3 - Klerk-Elias Liza (1993) 1 SLR (R) 0609

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[1993] 1 SLR(R) SINGAPORE LAW REPORTS (REISSUE) 609
Klerk-Elias Liza
v
K T Chan Clinic Pte Ltd
[1993] SGCA 28
Court of Appeal — Civil Appeal No 166 of 1991

L P Thean J, Warren L H Khoo J and M Karthigesu J
23 April 1993
Civil Procedure — Damages — Damages awarded in lieu of rent — Whether
deduction for income tax to be made from damages awarded — Section 10(1)(f)
Income Tax Act (Cap 134, 1992 Rev Ed)
Civil Procedure — Damages — Interest — Whether interest on damages should be
awarded — Section 9 Civil Law Act (Cap 43, 1988 Rev Ed)
Landlord and Tenant — Agreements for leases — Alleged repudiation by lessor —
Repudiation retracted or withdrawn before acceptance by lessee — Whether lessee
wrongfully repudiated lease by quitting premises
Landlord and Tenant — Agreements for leases — Whether valid agreement
concluded — Letter by lessor providing for formal lease to be drawn up incorporating
usual terms — Whether essential terms for valid lease settled — Whether agreement
void for uncertainty
Facts
The respondent owned premises which it leased to a company. The appellant
had two businesses, a beauty salon and a jewellery retail shop, which she ran
from a hotel. In mid-1983, the appellant entered into an agreement with the
company to sublet the premises to her for the remaining months of its lease for
$8,100 per month provided the respondent agreed. There followed a course of
negotiation between the respondent and the appellant, and on 7 July 1983, the
respondent wrote to the appellant confirming the terms of rental of the
premises. The rental price in that letter was stated to be $9,180 per month, and
was the subject of dispute, but was subsequently agreed to between the parties.
The letter stated that there was an option to renew at the end of the lease period,
“details of which will be incorporated in the lease”. It also stated that subletting
would be permitted, “details of which would be in the lease”. Subsequently the
appellant moved into the premises and began significant decorating of the
premises. On 13 September 1983 a formal lease was prepared by the
respondent’s solicitors and sent to the appellant. Clause 3(17) of the lease
provided for the prior written consent of the landlord to be obtained before any
assignment, sublease or parting or sharing of possession of the premises.
Clause 5(5) provided, inter alia, an option to renew the lease for a period of one
year and the terms for such renewal. The appellant refused to sign the lease on
the grounds that the terms were unacceptable. On 14 December 1983, the
respondent requested that Klerk-Elias vacate the premises in the course of the
week. However, on 27 December 1983, before the appellant accepted it, the
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610 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)
respondent countermanded its request and sought instead specific performance

of the agreement for the lease of the premises entered into on 7 July 1983. The
appellant denied the existence of any agreement and vacated the premises on
31 January 1984.
The respondent eventually leased the premises to another company (“Blitz”) for
24 months commencing 9 November 1984 at $6,300 per month. The respondent
commenced action against the appellant for damages for breach of the tenancy
agreement evidenced by or contained in the letter of 7 July 1983. The trial judge
held that there was a valid lease subsisting from 7 July 1983, that the appellant
had breached the lease agreement, and gave judgment to the respondent for
$167,378 and costs to be taxed. The appellant appealed. The respondent cross-
appealed for interest on the judgment sum under s 9 of the Civil Law Act
(Cap 43, 1988 Rev Ed).
Held, dismissing the appeal and the cross-appeal (Warren L H Khoo J

dissenting):
(1) All the essential terms for a valid lease agreement were clearly defined in
the letter of 7 July 1983, and the letter and the signed acceptance thereof
constituted a valid and binding agreement for a lease of the premises. The clear
terms of the letter and the surrounding circumstances all indicated unmistakably
the intention of the parties that that document was to constitute a binding
agreement between them for the lease of the premises on those terms pending
the finalisation and execution of a formal lease. An agreement to execute a
formal agreement did not prevent there being a valid and concluded agreement
in the meanwhile. The term of the option clause was never a matter in dispute.
There was no conflict in the subletting clause to the extent that a provision that
subletting was not prohibited was not materially different from permitting
subletting with the formality of first obtaining the written consent of the
landlord: at [41], [42], [51], [54] and [55].
(2) Having regard to the evidence, even if the letter of the respondents dated
14 December 1983 was a repudiation of the lease of the premises, it was retracted
or withdrawn before it was accepted by the appellant. The agreement to lease the
premises was still alive. Accordingly, in quitting the premises on 31 January
1984, the appellant committed an act of wrongful repudiation of the agreement
for a lease. The appellant was, thus, in breach of the agreement and the
respondent was entitled to an award of damages: at [62], [63] and [65].
(3) There were limitations to the rule that there ought to be a deduction for
income tax from any sum awarded to the injured party as damages. It applied
only if the sums for the loss of which damages were awarded constituted
compensation which would have been subject to tax, and the damages awarded
to the injured party would themselves not be subject to tax. Damages awarded in
lieu of rent were to be considered as “profits arising from property” and as such
were taxable under s 10(1)(f) of the Income Tax Act (Cap 134, 1992 Rev Ed).
Hence the second factor was not fulfilled, and there should be no deduction for
income tax: at [71], [72] and [73].
(4) Where the injured party had not done enough to find a tenant sooner, and
had restricted his advertisements to notices in the Singapore Medical
[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 611
Association’s journals rather than advertisements in the press to the general

public, damages would be reduced. In this case, three months was a reasonable
period for the injured party to relet the premises. Damages was correspondingly
reduced from $167,378 to $123,278: at [74], [75] and [76].
(5) Interest on damages under s 9 of the Civil Law Act (Cap 43, 1988 Rev Ed)
was subject to the trial judge’s discretion. The claim for interest was only added
by way of an amendment to the statement of claim when the trial judge heard
final submissions which were in written form. Further, the question of interest
was not addressed by either counsel. The trial judge could not be expected to
consider this issue on his own motion. In the circumstances, no interest ought to
be awarded: at [77] and [78].
Per Warren L H Khoo J (dissenting):

(1) Even if the parties have reached agreement on the essential terms of a
contract, if some other material terms have not been agreed, there was no
contract: at [85].
(2) Subletting was a material term. The appellant thought that the premises
were big for her needs, and that she would like to sublet part of them. She made a
point of it in her correspondence with the respondent. It was not settled in the
letter of 7 July 1983. There was a qualitative difference between an unfettered
right to sublet, and one subject to the consent of the landlord, even when it was
implied by law that the consent would not be unreasonably withheld: at [86],
[101], [109] and [110], and [116].
(3) The option to renew was a material term. It was not settled in the letter of
7 July 1983. The words “details of which will be incorporated in the lease” were
an integral part of the clause dealing with the subject of option to renew. To
disregard them and treat the clause as one providing for renewal on the same
terms as those of the existing lease was tantamount to rewriting the clause: at
[86], [115] and [116].
[Observation: Where details to be “incorporated in the lease” were not settled,
there was no uncertainty that would render the provisions that the phrase was
appended to void for uncertainty resulting in there being no concluded contract
if it was possible to give the clause a reasonable interpretation: at [43] and [44].]
Case(s) referred to
Bonnewell v Jenkins (1878) 8 Ch D 70 (refd)
Branca v Cobarro [1947] KB 854; [1947] 2 All ER 101 (refd)
British Transport Commission v Gourley [1956] AC 185; [1955] 3 All ER 796
(folld)
Brown v Gould [1972] Ch 53 (folld)
Chester v Buckingham Travel Ltd [1981] 1 WLR 96; [1981] 1 All ER 386 (folld)
Flexman v Corbett [1930] 1 Ch 672 (folld)
Harvey v Pratt [1965] 1 WLR 1025; [1965] 2 All ER 786 (refd)
Lewis v Stephenson (1898) 67 LJQB 296; 78 LT 165 (refd)
Quek Choon Huat v RM Seow [1979–1980] SLR(R) 828; [1980–1981] SLR 153
(distd)
Raja’s Commercial College v Gian Singh & Co Ltd [1974–1976] SLR(R) 225;
[1972–1974] SLR 268 (folld)
Teh Wan Sang & Sons Sdn Bhd v See Teow Chuan [1984] 1 MLJ 130 (refd)
Thomas Hussey v John Horne-Payne and G M Horne-Payne, his wife
(1879) 4 App Cas 311 (refd)
Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 (refd)
W J Rossiter, George Curtis v Daniel Miller (1878) 3 App Cas 1124 (refd)
Yeo Long Seng v Lucky Park (Pte) Ltd [1968–1970] SLR(R) 859; [1969–1971] SLR
447 (refd)
Legislation referred to
Civil Law Act (Cap 43, 1988 Rev Ed) s 9 (consd)
Income Tax Act (Cap 134, 1992 Rev Ed) s 10(1)(f) (consd)
Harry Elias and Yap Teong Liang (Harry Elias & Partners) for the appellant;
David Mitchell (Donaldson & Burkinshaw) for the respondent.
[Editorial note: This was an appeal from the decision of F A Chua J in the High
Court. See [1991] SGHC 163.]
23 April 1993 Judgment reserved.

M Karthigesu J (delivering the judgment of the majority):
1 This is an appeal from the judgment of F A Chua J giving judgment to
the respondents (“K T Chan Clinic”) for $167,378 and costs to be taxed
against the appellant (“Mrs Klerk”) for breach of an agreement for lease
contained in a letter dated 7 July 1983 in respect of units #05-33 to #05-37
situate at Tanglin Shopping Centre (“the premises”). By a respondents’
notice, K T Chan Clinic cross-appealed for interest on the judgment sum
pursuant to s 9 of the Civil Law Act (Cap 43, 1988 Ed) “for the pre-
judgment period at such rate as the court deems fit”. The judgment of
F A Chua J was given on 7 November 1991.
2 In January 1983 Mrs Klerk had two businesses, a beauty salon called
Institut Jeunesse et Beaute and a jewellery retail shop called La Margia
Jewellers (“the beauty salon” and “La Margia” respectively) both of which
she carried on at premises in the former Singapura Forum Hotel in Orchard
Road. She had been running these two businesses for the past 12 years. The
offices of these two businesses were at the former Ngee Ann Building in
Orchard Road from where her husband also ran his own family business.
3 In early 1983 it became known that both the Singapura Forum Hotel
and the Ngee Ann Building would be demolished soon for redevelopment.
Mrs Klerk started looking for new premises for her two businesses. She
found suitable premises at Centrepoint for the beauty salon and in June
1983 the beauty salon moved into those premises. She still needed premises
for La Margia and for the offices of her two businesses. Her husband too
needed premises for his own family business.
4 At about this time, that is to say about the end of June or early July
1983, Mrs Klerk saw an advertisement in The Straits Times of premises
being available at Tanglin Shopping Centre. She answered the
advertisement by calling the telephone number given in the advertisement.
It was answered by the manager of Perrodo Offshore (S) Pte Ltd
(“Perrodo”). An appointment was made for Mrs Klerk to view the premises.
5 Mrs Klerk, her husband and her son went to view Perrodo’s premises
which turned out to be the premises. She described her visit to the premises
and her subsequent meeting with Dr Chan in her evidence as follows:
My husband and I and my son went to the premises of Perrodo at
Tanglin Shopping Centre. We saw the manager who told us that he still
had a couple of months of his lease. He told me that the premises
belonged to Dr Chan.
We saw the premises and we thought we could use it. After discussing
with the manager, we came to an agreement about the rental of
$8,100 pm provided we could come to an agreement with Dr Chan.
The first time I met Dr Chan was in early July 1983; can’t remember
the date. My son was also present at this meeting. We told Dr Chan the
nature of our business, that we had at Singapura Forum and we told
him about our office at Ngee Ann Building. We told him that we had a
jewellery retail shop and an office in Ngee Ann Building and that we
would like to combine this. We told him that the premises of Dr Chan
was big and we would like to sublet part of it. Dr Chan said he had no
objection and that we could do whatever we liked. Then I asked
Dr Chan that I would like to sublet part of the premises and pay a
rental of $8,100 pm.
I told Dr Chan that we had to vacate Singapura Forum and Ngee Ann
Building.
The premises of Dr Chan was approximately 1,700sq ft.
Dr Chan did not agree to the rental of $8,100. I also told him that we
would like to have a lease of three years with a two-year option.
There was no deal that day.
6 According to the evidence of Mrs Klerk, she met Dr Chan again

another day, probably on the morning of 4 July 1983 when Dr Chan had
offered her a rental of $8,500 pm. She said she had to consult her husband
and had subsequently telephoned Dr Chan during the day on 4 July 1983
several times but could not get to speak with him. Eventually she had
managed to contact Dr Chan late at night on 4 July 1983 at his home and
had accepted Dr Chan’s offer of $8,500 pm which Dr Chan had
acknowledged by saying “OK”. This was followed by her letter dated 5 July
1983 to Dr Chan which her husband had drafted for her. The letter read as
follows:
Re: Units 05-33 – 05-37 Tanglin Shopping Centre
Further to our telephone conversation of yesterday evening, we hereby
confirm that we accept to rent the above premises as per conditions
verbally agreed, ie
(1) The total rental including maintenance is $8,500 per
month.
(2) The agreement will be for three years with a [sic] option
for two years, commencing 1 November 1983.
(3) A deposit of $8,500 in cash and a bank guarantee of
$17,000 is to be lodged with you.
(4) One months [sic] rental is to be paid in advance.
(5) Subletting is permitted if and when required.
We look forward to receiving your written confirmation of the above
and in due time a draft copy of the rental agreement.
7 Commenting on Mrs Klerk’s letter of 5 July 1983, Dr Chan said in

evidence:
I did not agree verbally to the said terms. These were in fact the terms
offered by the defendant (Mrs Klerk).
8 He then went on to say:

Two days after AB1 (Mrs Klerk’s letter of 5 July 1983) I wrote to the
defendant on 7 July, AB2. There was a discussion, a meeting, on the
morning of 7 July 1983, held in my office. It could have been over the
telephone. Difficult to remember, six years ago. I discussed certainly
with the defendant. The terms set out in AB2 were the terms agreed
with Mrs Klerk, the defendant. The terms cover the same ground as the
letter of 5 July 1983 from the defendant AB1, except the quantum of
rent payable is different. I added I would not pay agency fees as it was a
direct landlord/tenant arrangement.
9 Dr Chan’s letter to Mrs Klerk of 7 July 1983 written on a letterhead

which read “K T Chan Clinic” was as follows:
Dear Mrs Klerk
Units #05-33/37 Tanglin Shopping Centre
This is to confirm the terms of rental of the above premises as
discussed this morning:
(1) The rental will be $7,740 per month.
(2) Maintenance charge is to be paid separately and at the
moment, it is 80 cents per square foot and therefore comes to
$1,440, making a total sum payable each month of $9,180 per
month at present. Should there be any increase in maintenance

charges, this increase will be borne by the tenant.
(3) The lease will be for three years commencing 1 December
1983 with an option for renewal at the end of the period, details
of which will be incorporated in the lease.
(4) Rent is to be paid in advance and one month’s rental for
December 1983 is to be paid on 1 December 1983.
(5) A deposit of $9,180 is to be paid in cash immediately and a
bank guarantee for $18,360 is to be lodged with me in due
course.
(6) Subletting will be permitted, details of which will be in the
lease.
(7) The lease will be legally drawn up with the usual terms
that apply in Singapore and the tenant will be responsible for the
cost of the lease.
(8) I will not be responsible for any agent’s fees payable.
If you agree to these terms, please sign the attached copy and return it.
On receipt of your confirmation, I shall authorize Perrodo Offshore
(Singapore) Pte Ltd in writing to sublet the premises, of which they are
the present legal tenants, to you at a mutually convenient time.
Yours faithfully
(signed)
KT Chan
10 Mrs Klerk said in her evidence that she was surprised when she
received Dr Chan’s letter of 7 July 1983, since “the amount of the rental was
entirely different”. She also said that she tried to telephone Dr Chan but
could not get him. She then received a letter from Dr Chan dated 8 July
1983 which read as follows:
I refer to my letter of offer of 7 July 1983 regarding the above premises.
The offer is good only up to 8 July 1983 after which it will no longer
hold for reasons that I have indicated to you in our discussions.
11 Apparently there were other people interested in the premises but

Mrs Klerk said in her evidence that she regarded this letter as “a pressure
letter”, and so she had accepted the terms, wrote out a cheque for $9,180
and signed the letter of 7 July 1983 accepting the terms contained therein.
12 In fact the letter of 7 July 1983 was signed by her husband but there is
no dispute that he signed it on behalf of Mrs Klerk. There is also no dispute
that the letter of 7 July 1983 was returned to Dr Chan on 8 July 1983
together with a cheque for $9,180.
13 Dr Chan duly authorised Perrodo that they could sublet the premises
to Mrs Klerk for the remainder of their lease with Dr Chan, that is, to
30 November 1983. Accordingly Mrs Klerk moved into the premises as the
subtenant of Perrodo at the end of July or the beginning of August 1983 and
began decorating the premises by installing show cases, spot lights, alarm
system, carpets and a safe, which she maintained in her evidence was
consistent “with setting up of a retail jewellery shop”.
14 However, she admitted that the nameplates to be exhibited at the
premises were: “La Margia Jewellers (wholesale office) and Institut Jeunesse
et Beaute (Registered office)”. She explained this by saying: “We wanted to
give publicity that we sell jewellery at wholesale prices.”
15 Mrs Klerk also said in her evidence:
Because I told Dr Chan at the first meeting that the main purpose was
to have the jewellery shop and the office of jewellery shop combined in
one roof and there was no objection; he said you could do whatever
you liked. He said the lease would be sent to us and so it was not
necessary to mention it in my letter of AB1 (Mrs Klerk’s letter of 5 July
1983). AB1 did not contain all the terms agreed.
AB2 and AB3 (Dr Chan’s letter of 7 July 1983) did not contain all the
terms agreed upon. There was no doubt about it that there was to be a
lease which would contain all the terms agreed upon.
Until the lease was signed there was no binding agreement between us.
16 On the question of a formal lease being drawn up and signed between
the parties, Dr Chan’s evidence was that he regarded the return of a copy of
his letter of 7 July 1983 duly signed as very important to him. He explained
the paragraph numbered 7 of that letter as follows:
I just wished this agreement to be formalized in the usual agreement
between landlord and tenant, the usual tenancy agreement so that it
will cover things like access to the premises, maintenance, not keeping
certain things on the premises like flammable things.
17 In cross-examination he said:
All the major items of the lease had been agreed and I left it to my
lawyers to put in the details like rights of entry, etc. If any other details
were not agreed it was up to my lawyers and Mrs Klerk’s lawyers to
work out. If the solicitors could not agree the matter could be referred
to me and Mrs Klerk. We would not conduct further negotiations; we
would clarify and instruct our solicitors. Because we were already
agreed on the major points.
18 Before considering as a matter of law whether the signed acceptance
by Mrs Klerk (ie signed by her husband on her behalf) of Dr Chan’s letter of
7 July 1983 constituted a valid and binding tenancy agreement of the
premises notwithstanding the provision it contained that “a lease will be
legally drawn up with the usual terms that apply in Singapore”, as was
Dr Chan’s case, it is desirable to complete the narration of facts as they

bring to light the several defences relied on by Mrs Klerk.
19 A formal lease was not in fact executed by the parties but one was
prepared by Dr Chan’s solicitors and sent to Mrs Klerk on 13 September
1983. It was between K T Chan Clinic described as “the landlord” and
Institut Jeunesse et Beaute, that is the beauty salon, of which Mrs Klerk was
the sole proprietress, described as “the tenant”. Mrs Klerk had indicated
earlier to Dr Chan that she wished to have the formal lease of the premises
in the name of Institut Jeunesse et Beaute.
20 The formal lease incorporated the agreed terms as stated in Dr Chan’s

letter of 7 July 1983, provided the details of subletting and the option to
renew, and included what, for convenience may be referred to as the usual
tenants and landlords covenants as well as the usual mutual covenants,
which in our view are commonplace in any lease of demised premises in
Singapore. It is necessary to mention three of these clauses, namely:
3(17) Not to assign sublet or part with or share possession of the
demised premises or any part thereof for all or any part of the said term
without first obtaining the written consent of the landlord.
3(21) To use or occupy the demised premises solely and exclusively as

an office for the tenant’s business.
5(5) If the tenant shall after the expiration of the term herein be
desirous of taking a new tenancy of the demised premises for a further
term of one (1) year and gives to the landlord not less than three
(3) months’ notice in writing to that effect before the expiration of the
term herein then the landlord will at or before the expiration of the
term hereby granted and if there shall then be no subsisting breach of
any of the tenant’s obligations under the present tenancy at the cost of
the tenant grant to the tenant a new tenancy of the demised premises
for the said further term of one (1) year to commence from and after
the expiration of the term hereby granted at a monthly rental and
monthly maintenance fee to be mutually agreed upon by the parties
hereto and with and subject to the same covenants and conditions as in
this present tenancy reserved and contained (this present covenant for
renewal excepted). If no such notice in writing shall have been given by
the tenant as aforesaid then and in such an event the tenant shall at the
expiration of the term herein yield up and surrender the demised
premises to the landlord.
21 Mrs Klerk’s reaction on receipt of the formal lease was stated by her in
evidence as follows:
When I looked through the agreement I noticed that the premises was
only to be used as an office; subletting not permitted unless I got
written agreement from Dr Chan. These were inconsistent with the
agreement I reached with Dr Chan.
I met Dr Chan on 7 November 1983. We discussed about the jewellery

business not included in the lease and I asked for a diplomatic clause
because I am a permanent resident but my husband was on year to
year. This was the first time I brought up the diplomatic clause. In our
case a diplomatic clause would be a normal clause to be inserted in the
lease. Dr Chan did not agree to the diplomatic clause. He also did not
agree to my doing retailing business.
I was not in the position to sign the agreement.
22 Dr Chan recalled his meeting with Mrs Klerk on 7 November 1983 in

these terms:
Around this time there was discussion with the defendant about her
retail business on the premises and also the incorporation of the
‘diplomatic clause’ in the tenancy agreement. These two new terms or
requests, were certainly not made in July 1983, not raised in July 1983,
but months later.
Regarding the retailing I told the defendant that it was not within my
authority to say whether she could or could not do it, only the relevant
authorities can approve what she wanted to do.
Regarding the diplomatic clause, I told the defendant that my feeling is
that the landlord cannot guarantee their business outcome, the
business outcome of the company, but I shall consult my lawyers
regarding the matter.
23 Having consulted his solicitors, Dr Chan was prepared to

accommodate Mrs Klerk on the retailing aspect within his limits but would
not agree to the inclusion of a diplomatic clause. Accordingly, cl 3(21) was
amended to read as follows:
To use the demise [sic] premises as an office for the tenant’s business
provided always that such user shall not infringe the Building Control
Division rules and regulations.
24 Mrs Klerk, now through her solicitors, took the stand that she was still
unable to execute the formal lease as her business entailed a substantial
amount of retailing and that cl 3(21) as it stood now did not provide for this
specifically. Further she contended that the omission of a diplomatic clause
was unacceptable to her. The upshot of all this was that by a letter dated
28 November 1983 Dr Chan explained to Mrs Klerk why he could not agree
to the diplomatic clause and why he could not further accommodate
Mrs Klerk on the retailing aspect and concluded his letter with this
paragraph:
If the lease is not signed by 1 December 1983, the December’s rental
paid and other provisions of the lease observed, I would consider that I
am free to find new tenants and that I have no further obligations to
you.
25 There was no reaction from Mrs Klerk. Accordingly Dr Chan’s

solicitors addressed a letter to Mrs Klerk’s solicitors dated 14 December
1983 in which they said:
It appears that your clients are no longer interested in taking up the
tenancy of the above premises. That being so, kindly request them to
vacate the above premises in the course of this week.
26 There was still no reaction from Mrs Klerk or her solicitors although
in her evidence she did say that when she received a copy of the letter dated
14 December 1983 from her solicitors she started to pack up her things and
made arrangements to move but it was “impossible to vacate in three days’
time”. The letter of 14 December 1983 was followed up by a letter dated
27 December 1983 from Dr Chan’s solicitors to Mrs Klerk’s solicitors. It
read as follows:
We have been instructed that your clients are still on the above
premises and have not vacated the same. Your clients entered into an
agreement for the leasing of the above premises on 7 July 1983. Under
the said agreement all the terms were agreed to by our client and your
clients and the consideration therein mentioned was also paid to our
client.
We enclose herewith a copy of the said agreement for your perusal.
Our client now seeks specific performance of the said agreement and the
request to your clients to leave which has not been accepted is hereby
countermanded.
[emphasis added]
27 To this letter Mrs Klerk replied through her solicitors on 10 January

1984. In her evidence she said that the letter of 10 January 1984 sets out her
position. The relevant extracts from her solicitors’ letter of 10 January 1984
to Dr Chan’s solicitors are the following:
… it seems clear that your client regarded the position as at an end. We
do not think that your client is entitled to claim the relief of any
agreement in view of these circumstances.
… we do not agree that any agreement was entered into. We have
advised our clients that their position is on a month to month basis and
that your client is not entitled to any specific performance[.]
… our clients will quit and render vacant possession of the premises on
31 January 1984[.]
28 Having paid the agreed sum of $9,180 ($7,740 for rent and $1,440 for
maintenance charges) per month for the month of January 1984 on
13 January 1984, Mrs Klerk duly vacated and surrendered possession of the
premises to K T Chan Clinic on 31 January 1984.
29 Eventually Dr Chan rented the premises to Blitz Advertising Pte Ltd
for a period of 24 months commencing from 9 November 1984 at $6,300
per month made up as to $2,450 for rent, $2,770 for hire of furniture and
fittings and $1,080 for maintenance charges and commenced proceedings
for damages for breach of the tenancy agreement evidenced by or contained
in the letter dated 7 July 1983.
30 The gravamen of the argument of Mrs Klerk’s counsel, Mr Elias, was
that Mrs Klerk went into possession of the premises as subtenant of
Perrodo; no tenancy agreement was concluded between Mrs Klerk and
Dr Chan in respect of the premises; when Perrodo’s tenancy with Dr Chan
of the premises expired on 30 November 1983 and they surrendered
possession to Dr Chan Mrs Klerk continued in occupation thereafter as a
monthly tenant of K T Chan Clinic.
31 This, with respect to Mr Elias, is an oversimplification of the factual
and the legal position. The facts which we have set out above clearly show
that in early 1983 Mrs Klerk was desperately looking for premises for her
two businesses which she had at Singapura Forum Hotel and for the offices
of these two businesses which were in Ngee Ann Building where her
husband also had his office for his own family business. She knew that both
Singapura Forum Hotel and Ngee Ann Building were to be demolished
soon. She had already found premises, in June 1983 for her beauty salon
business, Institut Jeunesse et Beaute, at Centrepoint. She required premises
for her jewellery business, La Margia, and for the offices of her two
businesses as well as an office for her husband’s family business. It was in
this factual situation, that having seen the Perrodo advertisement in June or
July 1983, that she came to know of the premises. Her own evidence was
that she first discussed with the manager of Perrodo who told her that
Perrodo still had two months of its tenancy of the premises to run and that
the premises belonged to Dr Chan. She then agreed with the manager of
Perrodo a rental of $8,100 per month “provided we could come to an
agreement with Dr Chan”.
32 In our judgment this can only mean that the manager of Perrodo was
prepared to sublet the premises to Mrs Klerk at $8,100 per month for the
remainder of Perrodo’s lease of the premises provided the consent of
Dr Chan could be obtained for Perrodo to sublet the premises to Mrs Klerk.
33 Mrs Klerk then saw Dr Chan. In her own words “there was no deal”
the first time she met Dr Chan to discuss about the premises. It is
significant, however, that at this first meeting with Dr Chan she told him,
amongst other things, that she “would like to sublet part of the premises
and pay a rental of $8,100 p.m.” and that “we would like to have a lease of
three years with two-year option”. We have no doubt that what Mrs Klerk
meant was that she was asking for Dr Chan’s consent to sublet the premises
or part thereof from Perrodo for $8,100 per month for so long as Perrodo
were the legal tenants of the premises and thereafter to rent the premises
from Dr Chan for a period of three years with an option of renewal for a
further period of two years.
34 This becomes abundantly clear from her letter of 5 July 1983 to

Dr Chan where she speaks of renting the premises at $8,500 per month,
inclusive of maintenance charges, for a period of three years with an option
for two years. It seems clear to us that Mrs Klerk’s discussions with
Dr Chan after that first meeting with him were with a view to securing for
herself a tenancy or lease of the premises for a fixed term of years with an
option for renewal for another fixed term of years.
35 It is most significant that not until an agreement had been concluded
between Mrs Klerk and Dr Chan as contained in Dr Chan’s letter of 7 July
1983 did Dr Chan consent to Perrodo’s subletting of the premises to
Mrs Klerk. It is worth noting the terms of Dr Chan’s letter to Perrodo dated
7 July 1983. It reads:
As you know, Mrs Louise Klerk has been negotiating with me to rent
the above premises from you as a subtenant for the rest of our lease,
that is, up to 30 November 1983.
We have concluded our negotiations satisfactorily and a new lease will
be signed soon for the tenancy effective from 1 December 1983.
In the meanwhile, this is to authorize you to proceed with the
subletting and afford Mrs Klerk whatever access to the premises that is
agreed mutually.
36 The factual position, then, is that Dr Chan consented to Perrodo

subletting the premises to Mrs Klerk because, and only because, an
agreement had been concluded between him and Mrs Klerk for a lease of
the premises as contained in the letter of 7 July 1983. It is not strictly correct
to say, as Mr Elias did say to us, that Mrs Klerk occupied the premises as a
subtenant of Perrodo and only as a subtenant of Perrodo and that the
agreement contained in the letter of 7 July 1983 has no bearing at all on
Perrodo’s subletting to Mrs Klerk.
37 We must next consider whether the letter of 7 July 1983 constitutes a
legally binding tenancy agreement or lease of the premises.
38 A variety of arguments and submissions were made both before the
learned trial judge and us. None of them found favour with the learned
judge. None of them were abandoned before us although not all of them
were pressed with equal fervour.
39 An issue was made of the fact that the parties to the agreement or the
lease were not clearly identified. It was submitted that Dr Chan’s letter of
7 July 1983 was written on the letterhead of “K T Chan Clinic” and not
“K T Chan Clinic Pte Ltd” and further that Dr Chan had to request from
Mrs Klerk the official name and address of the tenant to appear in the
formal lease. This submission in our view is devoid of all substance or
merit. The fact of the matter is and it was well known to Mrs Klerk, which
cannot be denied, that Dr Chan was at all times negotiating on behalf of the
landlord or owner of the premises and likewise Mrs Klerk was negotiating
on behalf of the tenant, whether it be on her personal behalf, or on behalf of
Institut Jeunesse de Beaute, her beauty salon business of which she was the
sole proprietress, or La Margia, her jewellery business of which she was also
the sole proprietress.
40 It was submitted before us that in three respects the terms as
contained in the letter of 7 July 1983 and the formal lease were in conflict.
Hence a concluded agreement had not been reached by the terms contained
in the letter of 7 July 1983. The three matters instanced are (a) the option to
renew; (b) the provision for subletting; and (c) the use of the expression
“the usual terms” in cl 7 of the letter of 7 July 1983.
41 We find that an agreement had been reached that at the end of the
three-year period of the lease commencing 1 December 1983 there would
be an option for renewal. An option to renew a lease unless delimited as to
the period and to the terms on which the lease will be renewed is an option
to take a further lease for the same period and on the same terms as the
original lease except perhaps the right of a further option to renew (see
Lewis v Stephenson (1898) 67 LJQB 296; 78 LT 165). Admittedly cl 3 of the
letter of 7 July 1983 did not specify the period of the renewal. Mrs Klerk at
her first meeting with Dr Chan had asked for a two-year period of renewal.
Mrs Klerk admitted no agreement had been reached at that first meeting.
Next, she wrote to Dr Chan on 5 July 1983 supposedly in the belief that an
agreement had been concluded the previous evening for a three-year lease
“with an option for two years commencing 1 November 1983”. Dr Chan
did not agree that any agreement had been reached as contended by
Mrs Klerk and said so in his evidence. The evidence does not suggest that
Dr Chan was not amenable to an option to renew. The learned judge found,
and we agree with him, that Dr Chan was amenable to an option clause but
was not prepared to grant an option for renewal for two years and had
wanted to consult his solicitors. That was why cl 3 of his letter of 7 July 1983
had read “… with an option for renewal at the end of the period, details of
which will be incorporated in the lease”. The formal lease had provided for
an option to renew for one year. We agree with the learned judge’s
conclusion, “that the term of the option clause was never a matter in
dispute”. Quite obviously “the details” referred to by Dr Chan in cl 3 refer
to the procedures for the exercise of the option.
42 The next contention is that cl 6 of the letter of 7 July 1983 stated that
“subletting will be permitted, details of which will be in the lease” whereas
cl 3(17) of the formal lease provided that the written consent of the landlord
was necessary for subletting. The learned judge made short shrift of this
contention saying that it was frivolous. We fail to see what the conflict is.
Subletting is not prohibited by cl 3(17) of the formal lease. Subletting is
permitted under both cl 6 of the letter of 7 July 1983 and cl 3(17) of the
formal lease but with the formality of first obtaining the written consent of
the landlord. That surely is the detail referred to in cl 6 of the letter of 7 July
1983.
43 In any event we must observe that Dr Chan, on behalf of the owner of
the premises and Mrs Klerk either on her own behalf or for one or the other
of her businesses of which she was the sole proprietress had reached
agreement, both on the question of the option for renewal and on the
question of subletting. What had not been agreed were the details which
were to be “incorporated in the lease”. It cannot be said, as was said by
Mr Elias, counsel for Mrs Klerk, that no agreement had been reached on
these two matters. In our view what seems to be the position taken by
Mr Elias, correctly stated, is that agreement was reached but since the
details had not then been agreed there was uncertainty which would render
these two provisions void for uncertainty resulting in there being no
concluded contract.
44 In Brown v Gould [1972] Ch 53 at 56–58, Megarry J stated the basic
principles applicable in cases of uncertainty. He said:
In an unreported case, In Re Lloyd’s Trust Instruments, June 24, 1970,
to which I referred counsel, I endeavoured to state the basic principles
applicable in cases of uncertainty. What I said there was:
I think the starting point on any question of uncertainty must be
that of the court’s reluctance to hold an instrument void for
uncertainty. Lord Hardwicke LC once said “A court never
construes a devise void, unless it is so absolutely dark, that they
cannot find out the testator’s meaning”: Minshull v Minshull
(1737) 1 Atk 411 at p 412. Lord Brougham said: “The difficulty
must be so great that it amounts to an impossibility, the doubt so
grave that there is not even an inclination of the scales one way”:
Doe d Winter v Perratt (1843) 9 Cl & Fin 606 at p 689. In a well-
known statement, Sir George Jessel MR said that the court
would not hold a will void for uncertainty “… unless it is utterly
impossible to put a meaning upon it. The duty of the court is to
put a fair meaning on the terms used, and not, as was said in one
case, to repose on the easy pillow of saying that the whole is void
for uncertainty”: In Re Roberts, Repington v Roberts-Gawen
(1881) 19 Ch D 520 at p 529. That this is not a doctrine confined
to wills but is one which applies to other instruments, such as
planning permissions, is shown by cases such as Fawcett
Properties Ltd v Buckingham County Council [1961] AC 636;
[1960] 3 All ER 503 where, by a majority, the delphic language of
a condition in a planning permission escaped from being held
void for uncertainty largely because of its resemblance to a
section to be found in a modern Act of Parliament. The second
question is that of the types of uncertainty. The basic type (and
on one view the only true type) is uncertainty of concept, as
contrasted with mere difficulty of application: see, for example,
In Re Gape’s Will Trusts, Verey v Gape [1952] Ch 418, affirmed

at p 743; [1952] 2 All ER 579, where the question was one of a
condition subsequent, in which special considerations apply. In
Fawcett’s case [1961] AC 636 at p 670; [1960] 3 All ER 503 at
p 513, Lord Keith of Avonholm said: “The point is one of
uncertainty of concept. If it is impossible, on construction of the
condition, to reach a conclusion as to what was in the
draftsman’s mind, the condition is meaningless and must be
read as pro non scripto.” Putting it another way, the question is
one of linguistic or semantic uncertainty, and not of difficulty of
ascertainment: see In re Baden’s Deed Trusts [1971] AC 424 at
p 457; [1970] 2 All ER 228 at p 247, per Lord Wilberforce. If
there is a trust for “my old friends”, all concerned are faced with
uncertainty as to the concept or idea enshrined in these words. It
may not be difficult to resolve that “old” means not “aged” but
“of long standing”; but then there is the question how long is
“long”. Friendship, too, is a concept with almost infinite shades
of meaning. Where the concept is uncertain, the gift is void.
Where the concept is certain, then mere difficulty in tracing and
discovering those who are entitled normally does not invalidate
the gift.
To the authorities mentioned in that passage must now be added
Greater London Council v Connolly [1970] 2 QB 100; [1970] 1 All
ER 870, a landlord and tenant case concerning a condition on the rent
card of a council tenant. This condition provided that the rent and
other sums shown on the rent card ‘are liable to be increased or
decreased on notice being given’; and the Court of Appeal
unanimously held that the condition was not void for uncertainty.
Lord Denning MR said, at p 108:
The courts are always loath to hold a condition bad for
uncertainty. They will give it a reasonable interpretation
whenever possible. It is possible here.
Lord Pearson said, at p 110:
As my Lord has said, the courts are always loath to hold a clause
invalid for uncertainty if a reasonable meaning can be given to it,
and it seems to me easy to give a reasonable meaning to this
condition.
Sir Gordon Willmer agreed. No doubt there may be cases in which the
draftsman’s ineptitude will succeed in defeating the court’s efforts to
find a meaning for the provision in question; but only if the court is
driven to it will it be held that a provision is void for uncertainty.
45 Applying these principles to the instant case we are of the view that a
court would give effect to both these provisions, ie cll 3 and 6 of the letter of
7 July 1983. Accordingly we have no hesitation in coming to the conclusion
that the acceptance by Mrs Klerk of Dr Chan’s letter of 7 July 1983
constituted in law a concluded and enforceable contract.
46 This leaves the third contention which revolves around the use of the
expression “the usual terms” in cl 7 of the letter of 7 July 1983 which reads –
“the lease will be legally drawn up with the usual terms that apply in
Singapore”. The questions asked rhetorically by Mr Elias were – is cl 3(21)
of the formal lease restricting the user of the premises solely and exclusively
as an office, a usual term in a lease in Singapore? Is a “diplomatic clause”
not a usual term to be incorporated in a lease in Singapore? The submission
is that since no agreement was reached and embodied in the letter of 7 July
1983 on these two matters it did not constitute a valid and binding
agreement. It did not contain all the terms of the lease. In other words the
letter of 7 July 1983 was not a concluded agreement since there were still
outstanding matters to be agreed upon. It was submitted that the use of the
expression “usual terms” clearly indicates ongoing negotiations.
47 We were referred to Flexman v Corbett [1930] 1 Ch 672 and Chester v
Buckingham Travel Ltd [1981] 1 WLR 96; [1981] 1 All ER 386. The former
case, inter alia, decided “that the question whether covenants in a lease are
‘usual covenants’ is in each case a question of fact for the Court to decide
upon the evidence” (see headnote, held (i)). The latter case held (see
headnote, held (2)):
That, in addition to the five well-known ‘usual’ covenants in a lease,
namely, covenants by the tenant (i) to pay rent, (ii) to pay taxes, except
such as were expressly payable by the landlord, (iii) to keep and deliver
up the premises in repair, (iv) to allow the lessor to enter and view the
state of repair, and (v) a covenant by the lessor for quiet enjoyment, it
was a question of fact to be determined by the court as to what
covenants were usually to be found in a lease …
48 Essentially, then, this contention has to be decided on the facts.
49 In so far as the “diplomatic clause” is concerned it is clear beyond
doubt from the evidence that it was never raised at any time before 7 July
1983. Quite patently it was an afterthought on the part of Mrs Klerk.
Furthermore no evidence was led to show that a “diplomatic clause” is a
usual clause in a tenancy or lease of commercial premises. The premises
undoubtedly are commercial premises.
50 We entirely agree with the manner in which the learned judge dealt
with the evidence on the question of the user of the premises and with the
conclusions he reached. We can do no better than to quote from his
judgment. He said:
The defendant [Mrs Klerk] was unable to give a satisfactory
explanation on her failure to include in her very first letter dated 5 July
1983 (AB1) to Dr Chan specific reference to the use of the said
premises for the retailing of jewellery. She regarded the said premises
for retailing as ‘fundamental’. If that is true, it is rather odd that she
omitted it in AB1. It is highly improbable that Dr Chan would have
told her that she could do whatever she liked as regards the use of the
said premises [the premises] and would have told her that there was no
necessity for its inclusion in AB1. When the tenancy agreement AB19
[the formal lease] was sent to her, she made no protest or raised any
objection with regard to the user clause that the said premises were to
be used or occupied solely and exclusively as an office for her business.
Instead of which she went to see Dr Chan on 7 November 1983, and on
the same day wrote the letter AB39 requesting for the inclusion in the
user clause that she could use part of the said premises for retail
purposes and for the inclusion of a so-called diplomatic clause. The
tone of this letter does not support the assertion of the defendant that
an earlier agreement had been reached with regard to the use of the
said premises for retailing of jewellery. Although the defendant in her
evidence described retailing as ‘fundamental’, AB39 does not support
this assertion. In her evidence the defendant said that the main
purpose of renting the said premises was for the retailing of jewellery.
Paragraph 1 of AB39 where she stated ‘although the premises will be
used mainly as office, our business requires that we can use part of the
area for retailing purposes’ contradicts her evidence.
The evidence is that the retail business of La Margia Jewellers was
carried on at the beauty salon at Singapura Forum. These two
businesses had been carried on together for almost 12 years. In early
January 1983, the defendant obtained premises at Centrepoint for her
beauty salon to which she moved in June 1983. The natural thing that
would take place would be that the retail business would follow the
beauty salon to Centrepoint.
The Ngee Ann premises were purely an office: the registered office of
the beauty salon and the office of La Margia Jewellers.
The said premises were required for a business office which was
previously conducted at the Ngee Ann premises. It is very unlikely that
during the discussion, the defendant informed Dr Chan that she
required the said premises to carry on retail business in jewellery. Even
the nameplates which she had put up on the doors of the said premises
were that the said premises were the registered office of the beauty
salon and the ‘wholesale office’ of La Margia Jewellers. The defendant’s
contention that ‘wholesale office’ was to inform the public that
jewelleries were being retailed there at wholesale prices is
unconvincing.
Dr Chan was quite adamant that during the negotiations the defendant
did not tell him that she intended to retail jewellery in the said
premises. He said that there was a discussion between the parties on
the morning of 7 July 1983, as he had not agreed to the terms set out in
the defendant’s letter AB1 of 5 July 1983. The terms in AB1 were in fact
the terms offered by the defendant. After the discussion on 7 July 1983,
the agreed terms were set out in AB2. The defendant denied that there
was a discussion on 7 July 1983. I accept the evidence of Dr Chan that
soon after the terms were agreed, on 7 July 1983, he dictated and had
typed AB2 and that same day wrote to Perrodo (AB4) informing the
latter that negotiations with the defendant had been concluded
satisfactorily and that a new lease would be signed soon for the tenancy
effective from 1 December 1983, and in the meanwhile Perrodo was
authorized to proceed with the subletting to the defendant. AB4 was
sent to Perrodo as soon as Dr Chan received the confirmation letter of
the defendant and her cheque.
I find that there was no discussion between the defendant and Dr Chan
pertaining to the use of the said premises for the retailing of jewellery. I
reject the contention of the defendant that the retailing of jewellery in
the said premises was a term agreed upon by Dr Chan during the
discussion and which was excluded in AB2.
51 The facts which we had discussed above clearly show that Dr Chan’s
offer as contained in his letter of 7 July 1983 was unequivocally and
unconditionally accepted by Mrs Klerk on 8 July 1983 by the signed
acceptance thereof by her husband on her behalf and by the payment of the
deposit of $9,180 which was payable “immediately”. The letter of 7 July
1983 clearly defined the property, the length of the term, the rent and the
date of commencement of the lease. As for the parties, Mrs Klerk knew fully
well before 7 July 1983 who the landlords of the premises were and that
Dr Chan represented the landlords in the negotiations. Similarly, Mrs Klerk
had made it known from the beginning that she was negotiating on behalf
of her two businesses, Institut Jeunesse et Beaute and La Margia. It is not
denied that she is the sole proprietress of both businesses. In fact Dr Chan’s
letter of 7 July 1983 was addressed to Mrs Klerk at Institut Jeunesse et
Beaute. As we have already said, this point is without substance or merit.
Accordingly all the essential terms for a valid agreement for a lease being
either clearly defined in the letter of 7 July 1983 or there being no mistaking
what they are, the letter of 7 July 1983 and the signed acceptance thereof
constituted a valid agreement for a lease of the premises. See Harvey v Pratt
[1965] 1 WLR 1025; [1965] 2 All ER 786.
52 Dr Chan’s evidence was that “all major items of the lease had been
agreed” and that the negotiations were concluded. That was accepted by the
learned judge. It seems to us that the letter of 7 July 1983 spelled out all the
essential terms of an agreement for a lease in respect of which Dr Chan had
been negotiating with Mrs Klerk and when that letter was accepted in its
entirety and the deposit was paid both of them had reached a firm
agreement on those terms. In our judgment there were no ongoing
negotiations. We have already dealt with the questions relating to the
subletting and the so-called “diplomatic clause”. Even the user of the
premises cannot, in our view, be seen as an ongoing negotiation. All that
Dr Chan was endeavouring to do by the new cl 3(21) of the formal lease by
adding the proviso was simply to accommodate Mrs Klerk without
compromising himself.
53 We must next consider whether the parties contemplated the

execution of a formal agreement before they considered themselves bound
by the letter of 7 July 1983. We can find nothing in the evidence leading to
the signed acceptance of Dr Chan’s letter of 7 July 1983 to suggest that the
parties intended that whatever agreement was reached between them as to
the terms of a lease to commence on the expiry of Perrodo’s lease, would
not be binding until and unless a formal lease was executed by them. In fact
the totality of the evidence suggests the contrary.
54 The clear terms of the letter, the surrounding circumstances in which
the letter was written by Dr Chan and accepted on behalf of Mrs Klerk and
the payment by Mrs Klerk of the deposit of $9,180 pursuant to those terms,
all indicated unmistakably the intention of Dr Chan and Mrs Klerk that
that document was to constitute a binding agreement between them for the
lease of the premises to Mrs Klerk on those terms, pending the finalisation
and execution of a formal lease which was to be drafted by Dr Chan’s
solicitors and approved by Mrs Klerk’s solicitors. We are unable to read
into the words – “we look forward to receiving your written confirmation of
the above and in due time a draft copy of the rental agreement” used by
Mrs Klerk in her letter to Dr Chan of 5 July 1983 or into the words of cl 7 of
the letter dated 7 July 1983 that the “lease will be legally drawn up with the
usual terms that apply in Singapore” the legal import which has been given
to such words as “subject to contract” or “subject to the preparation of a
formal contract”.
55 We were referred to a number of cases on this point. Indeed there are
cases to be found for and against the proposition. Ultimately it is a question
of interpreting the conduct of the parties and the words used by them in
correspondence. As a matter of principle, however, an agreement to execute
a formal agreement does not prevent there being a valid and concluded
agreement in the meanwhile. See the cases of Bonnewell v Jenkins
(1878) 8 Ch D 70; Branca v Cobarro [1947] KB 854; [1947] 2 All ER 101;
and Yeo Long Seng v Lucky Park (Pte) Ltd [1968–1970] SLR(R) 859 cited by
the learned judge.
56 We would nevertheless refer to the Court of Appeal’s decision of
Quek Choon Huat v RM Seow [1979–1980] SLR(R) 828 which we think is
particularly instructive. In this case the question was whether an exchange
of three letters constituted a valid agreement or whether the three letters
should be regarded as the intended basis for a future contract. The three
letters read as follows:
(a) The purchaser’s solicitor’s letter dated 6 June 1979. It read:
Re: Apt 3, Fernhill Apartment
We act for Mdm Rauni Marjatta Seow, who instructs us that she wishes
to purchase the above property, subject to title being in order, at a price
of $140,000.
We are informed that you act for Mr Gary Quek, the owner of the
above property.
If you are similarly instructed, please let us have the title deeds and the
agreement for sale and purchase for our necessary action.
(b) The purchaser’s solicitors wrote again on 27 June 1979. It read:

We write to confirm the tele-conversation between yourself and our
Miss Alkaff this afternoon, whereby you informed us that you have
been instructed to proceed with the sale of the above property to our
client.
Pending the signing of the sale agreement, we are instructed to forward
herewith a cheque for the sum of $14,000 being the 10% deposit, to be
held by you as stakeholders.
Kindly acknowledge receipt.
(c) The vendor’s solicitor replied on 9 July 1979 as follows:

We are in receipt of your letter of the 27th ultimo and the enclosure.
We have written to the existing mortgagees for the title deeds and shall
forward you the same upon receipt.
Meanwhile we forward herewith agreement for sale in duplicate for
your client’s signature and return to us.
Kindly confirm your client is a Singapore citizen.
57 Wee Chong Jin CJ, delivering the judgment of the court, said at [9]:
In our opinion that letter is not, as said on behalf of the respondents
[the purchaser], a recognition or affirmation that the parties have
earlier come to an agreement on the sale of the property on open
contract terms. In our view, the penultimate sentence which referred to
the ‘Agreement for Sale in duplicate’ enclosed with that letter is a clear
indication that up to that stage the appellant had contemplated and
intended that the bargain would be struck in the usual manner by the
parties signing and exchanging an agreed agreement for sale and
purchase prepared by solicitors.
58 Given that in the sale and purchase of land it is usual for an agreement
for sale and purchase prepared by solicitors to be signed before the
purchaser and the vendor are legally bound to the transaction, Quek Choon
Huat’s case ([56] supra) clearly evinced an intention in the correspondence
exchanged that the formal agreement for sale and purchase would be signed
in order to conclude the contract as the Court of Appeal decided. The same
cannot be said of the instant case. The intention of Dr Chan and Mrs Klerk
clearly evinced in their respective letters of 5 and 7 July 1983 was to
conclude the agreement for the lease of the premises by getting written
confirmation of acceptance and then to go through the formality of signing
the lease.
59 Accordingly we conclude that Dr Chan’s letter to Mrs Klerk dated

7 July 1983 upon its signed acceptance by Mrs Klerk through her husband
on 8 July 1983 constituted a valid and binding agreement for the lease of the
premises to her upon the terms stated therein.
60 The remaining defences taken by Mrs Klerk can be disposed of quite

shortly. The first of these was that if there was a valid and binding
agreement for a lease by the signed acceptance of Dr Chan’s letter of 7 July
1983, then such agreement only created a monthly tenancy which was
lawfully and duly terminated by Mrs Klerk’s solicitors’ letter dated
10 January 1984 to Dr Chan’s solicitors. We do not understand this
argument at all. If there was a valid and binding tenancy, and we have found
that there was one, it was for a period of three years from 1 December 1983.
Mrs Klerk’s occupation of the premises until 30 November 1983 was as a
subtenant of Perrodo, which as the learned judge found, and we agree with
him, was not a month to month tenancy but a subtenancy for the remainder
of the Perrodo’s lease from 1 August 1983 to 30 November 1983. How can it
be said in these circumstances that on the expiry of the subtenancy from
Perrodo on 30 November 1983, Mrs Klerk’s occupation of the premises
thereafter was on a monthly tenancy from K T Chan Clinic, the owners and
landlords of the premises?
61 Although this is how the argument was put it seems that this is not
what was meant. A perusal of Mrs Klerk’s solicitors’ letter of 10 January
1984, the relevant extracts of which we have set out earlier in this judgment
suggests that this argument is premised on the contention that no
agreement was entered into between Mrs Klerk and Dr Chan for a lease of
the premises. Since we have found that there was a valid and binding
agreement for a lease of the premises, this argument is simply untenable.
62 The next contention in defence is that Dr Chan by requesting

Mrs Klerk on 14 December 1983 through his solicitors to vacate the
premises and deliver up possession “in the course of the week” had
repudiated the agreement for the lease constituted by the signed acceptance
of Dr Chan’s letter of 7 July 1983. Mrs Klerk’s evidence that she had acted
upon the letter by making arrangements to move was not accepted by the
learned judge. He did not believe her evidence in the absence of other
documentary evidence of which there was none. In any event Mrs Klerk or
her solicitors did not respond to Dr Chan’s solicitors’ letter of 14 December
1983 until 10 January 1984 when she said through her solicitors that she
would give vacant possession of the premises on 31 January 1984. In the
meanwhile the request to vacate was countermanded by Dr Chan’s
solicitors on 27 December 1983. The factual position then is that even if the
14 December 1983 letter was a repudiation of the lease of the premises it
was retracted or withdrawn before it was accepted by Mrs Klerk. The
agreement to lease the premises was still alive. Quite rightly, in our view, the
learned judge rejected this defence, for this as well as other reasons which
we need not go into.
63 Finally it was submitted to us by Mrs Klerk’s counsel that her quitting
the premises on 31 January 1984 did not represent an act of wrongful
repudiation of the agreement constituted by Dr Chan’s letter of 7 July 1983
as it was simply a surrender of the monthly tenancy. This submission is just
not tenable in the light of our findings and that of the learned judge that
there could be no monthly tenancy. We have found that there was a valid
and binding agreement for a lease constituted by the signed acceptance of
Dr Chan’s letter of 7 July 1983. In this situation and in the particular
circumstances of this case whether the surrender of the premises was a
repudiation of the lease is a question of fact. The learned judge found that:
The defendant’s [Mrs Klerk’s] quitting the said premises [the
premises] on 31 January 1984, represents an act of wrongful
repudiation of the contract of 7 July 1983, with the plaintiffs [K T Chan
Clinic]. The acceptance of the return of the keys by the plaintiffs is no
more than an acceptance of that repudiation.
64 We agree with the learned judge’s finding.

65 For these reasons we confirm the learned judge’s conclusion that
Mrs Klerk was in breach of the agreement for a lease constituted by the
signed acceptance of Dr Chan’s letter of 7 July 1983 and that K T Chan
Clinic are entitled to an award of damages therefor to which we now turn.
66 The learned judge awarded Dr Chan the damages claimed by the
statement of claim, the basis of which was simply to deduct from the total
amount of the rent and maintenance charges payable under the lease
concluded by Dr Chan’s letter of 7 July 1983, the rents and maintenance
charges paid by Mrs Klerk for her occupation of the premises from
1 December 1983 to 31 January 1984 together with the rents and other
charges recoverable under the Blitz lease. The amount thus realised was
$160,920 to which was added an agreed sum of $6,438 representing
advertising cost and agency fees paid for securing the Blitz lease making a
total of $167,378. Interest was not awarded.
67 The question of the quantification of the damages does not appear to
have been dealt with in any great detail at the trial. The record of appeal
shows that the taking of evidence was completed on 30 May 1991 after
which the court adjourned to 27 and 28 August 1991 for submissions. Both
counsel put in lengthy written submissions on the question of liability and
addressed the learned judge thereon. However, on the question of damages
and the quantification thereof what appears from the record and the written
submissions is that Dr Chan’s counsel based his claim for damages on
Mrs Klerk’s wrongful repudiation of the lease by her quitting the premises
on 31 January 1984 and the acceptance of that repudiation by Dr Chan’s
acceptance of the keys to the premises. He relied on the Malaysian case of
Teh Wan Sang & Sons Sdn Bhd v See Teow Chuan [1984] 1 MLJ 130 on
which his quantification of the damages as particularised in the statement
of claim as particulars of loss appears to have been based.
68 Mrs Klerk’s counsel contented himself by citing a passage at p 433 of
Hill & Redman’s Law of Landlord and Tenant (18th Ed) that since notice of
the letting to Blitz was not given to Mrs Klerk, the letting to Blitz was not on
her account. Accordingly it was submitted that Mrs Klerk’s liability if she
was found liable should be limited at the most for the period the premises
were vacant.
69 The same argument was submitted to us by Mrs Klerk’s counsel. It is
clear that the learned judge did not accept this contention. We also do not
accept it as quite obviously the passage in Hill & Redman referred to is
dealing with the question of surrender by operation of law. We have already
decided that Mrs Klerk’s quitting of the premises was not a surrender but a
wrongful repudiation of the tenancy which repudiation Dr Chan accepted.
70 In our judgment the basis of the assessment of damages where there
are breaches of contract of a lease is correctly dealt with in McGregor on
Damages (15th Ed, 1988) paras 985 and 986. They read as follows:
II Breach by lessee
985 Breaches of contract by a lessee fall into the same two categories as
those by a lessor, breach by failure to accept a lease or by delay in doing
so and breach of the covenants in the lease once accepted.
(A) Failure to accept
986 Where the lessee refuses to proceed with the contract the lessor
may claim specific performance, or treat the contract as discharged, or
sue for damages. If he pursues his remedy in damages, the restrictive
rule in Bain v Fothergill (1874) LR 7 HL 158 has no application and
therefore the normal measure is represented by the contractual rent
reserved by the lease less the rental value of the premises at the time of
breach. This was applied in Marshall v Mackintosh (1898) 78 LT 750
where the plaintiff had relet the premises at a lower rent, which was all
they would now command, and damages were assessed on the basis of
the difference between the contractual rent under the broken
agreement and the new rent. If however the plaintiff has succeeded in
reletting at a higher rent than the contractual rent because of market
improvements, then he will only be entitled to nominal damages: this
was the position in Oldershaw v Holt (1840) 12 A & E 590.
71 Before applying this principle to the instant case it is necessary to

dispose of a peripheral issue. It is the contention of Mrs Klerk’s counsel that
there ought to be a deduction for income tax from any sum awarded to
Dr Chan as damages. We were referred to British Transport Commission v
Gourley [1956] AC 185; [1955] 3 All ER 796 but not otherwise greatly
assisted by counsel.
72 However, it appears that there are certain limitations to the

application of the rule in Gourley’s case. These are discussed in paras 551 to
560 of McGregor on Damages. For the rule in Gourley’s case to apply two
factors must necessarily be present. If one or the other factor is not present
then no deduction ought to be made for tax from the damages awarded.
The two factors are:
(a) the sums for the loss of which damages are awarded constitute
compensation which would have been subject to tax; and
(b) the damages awarded to the plaintiff would themselves not be
subject to tax.
73 Clearly, in this case factor (a) is fulfilled, as the rental income received
by K T Chan Clinic from Mrs Klerk in respect of the premises would be
taxable under s 10(1)(f) of the Income Tax Act (Cap 134) as rent. However,
factor (b) would not in our view be fulfilled. The Court of Appeal held in
Raja’s Commercial College v Gian Singh & Co Ltd [1974–1976] SLR(R) 225
that damages awarded in lieu of rent are to be considered as “profits arising
from property” and as such are taxable under s 10(1)(f) of the Income Tax
Act. Accordingly, we do not accede to this submission.
74 The premises were vacant from the date Mrs Klerk vacated them on
31 January 1984 to 9 November 1984 when the new lease was granted to
Blitz, ie a period of nine months and eight days. The learned judge was
satisfied that Dr Chan had taken reasonable steps during this period of nine
months and eight days to find a suitable tenant for the premises and had
not shown an unreasonable attitude in holding out for the same rent he had
leased the premises to Mrs Klerk and by attempting to let the premises as
they were, made up of five separate units, instead of breaking them up and
combining the units to make up more easily lettable smaller premises. With
respect to the learned judge we think that Dr Chan had not done enough to
find a tenant sooner than the nine months and eight days the premises were
vacant. His advertisements were confined to notices in the Singapore
Medical Association’s journals rather than advertisements in the press to
the general public. We think there is substance in Mrs Klerk’s contention
that had Dr Chan realised and accepted that rents of business premises
were falling and that it would have been easier to get tenants for smaller
premises than the premises which had an area of 1,700sq ft he would have
been able to relet the premises much sooner than 9 November 1984. We
have no doubt that had Dr Chan done what he did to secure Blitz as a
tenant of the premises by advertising and engaging an agent he would have
succeeded in reletting the premises much sooner.
75 This brings us to another peripheral issue. It is that the learned judge
ought not to have based his award for damages on the $6,300 per month
rental paid by Blitz. The fact is that Mrs Klerk had not herself tendered any
evidence as to what the market rate was at the date of her breach. In the
absence of any other evidence we are of the view that the learned judge was
right in accepting that $6,300 represented a fair market rental for the
premises following the breach by Mrs Klerk.
76 Taking into consideration what we have said above we would assess

the damages as follows on the basis that three months was a reasonable
period for Dr Chan to relet the premises and that $6,300 is a fair market
rental of the premises following the breach by Mrs Klerk.
(1) 3 months rent at $9,180 per month = $27,540

(2) 31 months (remainder of the lease to =
Mrs Klerk less her period of occupation and the
3 months allowed above) at $2,880 per month
($9,180 - $6,300) $89,280
(3) Agreed advertising cost and agent’s fee = $6,458
$123,278
77 Dr Chan through his counsel claims for interest on the damages

awarded pursuant to s 9 of the Civil Law Act (Cap 43, 1988 Ed) by way of a
respondent’s notice. Interest was not claimed by the statement of claim as
originally filed. It was added by way of an amendment on 27 August 1991
when the learned judge heard the final submissions, which were in written
form. The written submission of Dr Chan’s counsel did not address the
question of interest, nor did he address the learned judge orally on the
question of interest. All this is admitted by Dr Chan’s counsel.
78 The question of interest on damages under s 9 of the Civil Law Act is a

matter of discretion of the trial judge. In this case the learned judge did not
have any argument from Dr Chan’s counsel and accordingly any argument
in response from Mrs Klerk’s counsel. In this situation the learned judge
can hardly be expected, notwithstanding that Dr Chan’s counsel had sought
and obtained an amendment to the statement of claim to include a claim for
interest, to consider it on his own motion. In our judgment having regard
to this and other relevant circumstances no interest ought to be awarded.
79 For these reasons we would dismiss Mrs Klerk’s appeal as well as

Dr Chan’s cross-appeal. We would, however, vary the learned judge’s
assessment of damages from $167,378 to $123,278. Notwithstanding the
variation we have made we do not think there should be any modification
to the orders for costs which normally follow the event. Accordingly the
respondents are entitled to the costs of this appeal and the appellant is
entitled to the costs of the cross-appeal. There will be the usual order that
the security deposit of costs in court be paid out to the respondents or their
solicitors to account of the respondents’ costs.
Warren L H Khoo J (delivering the dissenting judgment):

80 The facts are well set out in the judgment of my learned brethren,
which I have had the pleasure to read in draft. I shall refer to them where
necessary but shall not repeat them except where convenient for the
purpose of exposition. I may also need to refer to some facts which have not
been set out. I shall for simplicity’s sake use the word “plaintiff” to refer to
Dr Chan as well as to the company that bears his name who were the
plaintiffs in the suit.
81 It seems to me that the central issue in this case is whether the letter of
7 July 1983 containing terms purportedly accepted by the defendant
constituted a final and enforceable contract, or whether it left some material
terms still to be settled between the parties.
82 The plaintiff’s case was founded on his assertion that the letter of
7 July accepted by the defendant on 8 July constituted the final and binding
agreement of the parties.
83 My conclusions can shortly be stated as follows. In the first place, the
letter of 7 July did leave at least two material terms of the contract unsettled.
84 Secondly, the parties’ conduct throughout, before and after this
apparent conclusion of an agreement by this letter, shows that they did not
as a matter of fact treat the letter of 7 July as constituting a concluded
contract.
Material terms not settled

85 It is clear law that even if the parties have reached agreement on the
essential terms of a contract, if some other material terms have not been
agreed, there is no contract. In W J Rossiter, George Curtis and others v
Daniel Miller (1878) 3 App Cas 1124, a case of a sale of land,
Lord Blackburn said (at 1151):
[T]hough the parties may have agreed on all the cardinal points of the
intended contract, yet, if some particulars essential to the agreement
still remain to be settled afterwards, there is no contract. The parties, in
such a case, are still only in negotiation.
86 In this case, the parties had no doubt reached agreement on certain

essential matters concerning the lease. However, there were other terms set
out in the letter which had yet to be settled. These were in regard to (a)
option to renew; (b) subletting; and (c) the “usual terms”. I shall deal with
(c) first.
“Usual terms”
87 The letter of 7 July stated: “The lease will be legally drawn up with the
usual terms that apply in Singapore”.
88 I agree that the letter of 7 July, if otherwise final and binding, would
not be rendered any less so by the provision that the formal lease would
contain the “usual terms” applicable in Singapore. What is usual is a matter
capable of ascertainment by the court on evidence. See Flexman v Corbett
([47] supra) (“usual covenants”).
Option to renew and subletting

89 In regard to option to renew, the letter stated:
The lease will be for three years commencing 1 December 1983 with an
option for renewal at the end of the period, details of which will be
incorporated in the lease.
90 In regard to subletting, the letter stated: “Subletting will be permitted,
details of which will be in the lease.”
Nature of the problem: admissibility of evidence

91 I think there are only two questions that need to be asked and
answered about these provisions in the letter: firstly, were these material
terms, and secondly, were they settled?
92 The problem in regard to these provisions arises from the use of the
words “details of which will be incorporated in the lease” and “details of
which will be in the lease”.
93 The problem is not one of ascertaining the meaning of these
particular words or of the provisions in the letter with these words. There is
no doubt what the provisions mean. As I read it, in the first case, the
provision simply means that at the end of the three years, there is an option
to renew, but the details or any further details of that option will be found in
the lease to be drafted. In the second case, subletting will be permitted, but
any further details are to be found in the lease to be drafted.
94 One is entitled, I think, to look at the course of negotiations and the
evidence, not to find out what is meant by these words, or the provisions as
a whole, but to answer the question: Had the parties reached agreement?
The principles applicable

95 In Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 at 288–
289, Parker J said:
It appears to be well settled by the authorities that if the documents or
letters relied on as constituting a contract contemplate the execution of
a further contract between the parties, it is a question of construction
whether the execution of the further contract is a condition or term of
the bargain or whether it is a mere expression of the desire of the
parties as to the manner in which the transaction already agreed to will
in fact go through. In the former case there is no enforceable contract
either because the condition is unfulfilled or because the law does not
recognize a contract to enter into a contract. In the latter case there is a

binding contract and the reference to the more formal document may
be ignored.
96 This statement is described by the learned editors of Anson’s Law of

Contract as the classic statement of the issues involved.
97 In resolving such issues, the whole of the circumstances of the case

must be looked at. Earl Cairns LC in Thomas Hussey v John Horne-Payne
and G M Horne-Payne, his wife (1879) 4 App Cas 311 at 316 said:
… it is one of the first principles applicable to a case of the kind that
where you have to find your contract, or your note or memorandum of
the terms of the contract in letters, you must take into consideration
the whole of the correspondence which has passed. You must not at
one particular time draw a line and say, ‘We will look at the letters up
to this point and find in them a contract or not, but we will look at
nothing beyond.’ In order fairly to estimate what was arranged and
agreed, if anything was agreed between the parties, you must look at
the whole of that which took place and passed between them.
98 In his book The Law of Contract, Prof Treital (7th Ed, 1987) puts the
position thus at p 14:
Businessmen do not, any more than the courts, find it easy to say
precisely when they reached agreement, and sometimes continue
negotiations after they appear to have agreed to the same terms. In
such a case, the court will look at the entire course of negotiations to
decide whether an apparently unqualified acceptance did in fact
conclude the agreement.
The two questions
99 I return to the two questions I posed earlier, ie were the terms in

question material and were they settled?
100 I have no doubt that the two terms were material ones, or in
Lord Blackburn’s words, they were “particulars essential to the agreement”.
101 So far as subletting is concerned, the defendant gave evidence that

when she first saw the premises, she thought that they were rather big for
her needs, and that she would like to sublet part of them. In her letter to the
plaintiff of 5 July, she made a point of it. She stated in her letter: “Subletting
is permitted if and when required.”
102 There was a conflict of evidence as to whether any discussion took

place before the plaintiff wrote his letter of 7 July. The learned judge
accepted the plaintiff’s evidence that there was a discussion on the morning
of 7 July, and that he wrote the letter after the discussion. I am sure the
learned judge was right to find that there was a discussion.
103 However, it is clear that the discussion was mainly about the rent.
There is no evidence that any discussion took place in regard to the two
terms in question.
104 How did the two terms come to be worded in the way they were in the
plaintiff’s letter? On subletting, the learned judge found as follows:
The evidence of the defendant is that during the negotiations [the
plaintiff] told her that she could sublet part of the premises; he did not
say that she had to get his permission.
The evidence of [the plaintiff] is that he would let the defendant sublet
as and when she wanted and he would screen the proposed subtenant
and see that the activities of the subtenant did not contravene the
regulations or the law and for that he would refer to his solicitors. He
would approve the subtenant whose activities did not contravene the
regulations or the law.
105 There is no evidence that what the plaintiff had in mind was
communicated to the defendant. The plaintiff simply reflected what he had
in his own mind by phrasing the term about subletting in the manner he
did.
106 The plaintiff approached the matter of option to renew in the same
way. This is what he said:
[The defendant] wanted an option to renew for two years. I was not
sure what it should be. I wanted one year. It would be between one and
two years, that was left undecided. The other point was the amount of
rent, as the rent would depend on the market at the time of renewal.
107 The plaintiff explained the meaning of that sentence in his letter as
follows:
It means that the tenant has an option to renew the lease for a further
period to be specified together with other conditions. I suppose I
would decide the conditions after consulting my lawyers.
108 It is quite clear that the “details” referred to in the 7 July letter relating
to the option to renew were not settled at that time, as even the plaintiff
himself was not sure what the details were, or were to be.
109 The plaintiff’s letter of 7 July therefore in terms and in accordance
with the subjective intention of the plaintiff left the two matters of
subletting and option to renew unsettled. In regard to the former, the
defendant had in mind an unfettered right to sublet, but the plaintiff had a
qualified right in mind.
110 There must be a qualitative difference between an unfettered right to
sublet, and one subject to the consent of the landlord, even though in the
latter case, it is implied by law that the consent would not be unreasonably
withheld. The matter was simply not settled, as the letter did not show
which had been opted for.
111 In regard to the option to renew, the letter did not provide for at least
two essential features of an option for renewal. It did not say how long the
renewed term would be. It also did not say what were the terms of the
renewed tenancy, for instance the amount of the rent. Was it to be the same
rent as the existing tenancy? Was it to be the market rent at the time of the
renewal? The letter provided no answer. Neither did it provide a formula or
mechanism whereby these matters could be ascertained.
112 By way of contract, I refer to two cases. In Brown v Gould ([44] supra),
the option clause provided for “such new lease to be for a further term of
21 years at a rent to be fixed having regard to the market value of the
premises at the time of exercising this option taking into account to the
advantage of the tenant any increased value of such premises attributable to
structural improvements made by the tenant”. Megarry J held, with respect
rightly, that such a clause was capable of being given effect by the court
hearing valuation evidence and coming to a view as to what the rent should
be.
113 In Lewis v Stephenson ([41] supra), the words “with an option of
renewal” were held to have the effect of providing for the renewal of the
lease on the same terms as those of the existing lease (except the term
providing for renewal so as to avoid the possibility of a perpetual renewal in
the absence of clear language providing for that result).
114 In the instant case, if the clause had simply said “The lease will be for
three years commencing 1 December 1983 with an option for renewal at the
end of the period”, without the words referring to details in the lease, it
would have had the same effect as had the words in Lewis v Stephenson.
115 The words “details of which will be incorporated in the lease” are an
integral part of the clause dealing with the subject of option to renew. I do
not think one could properly disregard them and treat the clause as one
providing for renewal on the same terms as those of the existing lease. To
do so, it might well be said, is tantamount to rewriting the clause.
116 I am of the view, therefore, that the letter of 7 July was not intended to
deal in any conclusive way with these two material matters, but that it was
intended that the formal lease would do so. In so far as the two matters were
material at the date of the letter, there was no concluded contract at all
between the parties, even though they had reached agreement on other
terms of the intended lease.
117 To my mind this is not a case where the parties have reached all the
terms of a contract and merely wish to have what they have agreed put in a
more formal document. What the parties had negotiated, as embodied in
the letter, was, in the true sense of the word, subject to the conclusion of a
formal lease, although the parties did not use the magic words “subject to
contract”.
118 The learned judge came to the view that these two terms were not
material apparently on the ground that the correspondence between the
parties after the letter of 7 July shows that the two terms were not in
dispute.
119 I am not sure whether this is the right approach. The defendant was
apparently satisfied with the provisions in the draft lease (sent under cover
of the plaintiff’s solicitors’ letter of 13 September), and did not raise any
question about them. However, in my view this cannot detract from the fact
that the letter of 7 July had not settled these matters.
The parties’ conduct

120 The parties also conducted themselves in relation to each other in a
manner consistent with the position that they had not concluded a contract
by the letter of 7 July.
121 I must first recount what happened after this letter. The draft lease
was sent by the plaintiff’s solicitors to the defendant on 13 September, but
she did not sign it. On 7 November, there was a discussion between the
parties when the defendant raised the issue of the use of the premises and of
a “diplomatic clause”. There followed inconclusive exchange of
correspondence between the parties.
122 Then on 28 November, the plaintiff wrote direct to the defendant a
letter which, among other things, contained the following statement:
As you know, the lease will commence on 1 December 1983.
Therefore, if the lease is not signed before then, occupancy of the
premises would not be legally covered from 1 December 1983. I think
it is in the interest of the landlord and the tenant to have the lease
signed in good time.
123 The letter concluded:

If the lease is not signed by 1 December 1983, the December rental paid
and other provisions of the lease observed, I would consider that I am
free to find new tenants and that I have no further obligations to you.
124 There was apparently no response to this letter. On 14 December, the

plaintiff’s solicitors wrote:
It appears that your clients are no longer interested in taking up the
tenancy of the above premises. That being so, kindly request them to
vacate the above premises in the course of this week.
125 In none of the letters written and discussions held during this period,
did either party refer to the letter of 7 July, let alone any binding effect of
that letter. The plaintiff’s letter of 28 November was an affirmation of his
position that unless a formal lease was signed there was no legally binding
contract. This position was further affirmed by his letter of 14 December.
126 It was not until his solicitors’ letter of 27 December that the plaintiff
took an entirely opposite position and asserted that the letter of 7 July was a
concluded contract. To my mind this smacks of an afterthought.
Consequences
127 If I am right in my view that the letter of 7 July was a concluded
contract, then either party was free to ask for new or additional terms or
even renegotiate terms which had been previously agreed. In that event, no
fault lay in the defendant raising the question of the use of the premises and
the “diplomatic clause”.
128 In the High Court, the plaintiff relied on what he said was part
performance by the defendant in paying the deposit required by the terms
of the letter, in carrying out interior decoration and assuming occupation of
the premises, and in assuming liability for the public utilities charges.
129 As the plaintiff’s counsel recognised in his submissions before the
learned judge, the issue of part performance is relevant only as a reply to
any defence of non-compliance with s 4 of the Statute of Frauds. As no such
defence was raised, I am not sure why the point about part performance was
made.
130 I would regard the acts of the defendant on which the plaintiff relied
as “part performance” as nothing more than acts done pending the
finalisation of the formal contract. Once that proved to be abortive, the
parties were free from any obligations to each other.
131 I would have been in favour of allowing the appeal.
Headnoted by Arvin Lee.

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book Page 609 Sunday, September 20, 2009 1:37 AM

[1993] 1 SLR(R) SINGAPORE LAW REPORTS (REISSUE) 609

Court of Appeal — Civil Appeal No 166 of 1991

610 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

respondent countermanded its request and sought instead specific performance

Held, dismissing the appeal and the cross-appeal (Warren L H Khoo J

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 611

Association’s journals rather than advertisements in the press to the general

Per Warren L H Khoo J (dissenting):

612 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

23 April 1993 Judgment reserved.

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 613

6 According to the evidence of Mrs Klerk, she met Dr Chan again

614 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

7 Commenting on Mrs Klerk’s letter of 5 July 1983, Dr Chan said in

8 He then went on to say:

9 Dr Chan’s letter to Mrs Klerk of 7 July 1983 written on a letterhead

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 615

month at present. Should there be any increase in maintenance

11 Apparently there were other people interested in the premises but

616 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 617

Dr Chan’s case, it is desirable to complete the narration of facts as they

20 The formal lease incorporated the agreed terms as stated in Dr Chan’s

3(21) To use or occupy the demised premises solely and exclusively as

618 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

I met Dr Chan on 7 November 1983. We discussed about the jewellery

I was not in the position to sign the agreement.

22 Dr Chan recalled his meeting with Mrs Klerk on 7 November 1983 in

23 Having consulted his solicitors, Dr Chan was prepared to

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 619

25 There was no reaction from Mrs Klerk. Accordingly Dr Chan’s

27 To this letter Mrs Klerk replied through her solicitors on 10 January

620 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 621

34 This becomes abundantly clear from her letter of 5 July 1983 to

36 The factual position, then, is that Dr Chan consented to Perrodo

622 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 623

624 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

In Re Gape’s Will Trusts, Verey v Gape [1952] Ch 418, affirmed

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 625

626 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 627

53 We must next consider whether the parties contemplated the

628 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 629

(b) The purchaser’s solicitors wrote again on 27 June 1979. It read:

(c) The vendor’s solicitor replied on 9 July 1979 as follows:

630 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

59 Accordingly we conclude that Dr Chan’s letter to Mrs Klerk dated

60 The remaining defences taken by Mrs Klerk can be disposed of quite

62 The next contention in defence is that Dr Chan by requesting

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 631

64 We agree with the learned judge’s finding.

632 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

71 Before applying this principle to the instant case it is necessary to

[1993] 1 SLR(R) Klerk-Elias Liza v K T Chan Clinic Pte Ltd 633

72 However, it appears that there are certain limitations to the

634 SINGAPORE LAW REPORTS (REISSUE) [1993] 1 SLR(R)

76 Taking into consideration what we have said above we would assess