPA: Simply apply to court for relief;
at court's discretion, but court generally
Breach of ANY other covenant quite lenient
o Regardless of whether right is expressly o IF L has actually exercised right of re-entry,
reserved or provided by way of s93(1), L he still can get relief (Billson v Residential
must comply with s18, CLPA in exercising his Hillgate)
right of forfeiture o But if court order for forfeiture has been
Notice + demand for remedy (if given, then no more relief against forfeiture
breach is capable of remedy) (s18A)
within reasonable time o As for breach of covenant to pay rent, s
o Fight is always over whether breach is one 18(A) CLPA :
capable of remedy Reasonable time pay up
Traditional position: Most positive Ct order given still got 4
covenants are capable of additional weeks.
remedying while negative After that, barred from all relief.
covenants are not As one can tell, forfeiture is an extreme remedy thus
Not all negative covenants are ipso court grants T multiple defences against this oucome.
facto incapable of remedy but
breach of covenant by using
premise as brothel for immoral Repudiation of lease
purpose caused such defame as to
devalue premise (Rugby School v Rule: Contractual remedies are technically available
Tannahill) o Tan Soo Leng David (1998)
Covenant not to assign/sublet Always discuss dicta that short-
almost never remediable (Scala term leases more contractual while
House v Forbes) + requirement of long-term leases look more like
notice not even necessary (s18(8)) estates and less contractual
Modern approach: test for May suggest that this remedy only
forfeiture shifting from confined to short-term leases
remediability of breach to Duty to mitigate (SG)
remediability of damage caused by o Progressive Mailing House (1985)
breach i.e. whether remedy is HELD: Court said to look at the
practically able to compensate L duration of lease term.
(Expert Clothing v Hillgate) If the lease term is longer and
Appears that cessation is involves a lump sum purchase
sufficient to remedy price, it is more proprietary in
breach nature and less likely that
Akici: even once-and-for- contractual doctrines like
all breaches may be frustration, repudiation and
remediable mitigation will apply (Reichman v
Beveridge).
Breach of covenant to pay rent If lease term is short and where
o However, for breach of covenant to pay rent rent is the primary consideration,
(regardless whether right to forfeiture arises then more applicability for the
under contract or LTA), L does not need to contractual doctrines.
serve notice (s. 18(9)) Differs from forfeiture
o If right to forfeiture for arrears is express (eg. o Available to both L and T
can forfeit if in arrears for a day), L can
- Page 26 of 71 -

o No need to serve s18 notice (but per Oral agreement to surrender
ordinary contract law, must still elect to followed by a confirmatory letter
terminate) and the handing over of the keys.
Differs from surrender HELD: Valid surrender by operation
o T does not need to get L's acceptance of the of law. Implied surrender requires
termination an action that is inconsistent with
o Another advantage is that prospective the leasehold relationship (hence
damages after termination are recoverable operation of law based on the
as well intention and acts of the parties).
o Song Kim Puah v. Lim Hoe Chye (1954)
Similar to forfeiture, one's right to termination can be waived There was an oral agreement of
surrender, but after the agreement,
tenant remained on the premises
S6: DETERMINATION OF LEASE and continued to pay rent.
HELD: No surrender. Acts
Effluxion of time automatic subsequent to the agreement were
o But for registered land, s.92 LTA requires not inconsistent with the
notification in register to confirm that lease continuance of the tenancy.
has ended. Merger ( s67, L TA)
Notice to quit must be expressly reserved o Tenant buying up landlord's reversion
o Periodic tenancy is indefinite and requires o Converse of surrender
notice Holding over
o Period of notice depends on length of o With consent of L can become new
periodic tenancy periodic tenancy
Surrender o Without consent of L s.28(4) Civil Law
o Surrender of head lease may affect Act penalizes the T by subjecting him to
sublessees paying double rent or value.
o Both parties must consent Frustration
Unilateral abandonment by T =/= o General: No frustration of a lease even if
surrender premises are destroyed; lease is an estate in
Can be express or implied time that cannot be destroyed (National
o L not obliged to accept surrender and most Carriers v Panalpina)
will demand a monetary compensation Repudation
o S. 91, LTA: Express surrender. o Contractual doctrine of repudiation applies
Surrender at law requires a deed in in Singapore but not all types of leases.
the English language (s. 53(1), o Repudiation applies to leases in Singapore in
CLPA). appropriate cases. It is more appropriate for
Surrender at equity valid even cases where the element of a purchase of an
without a deed. interest in land is not significant or non-
Needs evidence in writing existent.
(s. 6A(d), CLA). o Where repudiation applies, the other party
If not, needs oral must mitigate his losses.
agreement (evidence by a o See above for Tan Soo Leng; Progressive
written memorandum is Mailing House
this correct?), followed by

sufficient part
performance.
o Fong Holding Pte Ltd v. Computer Library (S)
Ltd (1992)
- Page 27 of 71 -

Licences 3. CONTRACTUAL LICENCE**

A contractual licence is a contract between licensee and
licensor, usually for occupation of land. License gives licensee
NATURE OF LICENCES a personal right against licensor rather than a proprietary
interest in the land. Unlike bare license, which is granted
1. BARE LICENCES gratuitously, the contractual licence is founded upon valuable
consideration moving from licensee.
The classic description of a lease is that it is a "dispensation or Can be created via oral agreement, conduct and
license which properly passeth no interest, nor alters nor circumstances or even from the existence of a
transfers property in anything, but only makes an action contract. Formality is not required even though it
lawful which, without it, had been unlawful" (Thomas v may exist.
Sorrell (1673)). Contractual principles apply. Therefore, an implied
term may be read into the license agreement more
A bare licence is a personal privilege such that the licensee easily as compared to a lease where terms are usually
is not a trespasser. It is revocable at any time on reasonable definitively set out in the tenancy.
notice, and ends automatically when the licensee dies. It is o Officious bystander test
personal right, i.e. it cannot be assigned by the licensee. An
example would be a dinner invitation. It is now clear that either an injunction will be granted
preventing licensor from revoking the licence before its
A license can be implied under certain circumstances unless contractual date of expiry (Winter Garden Theatres) or even a
there is something additional in the objective facts which is decree of specific performance requiring the licensor to
capable of founding a conclusion that any such implied or permit the activity authorised by the licence to take place
tacit license was negated or was revoked (Halliday v Nevill). (Verrall).

Vulgarities are considered insufficient as withdrawal of license However, it should be noted that a licensor can nevertheless
(Gilham v Breidenbach (1982)). defeat the licence by conveying the property to a 3P during
the period. In such cases, the licensee may have a good claim
Under common law, termination of a bare license is "at will" in contract against the licensor, but the licensee has no rights
(Tan Hin Leong v Lee Teck Im (SGHC2000)). to use the land against the 3P.

2. LICENCES COUPLED WITH A GRANT REVOCABILITY

Rule #1: The revocability of a contractual license depends on
1. A license to enter a man's property is prima facie
the terms of the contract, either express or implied.
revocable

2. But it becomes irrevocable even at law if coupled
Common law:
with or granted in aid of a legal interest conferred
Verrall v Great Yarmouth (UKCA1981) endorsed
on the purchaser
Megarry J's view in Hounslow and went a step
3. And the interest so conferred may be a purely chattel
further: went beyond an injunction to stop the
interest or an interest in realty
revocation and instead granted a decree of specific
o In the case of James Jones, the interest is
performance to compel licensor to perform
vested in the legal property of the timber
o A contractual licence is irrevocable: Winter
4. Issues of revocability and assignability of a license
Garden.
coupled with a grant take colour from the profit
o Where it was appropriate to do so, the court
granted
would protect any interest, whether an
5. License is coextensive with the grant that it is
estate in land or a licence of a transient
attached with i.e.if grant is for 10 years, then license
nature (short period), by injunction or
is similarly for 10 years
specific performance

o The fact that a licence can be revoked does

not lead inevitably to the conclusion that
- Page 28 of 71 -

damages are the only remedy for revocation.
In a proper case, the court would grant
specific performance of a contractual licence Rule #1: A contractual licence in itself does not confer an
even where it had been repudiated before interest in land and thus does not bind 3P.
the licensee had entered into possession.
o There is no difference between (i) when the King v David Allen & Sons (UKHL1916)
licence is revoked prior to possession; and o Agreement in writing between P licensee and D
(ii) when the licence is revoked after part licensor in July licensor agreed give permission to
performance, i.e. at the time of the affix posters and advertisements on walls of picture
revocation the licensee was in possession of house; not to permit other person to affix any
the premises. Where there is wrongful advertisement; take proceedings against any person
revocation, the court will grant equitable doing so D subsequently agreed to assign to trustee
relief. for picture house coy all his interest, but when coy
was incorproated, the lease contained no reference
Singapore: to agreement of July
Tan Hin Leong v Lee Teck Im (SGCA2001) o issue: whether the contractual licence between the
Case facts: HC held that the mum did have a contractual parties binds the 3P coy held, it was a contractual
licence as opposed to a bare licence and on the terms of the licence, hence no effect against 3P agreement did
contract she could remain living in the house for her life not create an interest in land but merely created a
affirmed by CA personal obligation; licensor liable for damages
Where the contract states that the licence is for a
definite duration, courts will enforce the terms of

the contract so that the licence is irrevocable for the
Rule #2: Constructive trust analysis
stated period;

Where contract does not expressly provide for a
Historic position
definite term, courts will seek to construe the
In Binions v Evans, Lord Denning held that a contractual
contract so as to imply terms for the termination
licence can give rise to an equitable interest which binds
from the contract itself as well as from circumstances
third-party purchaser who 1) takes with notice the contractual
of the case
licence and 2) pays a reduced price for property.
Reconciled with CAs holding in Neo Hock Pheng,

where court held that contractual licence was
General rule
terminable at will, with the principle that where the
This has been rejected by the HL in Ashburn Anstalt where the
contractual licence has been construed to be
court upheld the general principle that a mere contractual
perpetual, it would presumably be void for
licence to occupy land was not binding on purchaser even
uncertainty so licence becomes a bare licence and
though he had notice of licence.
hence terminable at will

o Criticism: This would go against apparent
Exception
intention of parties
However, the court also provided the exception that a

constructive trust would be imposed where the conscience of
the 3P had been so affected that it would be inequitable to
IMPACT ON THIRD PARTIES allow him to deny the claimant an interest.
Constructive trust appropriate when
The most effective manner in which a licensee can bind a third rd
o The 3 party had notice of the licence and
party successor in title is to enter into a novation agreement paid a lower price for the land, OR
with the licensor and 3P. Although the sucessor in title to the rd
o The 3 party expressly undertook to honour
licensor's land may not be bound by the contractual licence, a the contract or give assurance to this effect
3P who enters the premises without the consent of the (where the obligation of conscience has
licensee may be sued for trespass. been acknowledged i.e. in writing, in respect
Evaluation: where the rights of the licensee are of the relevant contractual entitlement) OR
protected by the courts against some 3P, does the o The contractual licence is not enforceable
licence not resemble a property interest? rd
against the licensor in such cases, the 3
- Page 29 of 71 -

partys agreement to take subject to the words or conduct in his mistaken belief, causing the occupier
rights of the licensee appears not as an to expend money on the land or otherwise suffering a
attempt to immune the licensor against detriment.
contractual liability, but rather as an entirely Inchoate: Where the equity remains inchoate, it is
rd
willing assumption of a new conscientious unlikely that it binds the 3 parties since even
obligation towards the licensee. defined contractual rights does not.
Crystallised: However, once it is crystallised, then the
The decision effectively shifts the focus from the state of the issue of binding effect on third parties is resolved.
interest (proprietary) to the state of mind (inequity) The licence may have a conveyance, perpetual
(Ashburn). licence, easement or monetary compensation.

Rule #3: Contract (Rights of Third Parties) Act

Right of third party to enforce contractual term
2. (1) Subject to the provisions of this Act, a person who is
not a party to a contract (referred to in this Act as a third
party) may, in his own right, enforce a term of the contract if

(a) the contract expressly provides that he may; or
(b) subject to subsection (2), the term purports to confer a
benefit on him.
...
(3) The third party shall be expressly identified in the
contract by name, as a member of a class or as answering a
particular description but need not be in existence when the
contract is entered into.
(4) This section shall not confer a right on a third party to
enforce a term of a contract otherwise than subject to and in
accordance with any other relevant terms of the contract.

ASSIGNABILITY

The rules regarding assignability rest entirely on contract. The
benefits of a contract may be assigned, but the burdens may
not.

4. LICENCE COUPLED WITH EQUITY
A licence to occupy land belonging to another which is not
based on contract, and even if not coupled with a grant of an
interest may give the licensee rights beyond a bare licence
because of the circumstances surrounding the giving of the
lease.

An example would be where the owner of the land permitted
the occupier to occupy the land and either (1) acquiescing the
occupiers mistaken belief that he has the rights to the land or
will be conferred rights to the land, or (2) encouraging him by
- Page 30 of 71 -

Proprietary Estoppel
Knowledge of precise nature of detriment immaterial,
as long as risk of representee acting in reliance: Crabb
v Arun
GENERAL
Also, the representation can be express, implied or
acquiescence. As long as the party encouraged or acquiesced
Proprietary estoppel operates as the creation of rights arising the representees action it is sufficient (Pascoe v. Turner).
from the action of equity on an individuals conscience; it is Agents of the fee simple owner, such as the family, could give
both a sword and a shield. the representation as well (Greasley v. Cooke).

Sometimes, a right is created which binds and benefits However if parties are commercial parties negotiating at arms
successors in title at common law; but more frequently, length, court will not consider a pre-contractual arrangement
however, the operation is equitable i.e. equity arising out of as sufficient to form proprietary estoppel because commercial
acquiescence, in which case the revocation can be restrained contracts are expected to be certain (A-G of Hong Kong v.
by injunction. Humphreys Estate).

Essentially, proprietary estoppel provides the restraint upon **Are parties commercial parties?
the exercise of the strict legal entitlements in circumstances
of inequity. Testamentary promises are inherently revocable. But courts
have been willing to hold such promises as valid if they are
consistent and unambiguous intimations of testamentary
S1: RAISING PE intent, coupled with substantial acts of reliance that make
clear that the assurance is more than a mere statement of
To raise proprietary estoppel, 3 elements must be present. present (revocable intention) but is tantamount to a promise
There must have been a clear representation made by the (Giller v Holt).
party who is to be estopped, the claimant must have relied on
the representation, and there must be a detriment
(unconscionable disadvantage) suffered by the claimants.

RELIANCE
All these elements must lead to answering the overarching Next is the issue of whether the representee relied on the
enquiry of whether it is unconscionable for the representor to representation. Reliance includes more than just monetary
insist on his strict legal rights (Hong Leong Singapore Finance, expenditure but also acts that would result in a change of
affirmed in Chiam Heng Luan). position for the representee, such as performing services and
taking care of the representor, (Jennings v Rice and Greasley
v. Cooke).

REPRESENTATION If the representation is calculated to influence a reasonable
With regard to representation, while it need not be precise, it average person, there is a rebuttable presumption of reliance
cannot be vague or unspecific (Lissimore v. Downing). The (Coombes v Smith) and the burden is on the representor to
focus is on the inevitability of the entitlement not its nature or prove there was no reliance (Greasely v. Cooke).
quantum. Whether the representation is sufficiently clear
depends on the context and whether the parties intended it Reliance can also be inferred if the representee is acting in a
to be taken seriously (Thorner v. Major). way prejudicial to herself after assurances by the representor
(Jennings v. Rice).
**Is it clear and specific here?
Encouraged & acquiesced - sufficient: Pascoe v Turner But there will be no reliance if the representee acted, though
By family: calculated to influence - sufficient: Greasley seemingly in accordance with the representation, was merely
v Cooke for her own wanting to have a change of lifestyle (Coombes v.
Can be property or entire estate; but not vague or Smith).
unspecific: Lissimore
Sufficient clarity, depends on context: Thorner v **So who has the burden of proof? Is there reliance here?
Major
- Page 31 of 71 -

o the changes in the defendants assets and
circumstances.

DETRIMENT If the representee has been benefitting from the
Next, there must be detriment suffered by the representee in representation for quite a while, the court could find that the
reliance of the representation. The detriment must be distinct inchoate equity has been extinguished (Sledmore v Dalby;
and substantial (Sledmore v Dalby), one which must shock the Chiam Heng Luan) and the court may give no further reward.
conscience of the court (Cobbe v. Yeoman) as granting of Sometimes, equity can even be satisfied by reasonable
proprietary estoppels is a drastic measure giving a person monetary compensation if this was fair in the circumstances
proprietary interest even though he gave no consideration (Khew Ah Bah - $15,000 tenancy coupled with equity >
and did not comply with the required formalities. licence coupled with equity).
Extinguishment of equity:
**Is detriment unconscionable enough? Has the inchoate o Sledmore v Dalby (rent-free over 18 years)
equity been extinguished? o Chiam Heng Luan (low rent over 50 years)
Detriment can be quantified if it consists of solely
expenses but when it includes the burden of care for
S2: SATISFACTION OF EQUITY an old person and having to be subservient to her
wishes and moods, it is very difficult to quantify in
Short of an actual promise, if he, by his words or conduct, so money terms. Further, there may be some
behaves as to lead another to believe that he will not insist on countervailing benefits (i.e. free bed and board). In
his strict legal rights - knowing or intending that the other will such cases the court has to exercise a wide
act on that belief - and he does so act, that again will raise judgemental discretion. (Jennings v Rice)
equity in favour of the other; and it is for a court of equity to
say in what way the equity may be satisfied Expectation loss
- Crabb v Arun DC The courts tend to grant expectation interest in (i) bargain
cases, where there is a mutual understanding in reasonably
Once the requirements of proprietary estoppel are satisfied, clear terms and (ii) where there is substantial detriment
courts will then find the representee to have an inchoate suffered by the representee. E.g working on farm without pay
equity which will be satisfied by the court. While courts have a for 30 years (Thorner v Major), devoted best years of life to
wide discretion for relief, courts will adopt a minimalist representor (Gilette v Holt) Note that most likely wont grant if
approach and do what is necessary to do justice to achieve a inequitable to promisor (force him to leave his only home etc)
just and conscionable result but nothing disproportionate or the need for a clean breack (Gillette v Holt).
(Crabb v Arun) i.e. minimum equity. There must be an
element of proportionality between the expectation, Reliance loss
detriment and reliance of the claimant (Jennings v. Rice In contrast, the courts will most likely grant reliance interest
adopted locally in Hong Leong Finance). where (i) the expectation is out of proportion to the detriment
and where (ii) loss is readily calcuable in money terms. For
** What remedy will be proportionate here? example, monetary compensation was sufficient in Jennings
Relevant considerations include (Jennings v Rice): considering the representee had provided service for 4 years
o the uncertainty of the claimants (relatively a shorter time period). Further, it seem that our
expectations, courts have adopted the reliance losses approach in Hong
o their extravagance when compared Leong Finance and LS Investment.
proportionately with the detriment he has
suffered, It is submitted that this is the right approach as the
o the difficulty in quantifying in financial terms proprietary estoppel is rooted in equity (Crabb v. Arun) and its
the detriment suffered, fundamental purpose was to prevent detriment and the
o any misconduct on the part of the claimant, award of compensatory damages based on reliance losses
o the conduct of the defendant, would serve as the minimum equity required to reverse or
o the appropriateness of the remedy given the neutralize the detriment suffered (Commonwealth of
breakdown of the relationship, and Australia). Furthermore, reliance measure will solve the
conundrum with contract since contractual relief seem a lot
more stringent than the requirements of proprietary
- Page 32 of 71 -

estoppels and still does not grant full expectation relief
(Gardner in The remedial discretion in proprietary estoppel)
S3: IMPACT ON 3P

** What remedy will be proportionate here? Compare money There is a debate as to whether proprietary estoppels bind
and time spent. third party purchasers. As explained in Smith, How
Proprietary is Proprietary Estoppel?, this is because
Should there be remedial flexibility? proprietary estoppels results in an inchoate equity, and thus
There is contention on whether the court should exercise in principle it is incorrect for purchaser to be bound where
remedial fliexiblity. On one hand, it is argued that remedial there is no identifiable equitable right yet. Neither does it
flexibility allows the court to be able to grant remedies that seem feasible to argue that a remedy, once given, has a
are proportionate and fair in individual case. On the other retrospective effect to bind third parties. The problem is even
hand, it has been critisized to be generationg deplorable more acute when the court merely orders a personal remedy.
uncertainty as it is inconsistent and generate wildly disparate In addition there is a tension with contractual license. Ashburn
results. Hence, there is a need to formulate a clear objective Anstalt v. Arnold was clear that contractual licenses simpliciter
for proprietary estoppel. In other words, the court should does not bind third party purchasers. If the requirements of
decide whether PE is used to enforce the expectations of the contracts are generally more demanding than for estoppels,
parties or to prevent detriment by awarding compensatory one would expect that the estoppels license has a weaker case
damages. for proprietary status.
Expectation interest should be respected because
estoppel operates to preclude the departure from Nonetheless there are cases which have held that proprietary
assumed state of affairs and some lesser form of estoppels bind third parties, especially if the third party is a
relief should only be awarded if an expectation-based volunteer or a trustee who will then step into the shoes of the
relief in inequitably harsh (Deane J, Verwayens case) representor and be bound by the proprietary estoppels too
Reliance interest should be the objective because (Inward v. Baker; Re Sharpe). It will also be binding on third
proprietary estoppel is rooted in equity (Crabbe v parties who have actual notice of the agreement between the
Arun) and its fundamental purpose was to prevent representee and representor (ER Ives Investment v. High).
detriment and the award of compensatory damanges
based on realiance loss would serve the minimum While Singapores position is currently unclear, it is likely that
euiqtry require to neutralize detriment suffered Singapore will recognize that proprietary estoppel is a
(Commonwealth of Australia). Furthermore, reliance sufficient proprietary right enough to bind third parties. This is
measure will solve the conundrum with contracts because if we look at s. 95(2), LTA, a license that relates to
since contractual relied is a lot more stringent tehn enjoyment or use of the land which is binding on the licensor
the requirement of PE but still does not grant full can constitute an interest in the land and this interest is
expectation relief. caveatable under s.115. Thus, it would appear that proprietary
estoppel is allowed to bind third parties.
It is submitted that the court should be able to exercise
remedial discretion and it is not necessary to choose a clear
objective
Both reliance and expecttaion loss have apart to play
depending on circumstances, and flexibility is impt to
achieve justice in individual cases
An overly rigid approach may hamper the ability of
the court to achieve equity- and ultimately PE is
rooted in equity

- Page 33 of 71 -

S4: TRANSFERABILITY Original owners liability post-transfer

On principle, it is difficult to see why he should not remain
The personal/proprietary nature of the inchoate equity should liable since the equity is raised by his unconscionable conduct
not affect the transferability since even personal rights are and the courts are not limited to satisfying the equity by
transferable. granting an interest to the property which is no longer held by
him.
After crystallisation, the transferability depends on the form
the equity takes i.e. if it is a grant of fee simple, then it is

transferable. However, if it is a licence, the issue of strong
personal element to the estoppel arises.

Therefore, an estoppel licence may not be assignable (though
it depends on the terms of the licence). See example in ER Ives
Investment, where the obiter suggests that the licence could
be enjoyed by the licensees successor-in-title, so long as the
licensors building stood on the licensees land. However the
facts are special since the doctrine of mutual benefit and
burden could support the continuance of the licence
regardless as original licensee or successor-in-title. Hence, the
applicability of the dictum remains to be seen.

- Page 34 of 71 -

CASE REPRESENTATION, DETRIMENT RELIANCE SATISFACTION OF
ENCOURAGEMENT OR (must flow from EQUITY
ACQUIESCENCE deserted repn!)
PHYSCIAL IMPROVEMENT TO LAND CASES
Encourage or acquiesce interests in land (traditional cases)
Crabb v Arun Neighbours: right of access at Sold part of land. Sold land in reliance of Grant of right of
(1976) point B and right of way Gates at B removed, representation. access at B and right
along road. and fenced, landlocked. of way along road.
Erecting gates and fences at No payment
B. landlocked for long
period.
Taylor Tenant and landlord: Expended large sum of Expended money in Renewal of option
Fashion encouraged belief in money on premises reliance of granted. Vindication
(1982) entitlement to renew option. (lifts, and take lease of encouragement. Quid Pro Quo
adjourning premises )
ER Ives Neighbours: acquiesced to Burden of 1 ft Reliance on expectation Mutual benefit and
Investment right of way foundation which of right of way burden.
(1967) encroached on land. Right of way granted
Expended money in
building garage only
accessible by right of
way
Kew Ah Bah Tenant and landlord: rented Built attap house Built on land not Reasonable
(1971) land and built attap house on belonging to him in compensation of
it. reliance of expectation $15,000 and vacate in Policy?
to stay as long as rent is 3 months Renewal of
paid land use
Commercial Context parties expected to enter into contract
Hong Leong v Developer to contractor: Resumed and Significant factor that Pay difference in value
UOB Complete construction for continued work influenced decision to of property and work
Vindication
(2007) one floor of development resume and complete done conveyance of Quid Pro Quo
work property
LS Owner to subsequent buyer: Expended $543K on Expended on reliance Reimbursement of all
Investment v MUIS was aware of sale and redevelopment of land on acquiescence expenditure for
MUIS knew of likely redevelopment works
(1998) redevelopment; but stood by
and allowed for works to
carry on
Chiam Heng Landlord to hotel tenant: Paid property tax and - Extinguished over 50
Luan stay on the premises for so maintained property years of low rent
(2007) long as it operated a hotel
business; encouraged by [Ct found detriment Policy?
actions of owners was part of the deal] uncertainty
[Ct found no representation] in
Cobbe v Landlord to developer: Expended sum for No reliance N.A. commercial
Yeoman Oral agreement in principle planning permission knowledge that context
(2008) Cobbe to apply for planning [Ct found sum agreement was not
permission. Upon grant, land expended knowing that enforceable
will be sold & profits shared agreement was not
[Ct: no specific interest in enforceable]
land, subject to negotiation]
AG v Landlord to developer: Acted in detriment No reliance N.A.
Humphrey s Commercial context; parties [Ct found it was not knowledge of right to
Estate entered into agreement in unconscionable] resile
(1987) principle subject to
contract

- Page 35 of 71 -

PERSONAL ASSISTANCE CASES
Oral Testamentary Promises - parties NOT expected to enter into contract
Thorner v Contextual: between 2 men Substantial work on farm Worked in reliance of Granted inheritance of
Vindication
Major who communicated obliquely for 30 years without pay assurance that he agricultural assets (and
Quid Pro Quo
(2009) but understood each other. would inherit not whole estate
Suggestions to settle his minimum equity to do
estate duties and the rest will justice)
be his.
Inward v Father to son: why not out Built bungalow based on Expended effort and Trustee bound by sons
Baker the bungalow on my land and own labour and expense. money in reliance of equity to stay.
(1965) make the bungalow a little Trustee sued for representation Allowed to stay as long as
bigger possession. he desires.
Gillett v Old man to schoolboy (25 Devoted best years of his Relied on assurances Transfer of freehold for
Holt yrs): Repeated assurances life working for him, as he was a man of family home, $100,000 to
(2001) that he would succeed to his showed loyalty and his words keep out of family
farming business and inherit devotion to his business, business
property including the house. social life and personal
wishes
Jennings v Widow to bricklayer: need Slept on her sofa every One reason for Awarded $200,000 as
Rice not be worried not being paid night, looked after her acceding to Rs reasonable compensation
(2003) for errands; he would be prescriptions, dress her, demands belief of for services
alright and she would see toilet, meals and gardening benefit from her
Reliance QPQ
to it; this will all be yours death unclear;
one day disproportionate
Domestic Context - parties NOT expected to enter into contract
Pascoe v BF to GF: the house and Expended money on Expended effort and Grant of fee simple (if
Turner everything in it was yours; repairs, improvements and money in reliance of licence, cannot register Vindication
(1979) encouraged & acquiesced to redecorations and furniture representation and might be ousted by Quid Pro Quo
improvement equitys darling; cannot
take loan for future
improvements)
Goh Swee Mother to son: transfer 50% Withheld from enforcing Withheld on reliance Granted half share of the
Fang share to mother and when legal right to $20,000 for 16 of promise to share sale proceeds
(1994) she sold property he would years; assisted in procuring proceeds
receive half share contractor for renovations;
paid part of the costs
Greasley v Family to maid: various Did house chores without Presumption of Allowed to stay on in the
Cooke representations, led her to payment; looked after reliance house
(1980) believe she can stay rent free mentally ill daughter
for as long as she like
Re Sharpe Nephew to aunt: acquiesced Expended $12K for Reliance on Entitled to stay till
(1980) and encouraged to spend in property, and $2K for expectation to look repayment of contribution
order to stay with him and fittings, paid debts to after her
wife prevent bankrupt
Sledmore Mr S to D: wanted to give the Carried out substantial Relied on assurance Extinguished over 18 years
v Dalby house to D, encouraged and work of improvements on and stayed rent free of rent-free stay
(1996) acquiesced the house after daughters [Ct found Mrs S vulnerable
improvements death and in pressing need for
house, D was employed
and stayed elsewhere]
Lissimore BF to live-in GF: "I bet you No detriment: Gave up job, No reliance she N.A.
v never thought all of this turned down job offer, moved in for the
Downing would be yours in a million bought car with previous exciting opportunity
(2003) years, Lady of the Manor; divorce settlement sum, and not for the
that he always looked after devoted time to maintain representation
his GF and improve estate.
[Ct found insufficient [Ct found she hated her job
assurance not related to anyway]
any specific property]
Coombes Cohabitees (married to other No detriment: giving birth; Presumption of N.A. (but on terms:
v Smith people): would always leaving husband, looking reliance provide until child reaches
(1996) provide for her and have a after house and child, 17)
roof over her head improving house and not
looking for job Reliance QPQ
unclear;
disproportionate
- Page 36 of 71 -

Mortgages EQUITABLE MORTGAGE / LTA

Under the LTA, equitable mortgages are not registerable, but
may be protected by a caveat.
CREATION (LTA)
Also, failure to observe with the above requirements to
The LTA under s. 68, LTA, provides for 2 kinds of security create a legal mortgage creates an equitable interest.
interests in the land the LTA mortgage and the charge.
The most common method of creating equitable mortgage is
Distinction lies in the purpose for which security is required by 1) deposit of title deeds which is done with 2) the
the type of obligation that is being secured. intention to create a mortgage. Mere deposit of title deeds is
S. 68(1), LTA: Where the payment of a debt is to be in itself insufficient. Intention has to be to create a security
secured, mortgage may be registered. and not for safekeeping. Not required but good to have some
S. 68(2), LTA: Where payment of a rent-charge or any writing accompanying deposit to prove intention (UMBC v
periodical sum, or any money other than the Masagoes Noer).
payment of a debt is to be secured, a charge may be
registered. Although no formalities are required to create a valid
equitable mortgage, it is good to register a memorandum of
The LTA mortgage is not a mortgage in the strict sense of the an equitable mortgage by the deposit of title deed for reasons
word because it takes the form of a security by of validity and priority against subsequent purchasers.
hypothecation rather than a security by transfer of title. Butler v. Fairclough (1917)
There is no transfer of title it is only a charge on o HELD: Equitable mortgage created by the
the estate, but it can be registered and the resultant deposit of duplicate certificate of title and
position is that both the mortgagor and the this gives the depositee an equitable
registered mortgagee are registered proprietors over interest which may be protected by a
the land. caveat.
S. 77(3), LTA: Mortgagor is deemed to have the
equity of redemption.
S. 77(1), LTA: Mortgagor has the right to discharge Remedies available to the parties of an equitable mortgage
when he has paid up and fulfilled his obligations.
o This means mortgagor deemed to have the Remedies expressly provided for in the mortgage agreement.
equitable right of redemption. E.g. An express power of sale.
o Refer to 3.2.B. Action for Redemption under
the Land Titles Act. Where land is LTA land, then remedies under general law and
S. 76(1), LTA: Mortgagee has the right to apply to the the CLPA is still available unless it is inconsistent with the LTA,
court for foreclosure. as per s. 3(1), LTA.
Societe Generale (1989)
o Mortgage not fully registered when the
mortgagee exercised his power of sale.
LEGAL MORTGAGE / LTA Mortgagor argued that the power of sale
Under the LTA, registration is required before a legal cannot be exercised because [1] land was
mortgage arises. unregistered and hence LTA remedies not
S. 45(1), LTA: No instrument until registered is applicable, and [2] mortgage was not
effectual to pass estate or interest in land under the registered and hence no power of sale under
LTA. s. 69(1), LTA.
S. 51(1), LTA: Use of standard forms approved by the o HELD: The LTA does not oust the application
Registrar. of general law and the CLPA unless it is
S. 68(1), LTA: Registered land may be mortgaged to inconsistent with the LTA (s. 3(1), LTA). As
secure payment of a debt by an instrument in the long as the mortgage was done by deed,
approved form. then the power of sale under s. 24, CLPA
exists.

- Page 37 of 71 -

MTGOR (M)S RIGHTS COLLATERAL ADVANTAGE

At one point, collateral advantages clauses were uniformly
MORTGAGORS RIGHTS TO REDEEM (s77(3)): struck down as being a clog on the equity of redemption.
Contractual right to redeem contract However, it is now clear that there is no objection to a
Equity of redemption equity collateral advantage that ceases when the mortgage is
Right to discharge s 77 LTA redeemed. This is a matter of contract between the parties
and provided that the terms are not unconscionable or do not
Ways to discharge the mortgage (by either party): restrict the right to redeem, they will be valid (Biggs v
Redemption (consolidation only by express Hoddinot).
stipulation: s21(2) CLPA)
Foreclosure s76 CLPA Indeed, at least with commercial mortgages made between
Extra-judicial sale s24(1)(a) CLPA equal parties at arms length, Kreglinger suggests that a
Judicial sale court order under s30(2) CLPA collateral advantage that does continue after redemption i.e.
Destruction of property Insurance payout may be continuing obligation to take supplies from mortgagee may be
required by mortgagee to be applied to make good the acceptable so long as the mortgagors property returns to the
loss or as discharge of mortgage mortgagor in the same form that it was mortgaged. This
Effluxion of time no action for principal sum, or shows that courts are aware that the parties business
proceeds of sale after 12 years from the date which the dealings should be upheld as far as possible in the absence of
right to receive money accrued unconscionable conduct.

EQUITY OF REDEMPTION
TERM THAT DESTROYS EQUITY OF REDEMPTION

GENERAL Court has the power to strike down any term that in effect
destroys the equity of redemption. Thus a high interest rate
It is a general principle that a mortgage cannot be made might render the mortgagors equity of redemption valueless
irredeemable: it is a security, not a conveyance, and the right or the terms of the mortgage might be so oppressive as to
to redeem cannot be limited pro tanto to certain people or make it harsh and unconscionable, although it must be more
certain periods of time (Re Wells). than merely unreasonable (Multiservice Bookbinding; Jones v
Morgan) since equity acts on the conscience, not to mend bad
bargains.
POSTPONE DATE OF REDEMPTION
**Is interest rate truly too high? Not too high if it has been
However, a provision postponing the date of redemption may imposed after a commercial assessment of the viability of the
be valid where the mortgage is not otherwise harsh and venture.
unconscionable, so long as the right to redeem is not made
illusory (Knightsbridge; Fairclough). High interest rate represents a clog on equity of redemption
because it is an attempt to deprive mortgagor of property by
forcing him out through inability to pay. Especially relevant in
OPTION TO PURCHASE takeover cases, where owners of new corporation have long
desired the property.
Again, a provision in a mortgage that gives the mortgagee an
option to purchase the property is void (Samuel v Jarrah
Timber). The rationale is that mortgagor, often being in a UNDUE INFLUENCE
vulnerable position, needs protection when negotiating or a
loan. Thus, an option to purchase given to the mortgagee in a A mortgage may be struck down in whole or in part on the
separate and independent transaction can be valid, as not ground that the mortgagors cosnent was obtained by undue
forming part of the mortgage itself (Reeve v Lisle, referred to influence. It is rare for the mortgagee themselves to have
in Citicorp). exerted the undue influence, but the mortgagee can be
tainted with the undue influence of the person who
- Page 38 of 71 -

persuaded the mortgagor to sign (such as co-mortgagor, INQUIRY IS ON WHETHER THE IMPEDIMENTS ARE VALID
husband, lover, etc). This will occur if the person exercising First, establish if it is a clog (degree of impediment
the undue influence can be said to be the agent of the important)
mortgagee (rare) or if the mortgagee has notice of the undue o Postpone date of redemption
influence (Etridge). o Collateral agreement
o Option to purchase mortgaged property
A mortgage tainted by actual undue influence is, without Second, say that in modern times if term not
more, unable to enforce the mortgage, whereas in cases of unconscionable, courts wont intervene
presumed undue influence (in which undue influence arises by o Examples of unconscionable? Making right
presumption because of relationship between parties), the of redemption illusory (postpone date of
mortgagee will not be prevented from enforcing the mortgage redemption forver)
unless the mortgagae was to the manifest disadvantage of o Courts willing to re-characterise collateral
the claimant (Etridge). agreements as separate collateral bargain
that is not in mortgage
o Everything else seems to be acceptable if
CONTRACTUAL RULES there is no unconscionable conduct
Third, o ne restrictive, unreasonable clause alone may
It is also clear that mortgages, being contracts, are subject to be acceptable but if there are more than one, courts
normal contractual rules governing credit relationships and may look at them collectively and find for oppression,
related matters. thus invaliding the terms

Rule #1: No clogs on equity of redemption
Courts lean against the placing of clogs or any
impendiments on the right of redemption (Samuel v Jarrah
Timber; Fairclough).
Such impedimentary terms take the form of being [1]
part of the security or [2] stipulations that gives the
mortgagee additional (collateral) advantage.
Rationale of the doctrine is to preserve the nature of
the security transaction once a mortgage always a
mortgage.
o Hence, there should be no clogs preventing
the mortgagor from exercising his right of
redemption.
Examples include grant of an option to purchase
mortgaged property, postponement of the date of
redemption and collateral advantages.

Analogies/Distinctions:
Samuel v. Jarrah Timber (1904) grant of an option
to purchase mortgaged property [ X ]
o Stocks put up as security for a loan, and
term allows the mortgagee to buy up the
stocks. Mortgagor argued that the term was
invalid because it discharges the equity of
redemption (mortgagor cant get back the
stocks even after repaying the loan).
o HELD: Terms invalid. Contract can never, for
any event or condition, discharge the
equity of redemption or else the transfer of
- Page 39 of 71 -

title will be a sale and not a security Citicorp Investment Bank v. Wee Ah Kee (1997)
interest. grant of option to purchase / collateral adv []
Fairclough v. Swan Brewery (1912) postponement o Mortgage of stocks with agreement to
of date of redemption [ X ] purchase 30% of the stocks ok
o Leasehold property of 7.5 years mortgaged o HELD: In modern times, the law on clogs is
as security for a loan. Term of mortgage was of increasingly less relevance in the light of
that mortgagor can only pay back the loan the innovation of financial methods. When
when the least was near expiry (6 weeks parties are businessmen capable of
before the end). protecting their own interest (especially
o HELD: Term invalid, mortgagor allowed to with the benefit of a solicitors advice), the
redeem earlier. Contractual postponement doctrine of clogs on the equity of
rendered the equity of redemption illusory redemption will arguably have little or no
or valueless and court will not allow the application. Courts in such instance would
unconscionable term to impede the right of be most chary and slow in applying the
redemption. For all practical purposes, doctrine to interfere with the freedom of
mortgage was irredeemable. contact.
Traditionally, collateral advantage bargained for by o HELD: If the collateral advantage is a term in
the mortgagee were rigorously and automatically the mortgage agreement, then it would be
struck out. invalidated because once a mortgage,
always a mortgage. But if term was a
subject of an independent bargain, which
Rule #2: Modern test is unconscionability was incidental and connected to the
However, in modern times, courts are willing to recognise mortgage agreement but forming part of a
commercial realities (such as the fact that parties are larger transaction, then it would be valid.
businessmen capable of protecting their own interest, o Terms valid, but bank lost appeal on
especially with benefit of solicitors advice) and thus adopt a different point
more relaxed approach. Test of whether terms are valid is Knightsbridge Estates Ltd v. Byrne (1939)
not one of unreasonableness but rather one of postponement of date of redemption []
unconscionability (Kreglinger, affirmed locally in Citicorp). o Postponed by 40 years still ok (unreasonable
Classic paradigm of unconscionable bargain: where but not unconscionable)
advantage has been taken of a young, inexperienced o HELD: Term valid. Although the term was
or ignorant person to introduce a term which no held to be unreasonable, the test is not
sensible well-advised person would have accepted unreasonableness. Courts will only
(Multiservice Boobinding) interaction with intervene if [1] the essential requirements of
doctrine of unconscionability the mortgage was not observed, [2] when
Parties should be allowed to structure their loans as there is oppression and unconscionability or
they wish, but they cannot extinguish the right of [3] when term renders right of redemption
equity to redeem. This is because the parties illusory.
intended for it to be a security once a mortgage, Kreglinger (1914) collateral adv [ ] unless
always a mortgage clog/unconscionable/repugnant
Since the basis of clogs doctrine is to ensure fairness o Collateral adv of purchasing sheepskins from
and prevent unconscionability, the fact that mortgagor for 5 years ok
commercial parties have freedom to contract and o HELD: Term valid. There is no rule in equity
proper legal advice would effectively remove the that precludes a mortgagee from
basis for the clogs doctrine in such situations. stipulating any collateral advantage. Court
The courts have reduced the effect of the clogs will only invalidate terms if they are [1]
doctrine by means of (i) severance, (ii) contractual unfair or unconscionable, [2] a clog on the
principles like restraint of trade and unconscionability equity of redemption and [3] inconsistent
and (iii) unconscionability of collateral mortgages. with/repugnant to the contractual or
equitable right to redeem.
Analogies/Distinction: Multiservice Bookbinding Ltd v. Marden (1979)
index-linking clause for loan []
- Page 40 of 71 -

o Index-linking clause for loan to be repaid in substance a single and undivided contract or two distinct
Swiss currency valid even though mortgagor contracts (Kreglinger).
ends up paying more Application: how to ascertain intentions?
o HELD: Term valid. There is no objection to Kreglinger
the principle of index-linking on mortgage o Valid collateral bargain: R was businessman
commitment. Court approved of the test in looking for funds, A was investment bank
Kreglinger v. New Patagonia. Even if the looking for potentially profitable joint
term was unreasonable, court will only ventures
invalidate it if it were [1] oppressive or o Option formed part of condition precedent
unconscionable, [2] imposed in a morally to any advance of loan
reprehensible manner or [3] procured by
unfair means.
o It is not a test of reasonableness! Rule #3: Restraint of Trade + Mortgage situations: test of
Fiscal Consultants v. Asia Commercial Finance (1981) unreasonableness
term to impose full interest of mortgage upon
breach [] The existence of a mortgage does not exclude the doctrine of
o Mortgage agreement was that the right of the restraint of trade (Esso v Harpers Garage). Thus a clause
redemption can only be exercised after 15 in a mortgage deed which is regarded as one in restraint of
months, but should the mortgagor wish to trade must not be unreasonable in its restraint. If it is, then
redeem after 12 months, he should give 3 the tie, as well as the clause postponing the exercise of the
months notice. Mortgagor sought to redeem contractual right to redeem for the same period, will also be
within 12 months breaching mortgage term void.
and mortgagee insisted on being paid the Esso v. Harpers Garage (1966)
full 15 months interest. o Mortgagor entered into 2 clauses: [1] tying
o HELD: Term valid. Court approved of the test clause solus agreement requiring the
in Kreglinger v. New Patagonia. The mortgagor to sell only the mortgagees
imposition of the full interest was neither brand of petrol and [2] redemption clause
harsh nor unconscionable. It merely postponing the date of redemption for 21
represented what would have been if the years.
mortgage ran its full course. Furthermore, o If the purpose and nature of the restraint of
the 2 parties had equal bargaining power trade clauses are found not to be ancillary
and were free to contract. to the lending of money upon security, but
some quite independent purpose, they may
Application: and should be independently scrutinised
Touchstone = unconscionability. Some key facts that o Harman LJ, after detailed examination of the
should put you on notice terms of the mortgage decided that the
Is party a commercial party? mortgage was intended to bolster up the
o VS young, inexperienced, ignorant solus agreement
Were there solicitors or was legal advice given? Solus agreement first in July 5, 1962
Was deal a commercial agreement conducted at Last for 21 years, but can
arms length? still repay at an earlier
date at higher interest rate
Mortgage next in October 6, 1962
Rule #2A: Test of severance and collateral agreements Irredeemable for 21 years
o HELD: Existence of the mortgage does not
Whether option formed a term in the loan (i.e. clog on exclude the doctrine of the restraint of
equity of redemption) or a collateral advantage depends on trade. Solus agreement per se is okay, but
the intention of the parties at the time the loan was granted along with 21 years, it is unreasonable long
(Kreglinger, affirmed in Citicorp). The question is not whether to protect the mortgagees interest. Hence,
the two contracts were made at the same moment and the individual clauses may be valid per se,
evidenced by the same instrument, but whether they were in
- Page 41 of 71 -

but the cumulative effects of both make it A lease for 2 years, with an option for add 2 years does not
invalid. flout the 3 year rule (Bank of China v. Lee Kee Poh)

** Can the tie which is bad be severed?
Whether the invalid clause was the whole or main 3. MORTGAGE
consideration for the agreement moving from the
plaintiff, and, if it was, the whole agreement would The equity of redemption may be mortgaged. In effect this
be void (Alec Lobb Ltd v Total Oil) creates a mortgage-on-a-mortgage.
o Bennett v Bennett: invalid promise
constituted the main consideration, thus Technically no limit to how many mortgages can be created;
whole agreement voided usually depends on the market value of that equity of
o Goodinson v Goodinson: ample redemption.
consideration to support the agreement,
apart from the void covenant, so other
covenants in the agreement could be
enforced ACTION FOR REDEMPTION / LTA

MORTGAGORS OTHER RIGHTS:
Rule #3A: Penalty clause for early redemption will be struck 1. Ending of mortgage
down Right to discharge s 77 LTA
Right to compel transfer of debt and s 19 CLPA
rd
If the default interest rate was way out of proportion with the property to 3 party
greatest loss that could conceiveably be followed from the Restriction on consolidation of mortgages s 21 CLPA
breach, it might be struck down as a penalty (Hong Leong v 2. Procedural rights:
Tan 18% interest from 5.5%). Power to inspect title deeds s 20 CLPA
Right to 3 months notice after contractual s 22 CLPA
On the other hand, it will not be struck down if 1) there was due date
equal bargaining power between parties and 2) it was a 3. Lease or sale
reasonable pre-estimate of cost to the lender. Right to lease s 23 CLPA
Right to judicial sale s 30 CLPA

WHAT CAN M DO WITH HIS EQUITY CLPA applies to mortgages and charges under LTA (s69(1) LTA)

OF REDEMPTION

S19 COMPEL TRANSFER OF DEBT/PROPERTY TO 3P
1. ASSIGNMENT
When M is entitled to redeem, M can compel X to
Assignment = sell equity of redemption to 3P rd
transfer the prop to the name of a 3 P that M
chooses, instead of X re-conveying prop back to M.
M may assign his interest in effect someone else steps into Does NOT apply if X is in possession.
the shoe of M. But M still bound by the covenants of Policy: convenience + avoid stamp duty
mortgage due to Privity of contract; hence M usually will seek
an indemnity from 3P

S20 M HAS POWER TO INSPECT TITLE DEEDS

2. LEASE (S23, CLPA) During mortgage, X will hold on to title deeds.
M may at any time demand to inspect the deeds
If M is in possession, he is allowed to lease the prop, provided provided M pays for any cost incurred.
lease does not exceed 3 yrs.

S21 RESTRICTION ON CONS. OF MORTGAGES
- Page 42 of 71 -

because rent collected would be less than
Consolidation = M grants mortgage of 2 plots of land the amount of interest owed per period M
to the same L M wants to redeem plot X, L wishes would then be subject to open-ended
to compel M to redeem Y as well. liability
Law does not allow M to consolidate, BUT parties ECA found for M and ordered sale.
can contract out of this in their mortgage agreement
(which they often do).

S22 3 MONTHS NOTICE RULE

Mortgages will state the date on which prop is
entitled to be redeemed.
If M does not redeem on that date but does so after
the date, he must serve 3 months notice on the X.
Notice =/= approval; X cannot reject Ms right to
redeem.
Parties can contract out of this.
Policy: give X time to seek new investment.

S30(1) APPLY FOR COURT SALE OF MGED. PROPERTY

ONLY IF UNUSUAL CIRCUMSTANCES JUSTIFY
Once prop falls to be redeemed, M can either
redeem privately or sue in a redemption action
o Under the statute, M can petition for sale
the moment he/she is entitled to redeem
(ie. date of redemption is over), even if M
has no means to redeem (because M cannot
raise the debt sum).
Advantage of court action is that M can petition court
to order sale in lieu of redemption.
Proceeds will go toward paying off X and rest will go
to M.

Palk v Mortgage Services Funding PLC [ECA]
M was entitled to redeem but could not because he
did not have the $ - X did not want to sell because
property market was depressed M sought judicial
sale even though proceeds would be insufficient to
pay off X
ECA held that court has unfettered discretion to
order sale but it will be exercised judiciously wrt the
circumstances
**UNUSUAL CIRCUMSTANCES
o No evidence that property market would
improve and even if it improved, still not
enough to repay the loan
o Ls suggestion to wait and rent out the
property in the interim was not feasible
- Page 43 of 71 -

o S. 76(1)(b), LTA: Mortgagee can apply for
MTGEE (X)S RIGHTS foreclosure as though he held the legal
estate.
As provided in s 69(1) LTA, the rights set out in Part IV of the o S. 76(1), LTA: The right to foreclosure applies
CLPA also apply to mortgages registered under the LTA unless it is repugnant to the context.
o S. 76(4), LTA: Has the same effect as the
Note: all remedies are cumulative (except foreclosure). common law foreclosure.
Therefore, if there is any shortfall, the mortgagee can sue on a Even after mortgagee has foreclosed the property,
personal covenant to recover. the foreclosure can be reopened to allow mortgagor
to redeem.
Rights independent of default Note: s. 30(2), CLPA protects the mortgagor by
allowing for a judicial sale of the property in lieu of
1. Rights to demand payment
foreclosure.
Right to 3 months notice of s 22(1) CLPA

payment after contract date
This is the most severe remedy and is not favoured by equity,
2. Rights to lease, insure and receivership
hence mortgagees generally avoid it becaurt courts will not
Power to lease by mortgagee in s 23(2) CLPA
easily allow M to be foreclosed:
possession
(i) Foreclose must be by action in court
Power to insure against ss 24(1)(b) & 28 CLPA*
(ii) Ct will give M 6 mths to pay up bef making
mortgaged property against fire
foreclosure absolute
Power to appoint receiver ss 24(1)(c) & 29 CLPA*
(iii) If M cannot pay, he can ask for extension and Ct is
3. Rights to sell or repossess; tacking
quite easily persuaded to grant this extension
Right to judicial sale (court order s 30 CLPA*

notwithstanding objections)

Right to consolidate (if expressly s 69(1) LTA
stipulated) RIGHTS INDEPENDENT OF MS DEF
Right to proceeds of sale s 74 LTA
Right to enter into possession s 75(1) & (2) LTA; 1. RIGHT TO POSSESSION
(after 1 months notice) Rimmon Watch,
Matterhorn Source of the right:
Right to tack further advances s 80 LTA Legal mortgage bec. L has title to property
Remedies on default Registered mortgage s. 75 LTA
Right to power of sale (once legal ss 24(1)(a) & 25 CLPA; Equitable mortgage no inherent right but can apply
date passes; or instalment due) Payne v Cardiff* to court
Right to foreclose (court order) s 76 LTA
Right to sue on personal covenant Based on contractual X generally avoids possession
1
principles Xs right to possession is independent of Ms default
and can be exercised any time.
In general, Xs avoid possession because. equity
imposes very onerous duties upon an L in
RIGHT TO FORECLOSE possession.
At common law, the right of foreclosure is inherent. He has a duty to:
Every X has it because he has title to the estate, o If he does not exercise sale, he has to rent
regardless of whether it is legal or equitable. It is the out property in the interim
most drastic remedy, not usually resorted to. o In renting out, he has to obtain rent tt a
The effect is that the mortgagors equity of person acting reasonably diligent wouldve
redemption is eroded and the property is free to the gotten.
mortgagee.
Under the LTA, the right to foreclosure is (not
inherent) granted by:

1
But note that for right to possession under s.75 LTA, the right is only
exercisable when M defaults on payment.
- Page 44 of 71 -

As a matter of practice, X does not enter into Quare: whether parties can totally exclude this
possession except as a prelude to exercising the right, when words used is vary or extend
power of sale on default.

Procedure to exercise possession 3. RIGHT TO TRANSFER AND DEAL
If right is exercised pursuant to s. 75 LTA, M must be
given one-month notice X can transfer his interest to A and A will be the new
If M has rented property out, X will serve notice to mortgagee.
tenant (T), directing T to pay rental to X instead of Unless otherwise stated, X can do so without Ms
M. consent.
X is obliged to use rental to discharge interest due A will take land subject to equity of redemption and
and surplus must be returned to M. any other equities to which he has notice.

Equitable mortgagee
No inherent right of possession but may apply to court to
enter into possession.

In such cases, if X is exercising his right to possession in
accordance with the terms of the mortgage, courts have no
right to refuse unless there is a reasonable prospect of M
paying off in full (as held by SGCA: Hong Leong Finance v. Tan
Gin Huay)
SGCA did something quite strange in this case: they
entered judgment in favour of X, but stayed the
possession order provided M continued to pay the
monthly instalments.
This discretion was simply a courts discretion to
allow stay of execution probably because Dfs were
old ladies in this case.

2. RIGHT TO INSURE PROPERTY

Applicability s.24(1)(b) CLPA
(a) Mortgages by deed
i. Legal
2
ii. Equitable
(b) Registered mortgages

Extent of right
X has right to procure insurance against loss by fire
only
Premiums shall be a charge on mortgaged property
and will add to the mortgage debt
Maximum amount insured (if not stated in mortgage)
will not exceed 2/3 of amount need to restore
property in case of total destruction
Parties, however, have freedom to vary or extend
this right in the mortgage agreement

2
Refers to a formal equitable mortgage ie. M initially only had an equitable
interest.
- Page 45 of 71 -

must be sold with vacant possession. In practice, therefore,
RIGHTS UPON MS DEFAULT
before sale, a mortgagee may wish to exercise its right of
1) Express covenant to repay sum owed possession. Indeed, taking possession of the mortgaged
property can also be used as a method of security for recovery
The first and most straightforward of the mortgagees of any outstanding interest on the loan, as where a mortgagee
remedies against a defaulting mortgagor arises because the in possession sub-lets or runs the business over which the
mortgage is a contract of loan between the parties. The mortgage exists.
mortgagee has an action on the express covenant given by the
mortgagor for repayment of the sum due on a certain date However, there is a positive disincentive for a mortgagee to
plus interest. As soon as this date has passed, the mortgagee take possession, as a mortgagee in possession will be called
may sue for the sum owed and is normally entitled to a strictly to account for any income generated by its possession
payment order for the full amount. This may be of little (White v City of London Brewery). Mortgagee will be taken to
practical use if the mortgagor has no funds other than those have received both actual income and potential income
tied up in the secured property, but it is often an adjunct to hence, it may find itself owing money to mortgagor. This is
possession proceedings against them. It may however lead to why most commercial mortgagees desist from seeking
the mortgagor becoming bankrupt and this, in turn, can elad possession.
to a sale of the property at the equest of the trustee in
bankruptcy (Alliance & Leicester v Slayford). This is a useful Stay of execution
weapon of last resort if the mortgagee is unable to secure a In residential context possession is still an option for the
sale in their own right (because of a Boland-type ??? mortgagee, often as a prelude to sale. However, the
overriding interest). mortgagor is protected from a overzealous mortgagor by the
court, which has the discretion to allow for a stay of
execution (as it did in Hong Leong Finance v Tan Gin Huay
2) Power of sale two old ladies).

Most mortgages will contain an express power of sale,
although by virtue of s24 of CLPA, this right is implied to all 4) Power to appoint receiver get interest/manage assets
mortgages created by deed as well as registered mortgages.
This power arises as soon as the legal (contractual) date for This may be used to recover interests owed rather than end
redemption has passed or, in the case of instalment the mortgage. Mortgagees right to appoint a receiver is often
mortgages, when one instalment is in arrears (Twentieth expressly included in a mortgage but such a power is also
Century Banking v Wilkinson). implied into mortgages created by deed and mortgages that
are registered by virtue of s24, CLPA.
However, under s25 of CLPA, this power only becomes
exercisable when either Greater advantage of the appointment of a receiver as
(a) notice requiring payment of the mortgage opposed to mortgagee taking possession is that the receiver is
money has been served and the mortgagor is 3 deemed to be the agent of the mortgagor (Chatsworth
months in arrears since notice, Properties), hence mortgagee would not be found to be
(b) interest under the mortgage is 1 month in negligent.
arrears and unpaid, or
(c) the mortgagor has breached some covenant in
the mortgage. 5) Foreclosure

Since a sale of mortgaged property is calamitous for the The remedy of foreclosure, if successful, will extinguish the
mortgagor, the mortgagee is subject to various rules regarding equity of redemption and cause the trasnfer of the property
the pre-sale, sale, and proceeds of the mortgaged property. to the mortgagee, entirely free of any rights of the mortgagor.

In lieu of the powerful nature of foreclosure, court has power
3) Right of possession under s30(2), CLPA to order sale in lieu of foreclosure (and in
exceptional circumstances like Palk v Mortgage Services
Usually, mortgagee will wish to sell the property in order to Funding).
realise its security, and to do this effectively, the property
- Page 46 of 71 -

1. RIGHT TO APPOINT RECEIVER 2. EXERCISE EXTRA-JUDICIAL POWER OF SALE

Applicability ss.24(1)(c), 29 CLPA Applicability ss.24(1)(a), 29 CLPA
Same as in right to insure property Same as in right to insure property

How it is used This is a statutory power of sale available to all
X can appoint a receiver (R) to manage the mortgagees and charges where the mortgage is by
mortgaged assets in the best possible way to secure deed.
repayment. S. 24, CLPA: Right to sale arises when the mortgage
Advantage of this over exercising power of sale is money is due, subject to s. 25, CLPA:
that receiver is agent of M and hence X would not be o For non-payment of mortgage money, right
found to be negligent. to sell arises when after a notice is served
After selling property, R will pay for his own but the mortgagor defaulted in making the
commission, then the Xs debt and if there is any payment for 3 months.
surplus, to M. For non-payment of interest, the interests is in
arrears and unpaid for 1 month (NO NOTICE
Appointment of Receiver REQUIRED)
X can appoint whoever he wishes as receiver and the If there is a breach of some other provisions of the
decision cannot be challenged unless it was done in mortgage other than the payment of interest or
bad faith. mortgage money.
Downsview Nominees v. First City Corp LTD S. 24(2), CLPA: Exercise of the right to sale can be
o HELD that duty of a Receiver to obtain fair varied or extended by express provisions.
value was based on equity and NOT tort. o Probably cannot exclude
o If it were otherwise, then a R will be caught Failure of the mortgagee to comply with the
between a rock and hard place he may be procedures as laid out in s. 24, 25, CLPA will result in
negligent if he sold property too early or too damages for the mortgagor under s. 26(2), CLPA.
late There will always be expert witnesses
ready to testify with the benefit of hindsight
R also dependent on Co. for info thus, S1 (PRE-SALE):
duty is merely that of good faith. MS DUTY WHEN EXERCISING POWER OF SALE

The exercise of the mortgagees right to sell is within his own
discretion and he is not answerable to the mortgagor as to
when he wants to exercise his right.
China & South Sea Bank Ltd v. Tan Soon Gin (1990)
o When power of sale arose, shares fetched a
decent price but mortgagee did not sell. By
the time mortgagee decided to sell, shares
were nearly valueless.
o HELD: Bank not liable for surety. Mortgagee
owed no duty to surety when exercising his
power of sale. He can decide in his own
interest when and whether to sell even if
the prices fell (unless he was responsible for
the decline, then cannot).
Teo Siew Har v. OCBC (1999)
o Mortgagor unable to sell property and
approached the bank to exercise its power
of sale. Bank did not reply and demanded
payments for the sum owed.
- Page 47 of 71 -

o HELD: Bank can claim. Mortgagee can Generally, M and Ls interest shd be aligned both
decide when and whether to exercise the want the highest possible value on prop. But in some
power of sale even if price dropped and cases, X may actually be the party buying the prop
there were sums owing (as long as the and hence there is an interest to dispose the
decline not his fault). property cheaply.
Hong Leong Finance Ltd v. Tan Gin Huay (1999) Tse Kwong Lam v Wong Chit Sen [83, PC] X sold
o Mortgagee sought to possess property after property by public auction sole bidder was wife of
the mortgagor defaulted and also claimed X, bidding on behalf of Co. owned by X conflict of
interests for late payment. Mortgagor interest PC HELD that it was permissible but burden
sought to prevent mortgagee from was on X to show it was done in good faith
possessing. o Xs advertisement had insufficient
o HELD: Allowed possession but court information + wife knew the reserve price
ordered the adjournment of the possession of bid good faith not found.
to give the mortgagor a chance to pay it off Kian Choon Investments (Pte) Ltd v Societe Generale
if there is a reasonable prospect of this [90, SGHC] X sought private buyer for sale X had
occurring, hence, effectively giving the agreement with prospective buyer that X will be
nd
mortgagors a 2 chance to pay up allowed to repurchase several floors at a fixed price
instalments due and owing. HELD that X had not proven good faith although
price was above market valuation, there was clear
It is only in exceptional cases such as in Palk v. Mortgage conflict and the haste in which X went into the
Services Funding, where mortgagor was suffering from a transaction (without waiting to see if there could be
financial haemorrhage that he could apply to the Court a higher price fetched) does not discharge the burden
under s. 30(2), CLPA for an order of a judicial sale (Tan Sook of proving good faith X lost (note this was not a
Yee). proper trial but application for interlocutory
Palk has a resonance in Hong Leong Finance v. Tan injunction to stay the transaction).
Gin Huay where the Court of Appeal stayed the Beckkett Pte Ltd v Deutsche Bank AG
execution of its order for possession, a gentle o Example 1 conflict: An example would be
reminder of the courts equitable jurisdiction to give a sale involving a conflict of interest on the
relief. part of the mortgagee, ie, where the
mortgagee has sold the property to his
nominee or to any family relation or any
S2 (SALE): company in which he has an interest or
DUTY OF M IN SALE OF PROPERTY where the sale is effected for the purpose of
preventing the mortgagor from redeeming
Mortgagee has a duty to 1) act in good faith and 2) to take the security.
rd
reasonable steps to obtain true market value (Cuckmere o Example 2 3 party: Where the purchaser
Brick; accepted by CA in Hon Seen Ghee v DBS) is an independent third party, the
mortgagor must prove that the purchaser is
If mortgagee breached the duty of good faith, mtgor can set not a bona fide purchaser or that the
aside transaction. If mtgee breached duty to obtain true purchaser has notice of bad faith or
market value, mtgor can only sue for damages (Beckkett Pte impropriety on the part of the mortgagee. In
Ltd v Deutsche Bank AG). such a case, the court may set aside the sale
Note that s 26(2), CLPA seems to suggest that mtgor in order to allow the mortgagor to redeem
can only sue for damages no matter what. the security.
o Example 3 undervalue: A completed sale
1. Duty to act in good faith by a mortgagee is not liable to be set aside
merely because it has taken place at an
Subjective criterion of good faith: The lack of good faith undervalue, as undervalue is NOT, by itself,
requires some dishonesty or improper motive, some element evidence of bad faith or impropriety
of bad faith to be established.

- Page 48 of 71 -

2. Duty to obtain true market value Some case law argues that there is no need to get
valuation (Good Property v. Societe Generale).
Objective duty to take reasonable steps to obtain the best But practically, if the mortgagee gets a reputable
price reasonably obtainable. The duty is not to get the best valuation report, it will be hard for the mortgagor to
price or true market value, but best price available at the argue (Ng Mui Mui v. Indian Overseas Bank, Beckkett
date of the sale. Pte Ltd v. Deutsche Bank).
Cuckmere Brick [ X ] But usually if the market is bad, mortgagee wont
o Failed to adequately advertise planning want to get a valuation report.
permission information which has Ng Eng Ghee v. Mamata Kapildev Dave (2009)
significant impact on price of property o HELD: For en bloc sale, valuation report is
Lee Nyet Khiong [ X ] mandatory.
o Sole advertisement did not disclose
information apart from location + Rationale for the duty is because the mortgagor is vitally
o Advert made only 2 weeks before closing of affected by the result of the sale but has no role in the
tender process, and also because the mortgagee is not an absolute
Kian Choon Investments v Societe Generale [ X ] owner selling his own property.
o Mtgee sold property but did not wait to
check results of the sale of a nearby This duty, as developed in Cuckmere v. Mutual Finance
building even though he knew sale was highlights Wee Meng Sengs academic article that the court is
occurring and would reflect true market adopting a more recent alternative approach in imposing a
value duty on the mortgagee.
st
o Doesnt this conflict with 1 duty (pre-sale) Classical approach:
that mtgee can sell anytime you want? Neither mortgagee nor receiver owes any general
Only for en-blocs do you have to wait for duty of care to the mortgagor. The only duty of care
sale of nearby buildings. Tang argues that it owed is on a sale, in addition to the mortgagees duty
could be because valuation of this to exercise due diligence when it is in possession
particular building was difficult hence has this lack of accountability has caused widespread
duty to wait discontent.
How Seen Ghee v The Development Bank of SG [ X ] Recent alternative approach:
o Bank breached duties as mtgee in exercise Acknowledging the mortgagees superior rights and
of its power of sale when it refused to simultaneously protect the mortgagors interests.
sanction a sale at reduced price of $725,000 [1] Provided that the mortgagee/receiver acts in
unless an agreement was reached regarding good faith, the mortgagee is entitled and the receiver
payment of shortfall Hows interests is bound to subordinate any conflicting interests of
sacrificed without discernable gain to bank the mortgagor to what the mortgagee/receiver
Beckkett Pte Ltd v Deutsche Bank AG [ X ] genuinely perceives to be the mortgagees interests
o Sold pledged security w/o any in securing payment.
advertisement or publicity [2] Where there is no conflict between the interests
o Because the shares to be sold were unusual of the mortgagee and the mortgagor (both wants to
assets that could not be easily priced except settle the mortgage at the best price etc), the
by experts familiar with them, a valuation mortgagee/receiver is not entitled to override or
by such experts were essential to ascertain ignore the interests of the mortgagor and come
proper price under a duty to exercise reasonable care.
o Although one valuation was obtained by The resurgence of the classical approach and its bias
DSM, it was not obtained for the purpose towards the mortgagee has re-emphasised that the
of negotiating price with Bank but rather for law has gone far beyond what is necessary to protect
justifying the sale price of US$46m in an the mortgagees legitimate interests as a secured
application to obtain approval from creditor that harm is caused to the interests of the
Indonesian courts, thus was of no probative mortgagors gratuitously.
value

Valuation report will be prudent.
- Page 49 of 71 -

S3 POST-SALE MORTGAGEES OTHER RIGHTS
DUTIES OF M REGARDING PROCEEDS OF SALE

ACTION ON THE DEBT
Although mortgagee is not a trustee when exercising the

power of sale, he is a trustee for the mortgagor in regard to
X has cumulative remedies hence even after X has
the proceeds of the sale principle is reproduced at both
foreclosed or sold the property, he can sue for an
common law and in the LTA.
action on the debt

But if he does so after foreclosure, the action on debt
After paying the expenses of the sale and then himself for
would reopen the foreclosure and court may stay the
sums due and owing to him, he is obliged to see that the
foreclosure if M is able to repay the debt.
surplus is given to the encumbrancer ranking next after him.
If X is unable to restore the property to M, his action
S. 26(3), CLPA: Money received by mortgagee shall
on the debt will fail.
be held on trust to be applied

S. 74, LTA: After discharge, money shall be held on
trust to be applied
o Mortgagee is liable to account for the APPLY FOR JUDICIAL SALE
categories of people in s. 74, LTA and s.
26(3), CLPA (caveated interest sufficient to Available when: there is an action in Ct (X suing for
come under person who appears to be foreclosure or M suing for redemption)
entitled). Petition court to order sale. Request may be made by
o Order of distribution: mortgagee, mortgagor or anyone interested in
Costs and expenses for sale mortgage $.
Discharge of mortgage Court will not lightly order a sale against Xs wishes
Other mortgages in order of priority if a substantial part of the $ is outstanding.
Person entitled to mortgage Only exception was the Palk case.
property
Pf in Chip Thye had to
become owner in equity
under contract of sale
which was 1) specifically
enforceable and 2)
unconditional

Chip Thye v. Development Bank of Singapore (1994)
o Chip entered to purchase agreement with
mortgagor but a dispute arose. The
mortgagee, Bank then exercised its powers
of sale but Chip had asked the mortgagee
not to pay the money out to the mortgagor
to await the outcome of the litigation.
Mortgagee did not heed the warning and
paid it out to the mortgagor.
o HELD: Bank breached its duty. Chips
purchasing interest allowed him to lodge a
caveat and hence mortgagee had to
account for this interest and pay the money
to him instead of to the mortgagor. In
paying the sum, bank breached s. 74, LTA.

- Page 50 of 71 -

EQUITABLE HELD: No prior right. Writ of seizure and sale was

not an interest in land and only amounted to a
MORTGAGE/CHARGEE personal claim. Hence, person with write merely
steps into the shoes of the mortgagor and would be
subject to the mortgagees power of sale.
Remedies available to the parties of an equitable mortgage:

Remedies expressly provided for in the mortgage
agreement, e.g. an express power of sale.
TACKING
Where land is LTA land, then remedies under general law and
Allowed because it is usually expressed in the terms of the
the CLPA is still available unless it is inconsistent with the LTA,
mortgage contract.
as per s. 3(1), LTA.
The subsequent mortgagee would have known of
Societe Generale v. Good Property Land
the right of the first to tack.
Development Pte Ltd (No. 2) (1989)

o Mortgage not fully registered when the
S. 80(1), LTA: Tacking is the process by which priority is
mortgagee exercised his power of sale.
conferred on further advances granted by a prior mortgagee.
Mortgagor argued that the power of sale
This allows for further credit to rank in priority to
cannot be exercised because [1] land was
subsequent mortgages by a different mortgagee.
unregistered and hence LTA remedies not

applicable, and [2] mortgage was not
Circumstances for tacking:
registered and hence no power of sale under
S. 80(1)(a), LTA: Automatic tacking and doesnt
s. 69(1), LTA.
require the consent of the subsequent mortgagees.
o HELD: The LTA does not oust the
o [1] If the making of further advances
application of general law and the CLPA
expressly authorised by prior mortgage.
unless it is inconsistent with the LTA (s.
o [2] Where the prior mortgage authorises the
3(1), LTA). As long as the mortgage was done
giving of credit in instalments or on a
by deed, then the power of sale under s. 24,
current, revolving or continuing account
CLPA exists.
(needs an active account).
Note: s. 69(3), LTA: For LTA, deed
S. 80(1)(b), LTA: [3] If the subsequent mortgagee
means anything registered under
agrees.
the LTA.
S. 80(2), LTA: The above 3 situations are exhaustive.

Tacking cannot take place otherwise.
PRIORITY OF MORTGAGES

For registered land, general rule is that priority is according to
date of registration.

But note two special circumstances:

MORTGAGEES V. REGISTERED WRIT

OF SEIZURE AND SALE
Rule is that latter is not good enough to go against the
mortgagee.

United Overseas Bank Ltd v. Chia Kin Tuck (2006)
Mortgagee, UOB sought to exercise the powers of
sale but Chia argued that he had obtained a write of
seizure and sale against the mortgagors property
and thus had a prior right to sell the property.
- Page 51 of 71 -

Land Titles Act

o UOB v Bebe

This power may be exercised either at the instance of the
START: INDEFEASIBILITY aggrieved party or upon the Registrar''s own motion.

Remedies are essentially compensation from the assurance
fund: s159(4), (9), to be read with s158 which states that
** Always write this first action must be brought within 12 years from time that the
s. 46(1) confers on a registered proprietor indefeasible title as cause of action arose.
his title is free of all encumbrance, and this is amplified by s.
47 (which does away with notice) and s. 157 (which allows S159(a) is arguably limited since it only refers to (2) (see
indefeasibility even if predecessor had bad faith). While some above). S159(b) and (c) refer to erroneous entries and
has argued that the indefeasibility here is deferred erroneous omissions respectively.
indefeasibility (Gibbs v. Messer), i.e. the indefeasibility is Extent of Registrar's power rests on the meaning of
deferred one transaction away from the forger, it is erroneous entry or omission.
abundantly clear that Singapore adopts immediate One issue is whether the error should be limited to
indefeasibility (Frazer v. Walker, affirmed locally in UOB v. that of the Registrar i.e. departmental errors** or if it
Bebe). This is also consistent with s. 46(1) where should include mistakes arising in the course of the
indefeasibility is conferred whether or not he dealt with the transaction leading to the registration.
proprietor, i.e. even if the predecessor was a rogue or forger, Since s 46(1)(iv) makes this an overriding interest
the registered proprietor still has indefeasible title. Therefore, should be read narrowly else wide interpretation
a registered proprietor is entitled to rely on the presumption would result in Registrar having extraordinary powers
of indefeasibility and the burden of proof is on the person which strike at the root of indefeasibility of title
who avers otherwise (Loo Chay Sit v. Estate of Loo Chay Loo).

The indefeasibility of title is subject to overriding interests
prescribed in ss. 46(1)(i)-46(1)(vii), statutory exceptions S160 COURT'S POWER TO RECTIFY
prescribed in ss. 46(2)(a)-46(2)(e), corrections of errors by ** This is procedural; first it has to satisfy s46(2)
registrar in s.159, courts power to rectify register in s160(1)
and arguably personal equity. s. 160 allows the courts to rectify the register where there is
fraud, omission or mistake. Our Court of Appeal in UOB v.
Bebe took a restrictive interpretation of s. 160 and held that it
OVERRIDING INTERESTS 46(1) must be read in light of the statutory exceptions in s. 46(2)
For the element of fraud, this must be tied back to s.
Section 46(1)(i) to (vii) AUTOMATIC 46(2)(a), where the fraud to which the registered
(i) State grant or lease proprietor or his agent is a party to.
(ii) Easement or public right of way For the elements of omission or mistake, they must
(iii) State obligations be tied to back to ss. 46(2)(b)-46(2)(e), where the
(iv) error under s159 mistake or omission of the registered proprietor
(v) power to rectify under s160 prejudices the rights of other parties to the property.
(vi) short lease (only 7 years + *tenants in In other word, the fraud, omission or mistake must
occupation) be on the part of the registered proprietor who
(vii) Contravention of Residential Property Act presents the instrument to the registry, per s.
160(1)(b), and not on the part of the registrar.
This restrictive interpretation is to 1) avoid
S159 REGISTRAR'S POWER TO incongruence of Parliament conferring indefeasibility
RECTIFY upon the registered proprietor in s. 46(1), while 2)
(1) Correct errors and omissions empowering the court to take it away on the basis of
(2) Including misspelt names, inclusion of and entry someone elses dishonesty, omission or mistake.
into another folio of register, wrong description of Therefore, s. 160 is purely procedural by setting out
parcels and boundaries (without prejudice to the rectification process but the case must first fall
generality of powers under s159(1)) within the exceptions in s. 46(2).
o UOF v Victor Sakayamary
- Page 52 of 71 -

** Say therefore, to invoke s. 160 must still use s. 46(2), so lets
talk about s. 46(2). For example, if the registered proprietor has (1) given an
undertaking to honour the agreement to confer an interest in
the land to a third party, which induced the vendor to sell the
EXCEPTIONS 46(2) land to him, and (2) he paid a lower price for the land to
discount the interest of the third party, this will definitely
** Always remember to mention that ALL OF THEM lead to constitute fraudulent misrepresentation amounting to Torrens
the SAME RESULT: defeating indefeasible title Fraud (SGCAs comment in Bebe on Betsey, which it described
as indistinguishable from Loke Yew). Even if the undertaking
by the registered proprietor was an honest one, his
46(2)(a) FRAUD OR FORGERY subsequent repudiation is still fraudulent because it has at its
Under the statutory exceptions in s. 46(2)(a), a registered object the destruction of the third partys underlying interest
proprietor has no indefeasibility of title if he or his agent was notwithstanding that the preservation of the third partys
a party to fraud or forgery. interest was the very foundation or assumption underlying the
execution of the transfer (Minority position in Bahr v. Nicolay,
1. WHAT IS FRAUD? NOTICE? adopted by SGCA in Bebe in its comment on Besty). Thus,
while such subsequent repudiation might be considered as
What is equitable fraud? equitable fraud, it can be accepted as Torrens fraud as it
Term used to denote transactions having consequences in possesses dishonesty thereby satisfying the definition of
equity similar to those which flow from fraud: Assets Co fraud in (UOB v. Bebe).

No definition of fraud exists under LTA or any other Torrens ** Was there such an undertaking and paying lower value?
legislation. Mere notice of a prior unregistered interest in the Fradulent misrepresentation?
land is not fraud as per s47(2) (Waimaha Sawmilling and Ong
Tin), and such notice is insufficient to defeat title (s. 47(1)(c)).
3. WILFUL BLINDNESS
It is said that Torrens fraud here means actual fraud, i.e.
dishonesty of some sort, not constructive or equitable fraud Wilful blindness by the registered proprietor could also
by persons (Assets Co v. Mere Roihi, affirmed in Waimiha amount to Torrens fraud, but this requires a very high
Sawmilling), and our Court of Appeal in UOB v Bebe stated threshold of proof.
that the "hallmark of fraud is dishonesty or moral turpitude".
In Assets Co v. Mere Roihi, it was held that a mere failure to
** If there is straightforward FORGERY (go to part IV) or be more vigilant and to make further inquiries would not of
FRAUD (actual notice or dishonesty), then skip the remaining itself prove fraud on the part of the registered proprietor,
sections and go straight to discuss other other exceptions unless his suspicions that a fraud was perpetrated had been
under s46(2). aroused and he abstained from doing so for fear of finding out
the truth.

2. SUBSEQUENT REPUDIATION Also in Waimiha Sawmilling, it was held that the test of fraud
is not whether the purchaser actually knew for certain of the
*If facts don't include, go on to Wilful Blindness existence of the adverse right, but whether he knew enough
to make it his duty as an honest man to either make further
Actual fraud is where at the time of contracting the registered inquiries before purchasing. If, knowing as much as this, he
proprietor did not have the intention of honouring the proceeds without further inquiry or delay to purchase an
undertaking (as in Loke Yew, affirmed locally in Betsey). unencumbered title with intent to disregard the claimants
However, our courts have not authoritatively ruled out all rights, he is guilty of that wilful blindness amounting to fraud.
forms of equitable frauds, and rather took a safer definition of
fraud, which is the presence of dishonesty or moral turpitude Both these holdings in Assets Co and Waimiha were positively
(UOB v. Bebe). Hence, it appears that fraud could include a cited in UOB v. Bebe. However, there must still be an element
species of equitable fraud if there was dishonesty (Bahr v of dishonesty as the court in UOB v. Bebe held that the mere
Nicolay). failure to make further inquiries could not amount to wilful
- Page 53 of 71 -

blindness akin to fraud as there was no dishonesty, moral 4. WHOSE FRAUD?
turpitude, want of probity, or intent on the part of registered
proprietor to disregard the third partys rights. Fraud must be brought home to the registered proprietor or
his agent (s46(2), LTA). Further, title of the registered
** Did he know enough to arouse suspicions of fraud? Such proprietor cannot be defeated by fraud of his predecessor;
that there is dishonesty? he himself must also be "tainted" by the fraud (s157, LTA).

** Note: In mortgage cases, usually only 1 set of lawyers
3A. UNDUE INFLUENCE WILFUL BLINDNESS acting for both parties will be used to save costs. If lawyer is
the one perpetuating the fraud, it will be attributed to the
** If factual matrix brings up undue influence type of cases bank.
(e.g. 3-parties bank situation), can use the following to discuss UOF v Yew Siew Kien solicitor's forgery
o Solicitor kept Ds Certificate of Title, forged
THE LAW Ds signature and used it to mortgage the
At present, the only case law relevant to the factual land to UOF. Solicitor then misappropriated
matrix is the case of Sivakolunthu. There, however, the proceeds. UOF then sought to enforce
the courts appear to consider undue influence as the mortgage.
part of the inquiry towards establishing wilful o HELD: Yes fraud, D not bound. Solicitor acted
blindness amounting to fraud under s46(2)(a) and for UOF and was his agent. Hence, the fraud
held that P's solicitor's failure to take any action to was brought home and the commission of
eliminate risk of undue influence did not amount to the fraud defeats the UOFs title.
wilful blindness or fraud UOF v Victor Sakayamary solicitor's forgery
This would appear to affirm the obiter in Bebe where o Ds were beneficiaries of an estate and were
the court consider that in personam exceptions do tricked into signing a mortgage agreement
not exist in Singapore and rationalised past cases by the solicitors clerk. UOF tried to enforce
which have held so as falling under the 46(2) the mortgage.
exceptions o HELD: Yes fraud, D not bound. UOF had
committed fraud because the solicitors were
THE APPLICATION his agent and the fraud tainted UOF as well.
Following Siva's rule that the failure to take any This aspect of the judgment is
action to eliminate the risk of undue influence did uncontroversial.
not amount to wilful blindness or fraud for the
purposes of s 46(2)(a) LTA, applying it to this case,
the bank's failure to eliminate the risk of undue EVALUATION
influence by, for example, asking Orked to seek
independent advice, would not be wilful blindness Criticisms on Bebe limit fraud, expand trust:
amounting to fraud. Thus, bank would retain Crown, Back to Basics: Indefeasibility of Title under the
indefeasibility of title. Torrens System: It is submitted that immediate indefeasibility
o If there was moral turpitude or dishonesty, is the general rule and since fraud lies with the exception, it
then fraud. does not have to be constricted to the general principle of
If there is fraud, the bank maanager is considered the immediate indefeasibility such that it only applies at or before
agent of the bank as the registered proprietor and registration.
thus the fraud is brought home to the bank.
It is submitted that Bebes position on fraud having to exist
Barry Crown's analysis: vitiating factors = equitable fraud before and at the time the contract is entered into or at the
It is possible to interpret these vitiating factors, which involves time of registration of the instrument is correct. However, it is
some form of dishonesty or moral turpitude to induce/compel wrong to say that Betsy is on all fours with Loke Yew and can
parties into contracting in order to gain some benefit from the be re-interpreted as fraud. Loke Yew should come under fraud
contractual arrangement. This would reduce the backdoor to exception since PSR had no intent to recognise Loke Yews
in personam claims. interest from the start (unlike in Betsy). Betsy can be properly
explained if the court adopts and expands the obiter dicta in
- Page 54 of 71 -

Loo Chay Sit to allow for constructive trusts under s46(2)(c) Seems at odd with s. 46(2)(b), LTA because the provision says
exception. This would effectively restrict the fraud exception to enforce.
to actual fraud at time of registration, while expanding the
trust exception to allow constructive trust, which Betsy will But, dicta in UOB v. Bebe characterised Oh Hiam as falling
come under. within s46(2)(b) by rationalising that parties were seeking "to
enforce" their contractual right of vitiation even though what
they actually did intend was to void the contract for common
mistake
46(2)(b) CONTRACTUAL RIGHTS Seems to be distorting legal mechanisms to justify a
S. 46(2)(b), LTA allows a claim of contractual right against the result based on fairness
registered proprietor. Tang: why not just acknowledge the role of in
personam actions in LTA?
UOB v. Bebe (2006)
HELD: Dicta by the CJ Chan stated that s. 46(2)(b)
would capture most, if not all of the in
personam/personal equity actions through the
46(2)(c) TRUST OBLIGATIONS
breach of a contractual term by the registered S. 46(2)(c), LTA allows the beneficiary of a trust to enforce
proprietor. rights against the trustee registered proprietor.
Court rationalised that Oh Hiam woud fall under s.
46(2)(b) because it would be one party enforcing his In Loo Chay Sit (2009), the Court of Appeal suggested in obiter
contractual rights against the registered proprietor dicta that resulting trust can be recognised under s46(2)(c)
to correct a common mistake. LTA, in contrary to Bebes obiter dicta that the trust exception
Court also rationalised Mercantile v. Gosper and is limited to expressed trust.
reasoned that the mortgagee had breached an
implied term of the security agreement that it would It is submitted that Loo Chay Sit's suggestion of allowing for
not misuse the Certificate of Title in its custody. resulting trust to fall under the s46(2)(c) exception is the
Court further rationalised that there could also be an better position to take, and that it should be expanded to
indirect claim by a party not privy to the contract, allow for constructive trusts as well.
such as in Betsy, Bahr v. Nicolay and Loke Yew
through qualification under the CR3PA (see below) By allowing constructive trust under s46(2)(c) serves to reduce
personal equities. It does not defeat the policy objectives of
the LTA to reduce uncertainty and to give finality in land
VIATING FACTORS dealings (Bebe), because it is possible to adopt a principled
approach towards the imposition of constructive trust. A
Vitiating factors i.e. duress, undue influence can be brought in distinction can be drawn between notice of a wrongdoing
under s 46(2)(b) as per Bebes rationalization of Oh Hiam, a which vitiates the transfer of property like undue influence
case on common mistake. or duress from a notice of a unregistered interest. Allowing
people to turn a blind eye when they have knowledge of such
wrongdoing would encourage irresponsible behaviour by

purchasers and mortgagees (esp. institutional lenders).
CRTPA AND S46(2)(B)

By narrowing fraud and expanding trust to include
In tripartite situations where legal owner sells property to
constructive trust, it is possible to include these personam
purchaser at a lower price and/or with the assurance that
claims under the exception.
third party (leasee/beneficiary)'s interest will be taken care of,

can perhaps use the argument that CRTPA applies since
Academic opinion
contract was for the benefit of third party. And because
Tang Hang Wu, Beyond the Torrens Mirror
CRTPA applies, beneficiary could sue under s46(2)(b)
UOB v. Bebes approach is too narrow limits the
exception to indefeasibility.
laws capacity to fashion appropriate remedial

responses.
It cannot deal with many situations (e.g. bribe in the
WHAT IF PARTIES WANT TO RESCIND THE CONTRACT? AG HK v. Reid (1994) where it was held that the
- Page 55 of 71 -

prosecutor held the land on trust for the HK approved by the court or otherwise proved to the satisfaction
government even after the land is registered. Using of the Registrar to be within the persons capacity.
UOB v. Bebes construction, land will remain in the UOB v Bebe (2006)
hands of the wrong doer). o HELD: A purchaser who gets his title from a
o Squeezing in personam exceptions into s. person with legal disability (e.g. in UOF Ltd v.
46(2), LTA will strain the statutory provision. Victor Sakayamary & Ors, where mortgage
of the estate of the deceased person fails to
satisfy s. 35(2), CLPA (had not obtained court
sanction for the sale of property) will be
46(2)(D) LAND ACQUIRED FROM deemed to know of the legal disability and
LEGAL DISABILITY cannot disclaim knowledge (ignorance of the
S. 46(2)(d), LTA: 1) Infant or 2) persons suffering from legal law is no excuse).
disability can recover proprietary interests from the registered
proprietor 3) if he knew of such legal disability at the time of
the dealing.
46(2)(e) ULTRA VIRES

Possibly expand definiton of legal disability to include doctrine S. 46(2)(e), LTA: Statutory recognition of the right to recover
of undue influence or factors affecting the aggrieved partys land from a registered proprietor if land was acquired through
ability to make legal decisions. Under actual undue influence unlawful exercise of statutory power.
extension of Sakayamary case

s 35(2) of the CLPA has the effect of imposing a legal disability APPLY S160 COURT'S POWER TO
on an administrator six years after the death of the deceased
with respect to the property of the estate.
RECTIFY
The administrator is under a legal disability in terms See above
of s 46(2)(d) of the LTA because he has no power to
dispose of the property of the estate without the
sanction of the court. Furthermore, because the legal
VOLUNTEERS S46(3)
disability of the administrator arises by operation of
law, a purchaser who gets his title from such an S. 46(3), LTA: Only a proprietor who is a purchaser can avail
administrator may not be permitted to disclaim himself to the section and claim a better title than was held by
knowledge of the existence of his legal disability, as his immediate predecessors.
ignorance of the law is not an excuse. Reinforced by ss. 154(1)(d), 157, LTA.

S. 39, LTA: Furthermore, Registrar will not register the
instrument executed by a person under disability unless it is
- Page 56 of 71 -

IN PERSONAM EXCEPTIONS
Pre- Frazer v Walker Oh Hiam (1980) Gosper (1991) Goh Swee Fang Betsy Lim (2002)
Bebe (1967) Parties contracted Mrs G mortgage (1994) Ho trsf land to Lim for
Mrs F forged and for sale of rubber land to MM Parties were joint building of hses. Lim
mortgage property. land but agmt (registered). Mr G, tenants son trsf mortgaged land (for her
She defaulted and included vendors w/o K of Mrs G, property to cos benefit). Mortgee
mortgee sold hse. Neither parties forged and mother on had K of Ho-Lim agmt
property to W, who intended for sale of increased loan promise of sales and agreed to be bound
had no K of the hse. Land was amount. MM proceeds. Mother by Hos equitable
forgery. W sued. registered. enforced against sold land at interest but later
Obiter: indefeasibility Held: common Mrs G. undervalue. repudiated.
does not prevent mistake Torrens Held: MM assisted Held: purchaser Held: Lim liable for
claim in personam, in not deprive in in Mr Gs forgery by knew breach of trust &
law or equity personam claim in producing arrangement and contract. Mortgee not
equity on grounds of Certificate of Title paid mkt value liable for fraud no
conscience. personal equity bound by fraud, personal
Rectification arose in favour of constructive trust. dishonesty or moral
allowed Mrs G. turpitude; but personam
Criticised: MM claim constructive
under no obligation trust.
to Mrs G [?] Bebes obiter: can be
reinterpreted as fraud
[?]
Post- Bebe (2006) [X] Sivalolunthu (2008) Loo Chay Sit (2009)
Bebe Bebe mortgage [X] [X]
property to UOB for Df obtained land by LCS alleged to have
daughters biz. Bebes defrauding other paid for house held
lawyer witnessed Dfs. Df mortgaged by LCL on resulting
signing and delivered land to Pf. trust.
original CT. UOBs Held: failure to Held: on evidence,
clerk knew OCT eliminate risk of failed to establish
cancelled. undue influence not resulting trust.
Held: fail to inquire wilful blindness or Obiter: resulting
not wilful blindness fraud. Discrepancies trust recognised
akin to fraud no not dishonest or under 46(2)(c).
dishonesty, moral fraud. No personal
turpitude or want of equity for undue
probity or intent to influence.
disregard Bebes
rights. At most clerk
was negligent.

It has been said that the principle of indefeasibility does not ** Find an analogous case in personal equity and say client
preclude the right to bring against a registered proprietor a may succeed (see above)
claim in personam, founded in law or in equity (Lord
Wilberforce in Frazer v Walker). This position has been However, it is important to note that our courts, in UOB v.
supported by a litany of cases such as the majority in Bahr v Bebe, cautioned against the undue reliance on the concept of
Nicolay which characterized the fraud as constructive trust, unconscionability to erode the principle of indefeasibility
which was followed locally in Betsey. Indeed, in the present under the LTA. The court held that while the LTA might not be
case... exhaustive of all claims that could be made against a
- Page 57 of 71 -

registered proprietor (per Baalman), having regard to the Further, no compensation for any loss occasioned by
policy objectives of the LTA to reduce uncertainty and to give a breach of trust in a trust situation (s. 151(5)).
finality in land dealings, our courts had to be slow to engraft
onto the LTA personal equities that were not referable directly UOB v Bebe
or indirectly to the exceptions in s 46(2) of the LTA. The court Court hinted that Mdm Bebe had a claim against the
even went further to show how the litany of cases, which Registrar in the assurance fund.
allowed personal equity, falls within the exceptions in s. 46(2). Chan CJ:
o if Registrar has no defence to any such
Furthermore, a strict approach to the encroachment of claim, he will do what is right by the
personal equities under the LTA might not necessarily be respondent and required of him by law.
unfair to persons holding unregistered interests in registered Both requirements met:
land as such persons were free to protect their interests by o Registrar registered UOBs mtgage despite it
lodging caveats against the registered title. Therefore, while being based on a cancelled COT
implied exception to indefeasibility is technically possible it o Mdm Bebes claim barred for indefeasibility.
should exhibit at least the same degree of moral turpitude as
fraud and be referable to the express provisions.

For example, our present case could arguably fall under...

**Resolve present case into the s46 exceptions, and say
therefore unlikely to succeed in in personam exception.

ASSURANCE FUND

Rationale
A concomitant, though perhaps not a necessary one to the
principle of indefeasibility of title is that the State should
compensate a person who has been deprived of his interest
in land through the operation of the system.

Requirement
S. 151(1) LTA: Registrar to set aside a proportion of fees
collected for the Assurance Fund.
Claimant must prove that he has been deprived of
his land, or sustained loss or damage through any
omission, mistake, or misfeasance of the Registrar,
or any member of his staff, whether in bringing the
land under the LTA or in registering any instrument.
Claimant also then barred from recovering his
interest under the provisions of the Act in other
ways.

Contributory negligence
Court can take into account contributory negligence on the
part of the Pf (s. 155(2)).
In Bebe, if claim was made against Assurance Fund,
issue of contributory negligence. may arise because
Mdm Bebe left her COT arnd for daughter to
misappropriate.
- Page 58 of 71 -

Caveats CAVEAT VS REGISTRATION

1. A caveat does not create an interest (Asiatic
FUNCTION Enterprise)
a. At the point of registration, the interest
1. STATUTORY INJUNCTION comes into being. But at the point of lodging
caveat, you must already have the interest
1. To give the caveator a chance to prove her claim (per
in land
Griffith CJ Butler v Fairclough)
2. Caveats expire upon 5 yrs
2. Serve as a statutory injunction to preserve status
a. For registration, it will not change until next
quo. (Cathay Theatres v LKM Investment)
transaction.

3. Burden of proof on caveator

a. A R/P is presumed to have title, until
2. NOTICE otherwise proven.
b. S127, LTA allows challenge to the caveat,
Operates as notice to all the world that the registered
and if lodging of caveat is found to be
proprietors interest is subject to the equitable interest
wroungful, frivolous or vexatious, then s128,
alleged in the caveat
LTA provides for pecuniary damages
Butler v. Fairclough (1917)

o HELD: The caveat also operates as notice to
the world that the registered proprietors
interest is subject to the equitable interest PROCEDURAL ASPECTS
alleged in the caveat.
Eng Mee Yong v. Letchumanan (1979) 1. LODGING A CAVEAT (S116,117)
o HELD: The system of private caveats is
Once lodged, Registrar will first make a provisional
substituted for the equitable doctrine of
notification in the Caveat Index.
notice.
Meanwhile Registrar will check tt documents are in
o Courts will give you interlocutory injunction
order (but he will not investigate validity of the claim)
when your claim is neither frivolous nor
Once in order, Registrar will officially enter the caveat
vexatious serious questino to be tried
into the respective folio. [THIS WILL BE THE DATE OF
United Overseas Finance v. Mutu Jeras (1989)
LODGEMENT]
o HELD: Singapore courts agree that the
He will notify caveatee (ie. the R/P(s) of the prop
purpose of the caveat is to give notice. The
named) of caveat.
LTA gives effect to this by providing in s. 49,
If there is some documentary defect in caveat,
LTA that the priority of unregistered
Registrar will notify caveator caveator has 14 days
interests in land is determined by the date
to rectify or it shall be deemed withdrawn.
of lodging a caveat (except in the case of

fraud). The mere notice of an unregistered

interest is not fraud.
2. FORM OF THE CAVEAT (S115(1))
Provision says shall so all requirement listed are
3. PRIORITIES (S49) compulsory.
Generally includes:
Priorities settles the issue of priority between competing
o Include name of caveator and the caveatee
unregistered interests.
o Nature of the interest claimed
S. 49(1), LTA: Except in the case of fraud, between 2
o Grounds in support of the claim
unregistered interests the first to be protected by a
o Lot affected by the caveat.
caveat has priority.

The date of lodgement of the instrument for
AMOUNT OF DETAILS REQUIRED
registration shall be the equivalent of the entry of a
caveat.

- Page 59 of 71 -

Alrich Development Pte Ltd v. Rafiq Jumabhoy (1993, When a caveat lapses, it has no more effect on
SGCA) caveats should not be removed unless subsequent registration of other dealings.
defects were substantial
o HELD: Not necessary to state in the caveat
exhaustive detail of either the estate or
interest claimed or the grounds of claim. So
4. EFFECTS OF LODGING A CAVEAT
long as the terms of the caveat give a fair S 1 1 7 , 1 1 9 , 1 2 0 , 1 2 7
indication of what estate or interest the
caveator claims and the grounds of his IMMEDIATE IMPACT
claim, that is all that is required for the
purpose of notifying it No Sequence of events LTA
o Defects in the form will not cause the caveat 1 Prohibits further registration S 119(4)
to be struck down unless defect was Effective from date of S 119(1)
substantial and there was prejudice ie. they lodgment
are 1) meant to mislead and 2) go to the 2 Registrar notifies caveatee that caveat S 117(1)
root of the underlying transaction. has been lodged and registered S 120(1)
If caveator tries to lodge a
dealing, of which registration
is prohibited by a caveat,
3. TERMS OF A CAVEAT (S115(2))
Registrar shall serve notice
A caveat works by prohibiting the registration of a on caveator
subsequent dealing. 3 Application for removal of caveat S 127(1)
o Unless the dealing is expressed to be subject Caveatee may then inform
to the interest claimed by the caveator. Registrar that caveat is S 127(2)
o Unless the caveator or his authorised agent frivolous
consents to the registration. Registrar will serve 30 days
The extent of the registration depends on the form of notice to caveator to respond
the caveat. If caveator does not respond,
2 types of terms: caveat will be cancelled by
o Registration possible, but subject to Registrar
interest
o Prohibit registration, subject to consent in

writing
CHALLENGING THE CAVEAT

When there is a challenge of the caveat, the caveator must
Cathay Theatres Pte Ltd v. LKM Investments Holdings
show that it has a serious question to be tried AND that, on
(1998) a registered proprietor who registered
the balance of convenience, the status quo (ie. caveat
subject to interest of caveatee can still challenge
remaining there) shd be maintained (Leong Sze Hian v Teo Ai
the caveat under s127 LTA: meaning, R/P can still
Choo (SGCA1987).
challenge the caveat even though he initially

acknowledges it while registering
Subsequently if it goes to trial and the trial finds that the
o HELD: Even when the subsequent dealing is
caveator has no claim, he must pay damages.
registered subject to interest of the

caveator, the newly registered proprietor
can still challenge the interest claimed.
o Subject to interest merely acknowledges 5. LIFESPAN OF CAVEAT
that the title is defeasible to the extent of

the interest claimed, but does not mean that
LAPSE (S121,122)
he acknowledges the interest in land.

All caveats have a lifespan of 5 years, after which it
Subject to consent when the caveator has merely
automatically lapses and every benefit ends with it, thus
consented to 1 registration, the caveat is still good to
ceasing to affect the land as per s121(1)(b). The caveat can,
forbid the registration of other dealings.
- Page 60 of 71 -

however, be extended for periods of 5 years at a time as per (2) The Registrar shall not be concerned to satisfy himself
s122. whether or not a solicitor who signs an instrument of a
withdrawal of a caveat as solicitor for the caveator or for the
Regarding PRIOITIES of caveat, it can be illustrated in the person mentioned in subsection (1) (b), (c), (d) and (e) has the
following scenarios: authority to withdraw the caveat.
A lodged caveat 1 Apr 1999 B lodged caveat 1 Jul (3) An instrument of withdrawal of a caveat, which is lodged
2000 A then renews caveat before expiry A still with and accepted as being in order by the Registrar, shall
enjoys priority over B. take effect from the date of the notification in the records
A lodged caveat 1 Apr 1999 B lodged caveat 1 Jul maintained by the Registrar, either as notified in the Caveat
2000 A never renew caveat expire A lodges Index or the land-register, as the case may be.
fresh caveat over the same interest A loses priority.

Alternatively, when there is a new dealing being registered, A caveat is deemed withdrawn from the date the
the caveator would be informed by the Registrar as per s notification is made in the records.
120(1). If Ctors interest under the caveat has lapsed, he is
If there is no order by the court extending the obliged to remove his caveat within 7 days or he is
operation of the caveat (s120(1)(a)) liable for wrongfully keeping a caveat on s. 128(4).
or if the dealing has not been uplifted, withdrawn or When signing S&P agreement, purchaser will lodge a
otherwise becomes incapable of registration caveat to protect his interest. Does he have to
(s120(a)(b)) remove the caveat so that transfer from vendor can
at the expiration of 30 days from the date of the take place?
service of the notice, the caveator has to register the o As per s121(2), where the interest in the
dealing. land affected under the dealing is similar to
that in the caveat, the dealing may be
registered by the Registrar and, upon its
WITHDRAWAL (S126) registration, the related caveat shall lapse
and cease to have any effect
Withdrawal of caveats
126. (1) A caveat may be withdrawn either wholly or as to
part of the land thereby affected by an instrument of
withdrawal signed
(a) by the caveator or his authorised agent including a
solicitor acting on his behalf;
(b) where the caveator is a natural person who has died, by
his personal representative or the trustee of the caveators
estate;
(c) where 2 or more caveators claim to be entitled as joint
tenants to the estate or interest protected by the caveat and
one or more (but not all) of them has died, by the surviving
caveator or caveators;
(d) where the caveator is adjudicated a bankrupt, by the
Official Assignee; or where the caveator is a corporation and
is in liquidation, and the estate or interest claimed by the
caveator has become vested in the liquidator, by the
liquidator;
(e) by the person or the committee to whom it is entrusted,
pursuant to the Mental Disorders and Treatment Act (Cap.
178), the management and care of the estate or interest
claimed in the caveat; or
(f) by the solicitor acting for any of the persons mentioned in
paragraphs (b), (c), (d) or (e).
- Page 61 of 71 -

ISSUE 1: "INTEREST IN LAND" To establish that purchaser has equitable lien (UMBC v
Goodhope Realty):
Where a purchaser has 1) paid the contractually
S115(1) any person claiming an interest in land agreed purchase price of the property to be
purchased and the 2) contract goes off through no
Lodging a caveat of itself does not confer an interest. The fault of the purchaser, he has an equitable lien on
caveator must have a pre-existing interest of land. However, the property: Rose v Watson , Whitbread v Watt
the caveator need not prove his interest at the point of The purchaser has a clear right to a lien upon the
lodgement. Neither does the Registrar have a duty to vendor's interest for the money expended by him on
investigate or probe. Hence the big qn in every case is the property. There is an implied contract in every
whether As interest is or is not an interest in land. case between vendor and purchaser that the
purchaser shall have a lien on the property to the
Most tricky when dealing with contracts for sale and purchase extent of the purchase money he has paid, and here
of land. Because it is done in stages, it can be blur whether X there is an express stipulation that the money
has or has not an equitable interest in the land. The traditional expended shall be repaid: Middleton v Magnay.
test is whether there is a specifically enforceable contract. But the basis for the declaration of the lien for the
sum was the expenditure thereof on the premises; if
the amount was expended or paid for other purposes
RESCISSION OF CONTRACT unconnected with improvement of the premises no
lien could possibly arise.
Where a claimant has rescinded the contract through his
actions, and it is clear that he is no longer claiming specific Application (UMBC v Good Hope Realty)
performance, he would no longer be said to have any interest The payment of the security deposit was entirely
in the land capable of being registered (Virginia Developments different from that of a payment of purchase money
v Behem Investment). by a purchaser for the land agreed to be purchased.
No part of the security deposit had been paid by the
Application tenant for or in respect of any part of the building.
First, find proof of intention that he is no longer Even if any equitable lien could arise, it arose at the
interested in contract time when the security deposit was paid to the first
o "By its notice of rescission, demand for defendant (owner). An equitable interest was not
repayment of purchase money, pleadings registrable under the LTA. While a caveat may be
and case made at the hearing, has been one lodged to protect the interest, no caveat was lodged
of denial of the continuing existence of the by the plaintiffs (tenants) at that time or
contract on which it purported to found its subsequently prior to the registration of the
caveat" = no more specific performance mortgage in favour of the second defendants
Second, if such proof is found, other party can sue for (mortgagee)
wrongful caveat
o In Behem Investment, it was held that

Behems caveat should be removed, and
the Behem should pay Virginia R/P OR MORTGAGOR'S RIGHTS
compensation for any loss or damage on A proprietor is entitled to lodge a caveat against his own
account of its wrongful retention of the land (Societe Generale v Good Property Land Development
caveat in the Registry of Land Titles. Pte Ltd; Barry v Heider (HCA)).

A registered proprietor is entitled to lodge a caveat against his
REPAYMENT OF DEPOSIT own land. Even if he is a mortgagor, he still has an equity of
redemption which entitles him to lodge a caveat to prevent
Equitable lien is a caveatable interest (as opposed to right to that equity from being improperly destroyed by any act of
security deposit which is a personal right (Hua Chiao) and is the mortgagee.
thus not caveatable).
Application (SG v Good Property)
- Page 62 of 71 -

In the present case, the plaintiffs were the lawful Application
assignees of the defendants right, title and interest Novel Ho (SGHC2006)
in the property, subject to the defendants equity of o Caveat not removed. An option to purchase
redemption. The defendants no longer had an land is caveatable and there is little
unfettered right to deal with the property except in difference between option and right of first
accordance with the terms of the security or to refusal. Even if the right of first refusal is not,
redeem the mortgage. Upon any default by the at first blush, clearly specifically enforceable,
defendants, the plaintiffs as mortgagees would have an injunction can be sought and then a
a superior right to that of the defendants as caveat can be lodged under s. 115(3)(b), LTA.
mortgagor to deal with the property. Ong Chay Tong (SGCA2009)
The defendants were in default. They lodged their o HELD: Caveat removed. Court approved of
caveat with a view to preventing the plaintiff from Ho Seek Yeung Novel v. J & V Development,
exercising their power of sale which they alleged and held that a right of first refusal is a
had not arisen in spite of the default. In these caveatable interest under s. 115, LTA.
circumstances, the defendant must satisfy the court However, on the facts, P gave up its right to
that the power of sale has not arisen and that repurchase the property and no longer had
therefore they were justified in lodging their caveat. a caveatable interest when he caveated
The defendants have not established a valid ground later
for lodging or maintaining a caveat against the
plaintiffs though they may have an interest in the
property for the purpose of lodging a caveat.
Therefore, the caveat ought to be removed.
MATRIMONIAL ASSETS
A wife technically does not have an interest over the
husbands property. The division is pursuant to a statutory
power conferred on the courts. Until this power is exercised, it
OPTION TO PURCHASE is inaccurate to say that the spouse has interest in the
A person who has an option to purchase the land is said to property held by the other spouse (inchoate expectation of
have an equitable interest in land and may lodge a caveat wife not caveatable) (Lim Kaling).
(Eng Bee Properties v Lee Foong Tatt; Ong Chay Tong). This is
based on the availability of specific performance of the However, a caveat is maintainable if she
option contract that leads to the contract for sale and Contributed to the purchase price (resulting trust)
purchase. Satisfied the elements of common intention
constructive (constructive trust)
Application Obtained an injunction or decree nisi for the
In Lee Foong Tatt, option to purchase lapsed and property: s115(3)(b) criticisms: this requirement of
was not exercised, and that Lee's allegations that Eng injunction before caveat requires more procedures
Bee delayed his option to purchase by requesting for (multiplicity of proceedings)
bribes were unfounded, hence no equitable interest;
caveat cannot be lodged. Criticisms:
A wife should be allowed to lodge a caveat per se, even if
there was no equitable interest or injunction. She would be
liable for wrongful lodgement if it was vexatious. Otherwise,
RIGHT OF PRE-EMPTION detriment to wife if husband dissipates matrimonial assets.
Right of first refusal is a caveatable interest (decision
approved by SGCA in Ong Chay Tong). Unlike an option to Chai Mei Leng v Cheng William (No 2) [1998] SGHC
purchase (where the party can sue for SP), the party with right 381 - decree nisi (quashed) pending distribution of
of first refusal cannot enforce performance if the grantee does matrimonial assets is NOT a caveatable interest
not want to sell. However, it seems that the court recognised Lim Kaling v Hangchi Valerie [2003] 2 SLR 377 1.
the right of first refusal as a caveatable interest on the basis inchoate expectation of spouse who had made no
that the right can be enforced by injunction (cf s115(3) where contribution to purchase price of property is not a
an injunction is expressly caveatable). caveatable interest | 2. best course of action for wife

- Page 63 of 71 -

is to institute proceedings under s132 of WC for grant our courts yet, it is submitted that our courts are likely to
of injunctive relief adopt this new approach.
Eu Yee Kai Alexander Junior (alias Eu Sandy) v Hanson
Ingrid Christina [2004] SGHC 214 decere nisi **lodged without legal right and with intention to infringe
pending division of matrimonial assets is a caveatable rights of caveatees?
interest

How to reconcile Eu Sandy with Lim Kaling and Chai Mei VEXATIOUSLY
Leng? Policy argument? That Eu Sandy would stretch the
principle of certainty under the Torrens system too far? For the element of vexatiously, it is defined as instituted
without sufficient grounds for the purpose of causing trouble
or annoyance to the defendant and not intended to lead to a
ISSUE 2: WRONGFUL CAVEAT serious result.

Under s. 128(1), caveatees (earlier caveators) can seek ** Was it intended to cause trouble or annoyance?
compensation for pecuniary loss as a result of wrongful
lodgement of caveats. There are 3 elements to this, that the
caveat is lodged (1) wrongfully, (2) vexatiously or (3) without WITHOUT REASONABLE CAUSE
reasonable cause. These 3 elements are to be read
disjunctively (Tan Soo Leng David v. Wee Satku, followed in For the element of without reasonable cause, it is an
Eng Bee Properties). objective test of whether the caveator has an honest belief
based on reasonable grounds that he had such as interest in
the land (Ho Soo Fong v. Standard Chartered Bank). Lack of
honest belief can be determined from the caveators sources
ELEMENTS OF WRONGFUL CAVEAT of information and whether he consulted a solicitor.

WRONGFULLY WIDE AND NARROW ** Did he have an honest belief on reasonable grounds?

For the element of wrongfully there are two interpretations
The wide interpretation is that wrongfully means without
legal right (Tan Soo Leng David followed in Eng Bee DAMAGES
Properties). After establishing either one of the elements, we now turn to
the issue of damages. Damages are awarded to put the
However, Tan Sook Yee criticised that this wide approach claimant in the same position as if the caveat have not been
prevents people with an honest belief from lodging a caveat. lodged (Mooka Pillai v. Kushvinder Chopra). For a claim to
Furthermore, s.115, LTA, explicitly provides the ability for succeed, 3 elements needs to be satisfied: (1) reasonable
anyone with a claim in land to lodge a caveat, and hence it foreseeablility, (2) causation, (3) duty to mitigate losses (Hoo
must have anticipated that the claims may or may not be Soo Fong v. Standard Chartered Bank).
substantiated later. It is thus unfair to make the caveator pay
compensation.
FORESEEABILITY
Tan Sook Yee then suggests that wrongfully should include
the element of intention as was included in other Torrens Whether the loss was reasonably foreseeable does not
legislations. Indeed, this is the narrow interpretation that was require the caveator to have actual knowledge of the financial
also mentioned in obiter dicta by CJ Chan in Ho Soo Fong v. condition of the claimant constructive knowledge (ought to
Standard Chartered Bank that wrongfully means having no have known that lossess would have resulted from the
legal right and with the deliberate intention to infringe the wrongful act) is sufficient. The test is whether a reasonable
rights of other caveatees. CJ Chan went on to say that the caveator with the requisite knowledge would have reasonably
wide construction would otherwise render the other words in foreseen the loss.
the section otiose. Hence, whilst the narrow interpretation is
merely in obiter and has not been authoritatively adopted by
- Page 64 of 71 -

**Whether caveator should have foreseen the loss suffered by
caveatee.

CAUSATION

Under causation, the trial judge in Ho Soo Fong held that
impecunoisity of the claimant is not attributable to the caveat
(the Liesbosh principle). However, on appeal, CJ Chan rejected
the Liesbosch principle and says that a tortfeasor must take
his victim as he finds him, and in some cases the tortfeasor
caused the claimants impecuniosity. CJ Chan also noted that
the House of Lords in Lagden v OConnor had also declined to
follow Liesbosch.

**Whether caveator caused the damage.

DUTY TO MITIGATE

A caveatee has a duty to mitigate the losses he suffered under
s. 128(1) (Ho Soo Fong). It often includes the caveatee timely
challenging the caveat under s. 127 (Mooka Pillai), however
this is not absolute and it depends on what is reasonable in
the circumstances (Ho Soo Fong).

**Did cavatee mitigate his losses?

- Page 65 of 71 -

LTA ESSAYS Criticisms on Bebe limit fraud, expand trust:
Crown, Back to Basics: Indefeasibility of Title under the
FRAUD
Torrens System: It is submitted that immediate indefeasibility

is the general rule and since fraud lies with the exception, it
There is the outstanding issue of the problem via-a-vis Torrens
does not have to be constricted to the general principle of
land and the constructive trust posed by a certain factual
immediate indefeasibility such that it only applies at or before
pattern which always recurs in land law cases (Bahr, Ho Kon
registration.
Kim v Lim Gek Kim Betsy). The recurring factual pattern can be

summarised as follows: Y has rights in land beloniging to R1; Ri
transfers the land to R2; R2 knows of Ys rights and buys the
before and at the time the contract is entered into or at the
land at a lower value, and in some cases, expressly agrees to
time of registration of the instrument is correct. However, it is
honour Ys rights.
wrong to say that Betsy is on all fours with Loke Yew and can

be re-interpreted as fraud. Loke Yew should come under fraud
Singapores position
exception since PSR had no intent to recognise Loke Yews
Following Bebe, the Singapore courts would most likely
interest from the start (unlike in Betsy). Betsy can be properly
characterise this as fraud under s 46(1) of the LTA.
explained if the court adopts and expands the obiter dicta in

Loo Chay Sit to allow for constructive trusts under s46(2)(c)
exception. This would effectively restrict the fraud exception
to actual fraud at time of registration, while expanding the
time of registration of the instrument is correct. However, it is
trust exception to allow constructive trust, which Betsy will
wrong to say that Betsy is on all fours with Loke Yew and can
come under.
be re-interpreted as fraud. Loke Yew should come under fraud

exception since PSR had no intent to recognise Loke Yews

interest from the start (unlike in Betsy). On othe other hand,
CONSTRUCTIVE TRUST
the facts in Betsy is distinguished as it deals with subsequent

repudiation of a contract.
Constructive trusts should be allowed as an exception to the

indefeasible title under s46 LTA. Although the SGCA in Bebe
It is suggested that Betsy can be properly explained if the
noted that the language of the subsection suggests that it only
court adopts and expands the obiter dicta in Loo Chay Sit to
applies to express trusts and not constructive trusts, there are
allow for constructive trusts under s46(2)(c) exception. This
valid reasons allow constructive trust as an exception.
would effectively restrict the fraud exception to actual fraud

at time of registration, while expanding the trust exception to
First, the SGCA with a differently-constituted bench in Loo
allow constructive trust, which Betsy will come under.
Chay Sit v Estate of Loo Chay Loo suggested in obiter dicta

that resulting trust can be recognised under s46(2)(c) LTA, in
Pre- Bebe:
contrary to Bebes obiter dicta. This suggests that constructive
Assets v Mere Roihi and Waimiha Sawmilling took the position
trust should fall within s46(2)(c) LTA as well.
that fraud under the Torrens system means actual fraud,

dishonesty of some sort, not what is called constructive or
Second, it serves to reduce personal equities. Most cases can
equitable fraud.
be resolved relying on the constructive trust approach. It does
Loke Yew seems to recognise that there was fraud because
not defeat the policy objectives of the LTA to reduce
PSR had no intent to recognise Loke Yews interest from the
uncertainty and to give finality in land dealings (Bebe),
start. The problem was most clearly displayed in Bahr v
because it is possible to adopt a principled approach towards
Nicolay, where the court was split on whether it constitutes to
the imposition of constructive trust.
Torrens fraud where there was a subsequent repudiation of
Crown, Back to Basics: Indefeasibility of Title under
promise or only includes initial fraud at the time of
the Torrens System: the decision in Bebe can be
contracting.
criticised on 2 points: (1) the language does not

expressly indicate express trust and (2) allowing
Bebe:
constructive trusts reduces risks of backdoor
The SGCA in Bebe noted that the LTA system is based on
approach to rely on personal equities.
immediate indefeasibility and therefore, the fraud must exist
Tang, Beyond The Torrens Mirror: A Framework Of
The In Personam Exception To Indefeasibility: A
time of registration of the instrument.
- Page 66 of 71 -

constructive trust claim arising from the wrongful 2-PARTY VITIATING FACTORS
conduct of the registered proprietor falls within the
in personam claim but it must be something more Equitable fraud?
than merely becoming the new registered proprietor Crown: These vitiating factors should fall under equitable
with notice of a prior unregistered interest. Since fraud and thus s46(2)(a) LTA:
indefeasibility of title does not grant immunity to the Baalman: Fraud is not defined by the Ordinance, for
registered proprietor for its wrongdoings, the the reason that it would be no more practicable to
constructive trusts (as follows) should be within the attempt a definition now than it has been at any
in personam exception where the person acquires other period in the history of the Torrens System
property in breach of fiduciary duty, proprietary The general meaning has been left at large, to be
estoppel stemming from the conduct of the determined by the Court in the particular
registered proprietor (Goh Swee Fang), a specifically circumstances of each case. (quoted with approval
enforceable contract to dispose of land but reneges in Bebe). Hence, the definition of fraud remains open
on the agreement (Bahr v Nicolay, Betsy Lim, to interpretation.
Narayanasamy, Betsy Lim), common intention Waimiha: fraud may be established by a deliberate
constructive trusts, and purchase of property with and dishonest trick causing an interest not to be
bribe monies. registered and thus fraudulently keeping the register
clear. It is not, however, necessary or wise to give
Third, a distinction can be drawn between notice of a abstract illustrations of what may constitute fraud in
wrongdoing which vitiates the transfer of property like undue hypothetical conditions, for each case must depend
influence or duress from a notice of a unregistered interest. upon its own circumstances.
Allowing people to turn a blind eye when they have Bahr v Nicolay: These comments [in Waimiha] did
knowledge of such wrongdoing would encourage irresponsible not mean all species of equitable fraud stand outside
behaviour by purchasers and mortgagees (esp. institutional the statutory concept of fraud ... it must be a certain
lenders). species of equitable fraud where there were
Low, "The Nature of Torrens Indefeasibility: dishonesty
Understanding the Limits of Personal Equities'": Grgic v Australian & NZ Banking Group (affirmed in
where constructive trust arises out of conduct on the Bebe): those specific of equitable fraud which are
part of the registered proprietor, which is something regarded as within the concept of fraud are those
more than mere registration with notice of a prior in which there has been an element of dishonesty or
unregistered interest, it would not undermine the moral turpitude on the part of the registered
principle of indefeasibility. The problem lies with the proprietor of the subject interest or on the part of his
confusion of notice of the unregistered interest with or its agent.
the notice of the wrongdoing which gives rise to the Bebes case: The hallmark of fraud is dishonesty or
legal liability. No reason why a cause of action based moral turpitude, which usually stems from greed,
on notice of something other than prior title should and greed simply means taking something of value
be prohibited under the Torrens system. which does not belong to you.

Since the dicta in Loo Chay Sit can be read as indicating that It is possible to interpret these vitiating factors, which involves
constructive trust may fall under s46(2)(c), it would not render some form of dishonesty or moral turpitude to induce/compel
statutory exceptions superfluous or increase uncertainty in parties into contracting in order to gain some benefit from the
terms of introducing personal equities. It would ultimately be contractual arrangement. This would reduce the backdoor to
an issue of statutory interpretation to determine if the in personam claims.
particular case falls within s46(2)(c), which allows the court to
control the ambit of the constructive trust exception. - can be under s 46(2)(b) as well

- Page 67 of 71 -

INCHOATE EQUITY Policy reasons
The policy reasons for recognising tripartite undue influence
Inchoate equity should be allowed as an exception under are eludicated as follow:
s46(2) LTA for two reasons:
Academic Tang Hang Wu had argued that bank should act as a
First, s46 LTA provides that the registered proprietor only gatekeeper to prevent undue influence or unconscionable
hold land free from all prior titles and not indefeasibility conduct being perpetrated on the wife by the husband. This is
from personal claims. Therefore, damages for satisfying the because the banks are in a better position to shoulder the
equity should not be prevented under s46(2). burden to make further inquiries. Banks could simply factor
this risk and spread it by slightly increasing its charges and
Second, court should be allowed to impose a constructive interest rates. Therefore, Immediate indefeasibility acts as a
trust (as a way to satisfy the inchoate equity) and thus falling moral hazard, removes incentives for bank to put in place safe
under the exception of s46(2)(c), supported by Loo Chay Sits guard prcudues even tough they are best placed to do
case. something about. This would not be desirable because there is
disproprtionate loss to individuals who risk losing their whole
life savings.
HOW DOES THE ETRIDGE SITUATION FIT INTO THE
TORRENS SYSTEM There is hence a conflict of policy- the policy of respecting
ones indefeasibility of title and the policy behind Etridge. It is
This provides a quare in the law because-in unregistered land, argued that undue influence should not be construed as being
the banks failure to advise a wife would likely mean that the incompatible with Torrens system because the social utility of
bank cannot take title. However, in registered land, bank the doctrine the protection of vulnerable people in familial
prima facie has indefeasible title. situations far outweighs the principle of indefeasibility of
title.
The current position in Singapore
[As illustrated in this case] The failure to make further inquiry [However, this has been criticised on two grounds.
would not be characterised by the court as fraud, given that it
is probably due to negligence. Firstly, the policy reason elucidated by Tang has been critized
as it is unclear why banks should act as gatekeepers for cases
This is the position in Singapore. The CA in Bebe drew a of undue influence, where they are clearly not gatekeepers in
distinction between negligence and fraud, where the latter cases of identity fraud (Barry Crown). In both cases, the bank
does not fall under the definition of Torrens fraud. In fact, is at at the better position to bear the loss. In addition, it is not
Yung CJ made the observation that actions against banks for provided by the LTA that the courts would have discretion to
fraud would be unlikely to succeed because in ordinary defeat the indefeasibility of title.
banking transactions, there is no reason for the bank to act Possible reform: Perhaps a more coherent way of dealing
dishonestly or to seek to defraud the customers. This is with Etridge cases is through statutory amendment, should
similarly applicable to solicitors and unless there is evidence legislation agrees with the policy concerns, as what it was
that the solicitor has received payment well beyond their done in Queensland.
normal professional fees, it would be difficult to impute
fraudulent intention in any act or omission. Secondly, it has been said that cases like Etridge does not
involve Torrens system and indefeasibility of title (Kevin Low)
This was adopted in Sivalonthunku where fraud was not not It has been argued that the outcome in Sivakolunthu is correct
found eventhough the facts suggests that there is undue since in such 3-party undue influence cases, the only
influence and the solicitors should have known the risk due to transaction that is impugned is the mortgage transaction
the spousal relationship. itself. The borrower is alleged to have exercised undue
influence over the surety in the mortgage transaction and the
Therefore, as the law stands in Singapore, the Etridge mortgagee is alleged to have notice of the undue influence in
situation will not fall under s 46(2)(a). Indeed, it would be a the same transaction. In this case, the undue influence did not
strain to characterise the failure to make further inquiries as occur in the disputed transaction but rather, the transaction
falling in the ambit of Torrens Fraud. prior to that. As such, the personam claim should not be
against the mortgagee since the mortgagee is not a party to
the first transaction.
- Page 68 of 71 -

However, it is submitted that this reasoning is unsound. This uncertainty and to give finality in land dealings, our courts had
reasoning is based on Lows theory] to be slow to engraft onto the LTA personal equities that were
not referable directly or indirectly to the exceptions in s 46(2)
Other solutions? of the LTA. The court even went further to show how the
Given the policy factors, the courts would most likely allow for litany of cases, which allowed personal equity, falls within the
the exception and they could do this by: exceptions in s. 46(2). Furthermore, a strict approach to the
S 46(2)(b)? encroachment of personal equities under the LTA might not
Vitiating factors, such as tripartite undue influence can necessarily be unfair to persons holding unregistered interests
arguably fall under s 46(2)(b), especially in light of the CAs in registered land as such persons were free to protect their
interpretation of Oh Hiam. The CA in bebe held that Oh hiam interests by lodging caveats against the registered title.
was a case where one party enforcing his contractual rights This stance is similarly held by academic Barry Crown.
against ther registered proprietor to correct a common
mistake under s 46(2)(b) of the LTA. Criticisms: To suggest that because the Singapore Torrens
system is statutorily codified and thus in personam exceptions
However, it should be noted that Oh Hiam is a case where the have a smaller role to play is flawed for 3 reasons: (1) This
parties where trying to vitiate the contract, instead of would lead to strained meaning of fraud and other statutory
enforcing it. Therefore, the courts interpretation in Bebe exceptions to indefeasibility. (2) Bebe did not totally reject the
seems to open the door for other vitiating factors to fall under concept of in personam but merely slow to engraft and (3)
s 46(2)(b) statutory language of LTA does not point to the absence of a
general in personam exception in Singapore.
This approach could be critisized as it distorts the plain Narrow view restricts development in terms of remedies (i.e.
meaning of the statute. By shoe-horning novel situations into imposing constructive trust not possible as it is a remedy of a
the statute, this might have the unintended effecr of casting claim in breach of confidence) and it expands and strains
ambiguiaty and causing undertainty. construction of the concept of Torrens fraud and other
statutory exceptions of indefeasibility.
In personam exceptions?
Alternatively, it could be argued that tripartite undue Wide view as per Kevin Low: in personam actions do not
influence cases should be recognised as a special class of cases contradict indefeasibility of title
that can be engrafted onto the LTA, as per suggested by Tang It is argued that here is no contradiction between the concept
Hang Wu. of indefeasibility and allowing certain claims to be brought
against the registered proprietor. The in personam claims are
Broader question: Should in personam be accepted in not really an exception to the principle of indefeasibility and
Singapore? indefeasibility operates on a different plane than ... [the in
Contrast narrow and broad view. + evaluation. personam exception] because the former is intended to
prevent adverse claims on the basis of prior title and no more
Possible reforms whereas the latter allows only claims independent of prior
- Amending the legislation, as what Queensland did title. As such, the two do not contradict each other but are
- Assurance fund independent, complementary rule. Lows theory: Where a
claim is based on prior title, it falls foul of the principle of
indefeasibility and cannot be brought against the registered
IN PERSONAM proprietor. If a claim is not based on prior title, then it falls
outside the indefeasibility principle and within the scope of in
Narrow view: In personam claims should be viewed personam claim.
restrictively because it has the possibility of undermining the Criticisms: (1) This view is excessively wide, destabilises
concept of indefeasibility Torrens system (2) It renders exceptions under s46(2)
In UOB v. Bebe, our Court of Appeal cautioned against the superfluous, (3) It is contrary to legislative intent - unlike other
undue reliance on the concept of unconscionability to erode jurisdictions without statutory exceptions, Baalman intended
the principle of indefeasibility under the LTA. The court held to reduce uncertainty by providing for s46(2)(b) and (c).
that while the LTA might not be exhaustive of all claims that The complication of the view arises because both common
could be made against a registered proprietor (per Baalman), law and equity has sought to protect property rights directly
having regard to the policy objectives of the LTA to reduce (i.e. declaration of right) and indirectly (i.e. tort of trespass)
- Page 69 of 71 -

therefore, it is not easy to identify the nature of claim to theft. Cases like Grgic v Australian and New Zealand Banking
determine if it may be brought as an in personam exception Group, Russon v Bendigo Bank, Bebe illustrates the
vulnerability of purchasers. These cases drew a distinction
Public policy approach as per Tang Hang Wu between negligence and fraud, with the effect even gross
A third view adopts a public policy approach and propose that negligence on the part of the mortgagee will not affect the
the court should look at each claim individually. The courts indefeasibility of title. This seems to be a system that favours
would have to balance between the need to repsect the fraud. In such cases, banks and financial institutions are in a
prinicple of indefeasibility and where other public polciy better position to bear the burden than indivisuals. Banks
considerations are more important (Tang Hang Wu). could factor this risk and spread the risk by increasing its
Criticisms: (1) no power under statute to set aside charges. As such, immediate indefeasibility acts as a moral
indefeasible title besides exception under s46(2); and (2) a hazard, and removes incentives for bank to put in places
case-by-case analysis of the policy decision would increase safeguards, despite them being in the best place to do so.
litigation and social costs. This suggestion would destabilise
the Torrens system. Perhaps it would be better to shift to deferred indefeasibility,
rather than use the concept of in personam exception (which
Evaluation is a messy ares of the law)
It is submitted that as long as there is a recognisable cause of
action [such as the cases like Etridge], in personam action Critisicm
does not necessarily fall afoul with the principles of It is argued however, that the connection between immediate
indefeasibility. By recognising clear causes of action indefeasibility and land fraud is too simplistic. Perhaps a
(supported by policy), the courts would not face the risk of better way is to impose a more rigorous conveyancing
going down the path of Merchantile. practice by the major players such as Land Office,
In fact, by attempting to shoe horn novel situations into the conveyancing lawyers, banks and Law Society. It is proposed
statute, the court runs the risk of distroting the plain that the more effective way to solve the problem is to
menaning of the statute, and this has the unintended effect of implement sound conveyancing practice (Tang Hang Wu)
casting ambiguity on the statute.
In addition, by adoption a blanket switch to deferred
It is acknowledged however that this is an instance of all indefeasibility imperils all registered title, since anyones title
roads lead to Rome and whether one is a proponent of in might be challenged at any time on the ground that it was
personam action or whether one supports the strict based on a defective instrument, until they transfer it to the
interpretation of s 46, these are different approaches which next purchaser. Therefore, it imposes a burden of inquiry on
would lead to the same result. all purchasers, which increases the cost of all conveyancing
transactions and defeats the fundamental purpose of the
Torrens system (that is to reduce uncertainty and costs for
OTHER SOLUTIONS conveyance)
Further, s46(1) LTA provides for immediate indefeasibility by
Possible application: the words whether or not he dealt with a proprietor.
Underlying problem of the all-or-nothing approach- Therefore, this approach is not possible without legislative
landowner is liable to lose his land (one of the largest intervention.
investment in lifetime) due to the operation of the system.
Extending this point, the curren Torrens system seems to Assurance fund as a solution?- a more relaxed scheme?
encourage litigation. This is because landowner who lost his According to Ruoff, the insurance principle is one of the 3 key
land would likely argue all possible ways to retrieve his land. principles underpinning all Torrens systems. The current
This undermines the efficacy of the Torrens system, which is assurance fund in Singapore under s155 read with 151 LTA is
intended to reduce uncertainty and to give finality in land limited to parties deprived of land or sustains loss or damage
dealings due to Registrars omission, mistake or misfeasance.

Deferred indefeasibility as a solution? To deal with identity [In Malaysia, there is no assurance fund albeit it does adopt a
fraud cases deferred infeasibility approach which mitigates the rigours of
Per Barry Crown: The move to immediate indefeasibility the lack of insurance.
seems dangerous in view the increase incidence of property In Australia, the difficulty in claiming from the assurance funds
(i.e. having to first sue the wrongdoer and failed), led to the
- Page 70 of 71 -

development of a comprehensive privately-funded title
insurance scheme.]

In the UK, the statute provides for an indemnity fund which
adopts a relaxed attitude towards compensation,
automatically making compensation to parties who lose their
land as a result of the operation of the system. The UK system
also shows preference for protecting the property rights of
the registered proprietor who is in possession. Where 2
parties are in dispute, the party in occupation will usually keep
the land while the other party will get monetary
compensation. This reduces litigation since it prevents the
occurrence of forcible eviction.

Hence, adopting a more relaxed compensation scheme, it
would provide a more satisfactory solution where it involves
two inoocent parties (such as identity fraud cases and Etridge
cases). In such cases, the bank would be satisfied with
monetary compensation for the loan provided, while the
owner gets to keep his property.

Some difficulties in this approach would be (1) the need to
increase fees in order to support Assurance fund and (2) since
private title insurance companies are businesses and no
private title insurance currently operate in SG, it is unlikely for
them to enter into small market like SG (and the lack of
awareness of the risks of losing their title).
However, it is submitted that it is better for all users of the
Torrens system to share the costs in assurance of title rather
than have the defrauded individuals bear the burden by
themselves. Further, given that the assurance funds have
been accumulated over the years, it should have consolidated
quite a decent buffer for claims which reduces the need for a
sudden spike in registration prices. Moreover, land
transactions are not frequent and most people would only
encounter them once or twice, which makes a slightly higher
administrative cost (as lifetime title insurance) reasonable.

- Page 71 of 71 -

Nick's Notes - Property

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Nick's Notes - Property

Uploaded by

Copyright:

Available Formats

-

Fixtures & Chattels

Presumption of resulting trust

2-PARTY APPROACH term for real (just as it was rejected in Aslan v.

PERIODIC LEASE Lord Templeman sought to argue that periodic

EQUITABLE LEASE shows that it was to prevent fraud and

PRIVITY OF CONTRACT o Clearly acceptable, as in Goldstein v Sanders

SUB-LEASE Where there is neither privity of contract nor privity of estate,

PRIOR BREACH (TO ASSIGNMENT)

REMEDIES from performance so there is no

Licences 3. CONTRACTUAL LICENCE**

S4: TRANSFERABILITY Original owners liability post-transfer

Mortgages EQUITABLE MORTGAGE / LTA

MTGOR (M)S RIGHTS COLLATERAL ADVANTAGE

EQUITABLE HELD: No prior right. Writ of seizure and sale was

MORTGAGEES V. REGISTERED WRIT

Land Titles Act

START: INDEFEASIBILITY aggrieved party or upon the Registrar''s own motion.

Caveats CAVEAT VS REGISTRATION

You might also like

Nick&#39;s Notes - Property

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Nick&#39;s Notes - Property

Uploaded by

Copyright:

Available Formats

-

Fixtures & Chattels

Presumption of resulting trust

2-PARTY APPROACH term for real (just as it was rejected in Aslan v.

PERIODIC LEASE Lord Templeman sought to argue that periodic

EQUITABLE LEASE shows that it was to prevent fraud and

PRIVITY OF CONTRACT o Clearly acceptable, as in Goldstein v Sanders

SUB-LEASE Where there is neither privity of contract nor privity of estate,

PRIOR BREACH (TO ASSIGNMENT)

REMEDIES from performance so there is no

Licences 3. CONTRACTUAL LICENCE**

S4: TRANSFERABILITY Original owners liability post-transfer

Mortgages EQUITABLE MORTGAGE / LTA

MTGOR (M)S RIGHTS COLLATERAL ADVANTAGE

EQUITABLE HELD: No prior right. Writ of seizure and sale was

MORTGAGEES V. REGISTERED WRIT

Land Titles Act

START: INDEFEASIBILITY aggrieved party or upon the Registrar''s own motion.

Caveats CAVEAT VS REGISTRATION

You might also like

Nick's Notes - Property

Nick's Notes - Property