Abdul Jalil v A Formation Construction: Forbearance as Consideration in Rental Arrears Dispute

In Abdul Jalil bin Ahmad bin Talib and Others v A Formation Construction Pte Ltd, the High Court of Singapore addressed a claim by the plaintiffs, trustees of a trust, to recover rental arrears and other amounts from the defendant, A Formation Construction Pte Ltd, under leases for properties at Purvis Street and Amoy Street. The defendant argued that a prior compromise agreement, made by the previous sole trustee, waived these amounts. The court, presided over by Judith Prakash J, dismissed the plaintiffs' claim, holding that the compromise agreement was valid due to the defendant's forbearance from pursuing a claim for damages against the trustees as sufficient consideration.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiffs' claim dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

High Court case regarding rental arrears and the validity of a compromise agreement. The court dismissed the claim, finding forbearance was valid consideration.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Abdul Jalil bin Ahmad bin TalibPlaintiffIndividualClaim DismissedLost
Hussen Bin Ahmad Bin Salamah Bin Awad Bin TalibPlaintiffIndividualClaim DismissedLost
A Formation Construction Pte LtdDefendantCorporationClaim DismissedWon
Waleed Abdul Jalik TalibPlaintiffIndividualClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Aloysius LengAbrahamLow LLC
Anthony NettoTeo Keng Siang & Partners
Michael YapTeo Keng Siang & Partners

4. Facts

  1. The plaintiffs are the present trustees of a trust established under the will of Shaik Roubayak bin Khalid bin Talib.
  2. The trust owns properties at 29 and 30 Purvis Street and at 21 Amoy Street.
  3. In 1996, the trust entered into lease agreements with the defendant for the Purvis and Amoy properties.
  4. A dispute arose regarding rental arrears and interest due under the leases.
  5. In February 2002, the then sole trustee purported to waive the payment of the amounts now claimed.
  6. The defendant made payments in accordance with the compromise agreement.
  7. The plaintiffs, as new trustees, sought to recover the waived amounts, arguing the compromise was invalid.

5. Formal Citations

  1. Abdul Jalil bin Ahmad bin Talib and Others v A Formation Construction Pte Ltd, Suit 892/2004, [2006] SGHC 171

6. Timeline

DateEvent
Shaik Roubayak bin Khalid bin Talib alias Shaikh Roubayak bin Khalid bin Talip alias Shaik Roubayak bin Khalid bin Ghalib bin Thalib alias Shaikh Rubiye bin Khalid bin Ghalib bin Thalib died.
Trust entered into two lease agreements with the defendant for the Purvis property and the Amoy property.
Date from which rental under the leases commenced.
M/s Mallal & Namazie reminded the defendant via two letters to the defendant’s then solicitors, M/s Cheong Hoh & Associates (“CHA”), that the leases of the properties had commenced on 9 December 1998 and that the rental on the same payable from that date was still outstanding.
Mr Awad died.
Replacement trustee appointed.
M/s Cheong Hoh & Associates wrote to M/s Mallal & Namazie seeking a waiver of rental until temporary occupation permits were obtained.
M/s Mallal & Namazie replied stating that the trust would only consider the request for a waiver after restoration of the properties commences and the defendant has settled outstanding bills.
Vacant possession of the properties was delivered.
Replacement trustee retired.
M/s Teo Keng Siang & Co wrote to M/s Mallal & Namazie asking for a meeting with the sole trustee to discuss the rental matter.
M/s Teo Keng Siang & Co reiterated the request for a meeting to discuss the rental question and a change of the commencement date for the rental.
M/s Mallal & Namazie wrote to M/s Teo Keng Siang & Co demanding outstanding rental for the Amoy and Purvis properties.
M/s Teo Keng Siang & Co responded proposing that the commencement date for the rental should be the date that vacant possession was given.
M/s Mallal & Namazie replied stating that their client was not able to agree to rental commencing from the date of vacant possession.
M/s Mallal & Namazie sent a letter marked “WITHOUT PREJUDICE” in which they stated that as a compromise, their client was prepared to waive rental for the period up to 31 December 1999 subject to all rental from 1 January 2000 to the date of that letter being paid within seven days of such date, time being of the essence.
M/s Teo Keng Siang & Co stated that as temporary occupation permit had been obtained for the Amoy property the defendant was willing to pay rental for that property from 1 January 2000 onwards.
M/s Mallal & Namazie sent out notices to quit directly to the defendant in respect of each of the properties.
Two of the defendant's directors confirmed acceptance of the offer on the terms in which it was made.
Payment of the sum of $120,000 for the Amoy property was made.
M/s Teo Keng Siang & Co confirmed that the defendant was agreeable to the counter proposal in relation to the Purvis property.
Defendant made payment of the $120,000 due at the end of April 2002.
Defendant paid the remaining $120,000.
The defendant had paid the trust $390,000 as rental for the Purvis property for the period from December 1998 to March 2003.
Mr Mohamad and his then co-trustee were discharged from acting as the trustees of the trust and the first and second plaintiffs were appointed the trustees of the trust in their place.
The first and second plaintiffs appointed the third plaintiff as an additional trustee of the trust.
AbrahamLow LLC wrote to the defendant demanding payment of the sums that had been waived.
This action was started.
Judgment reserved.

7. Legal Issues

  1. Consideration
    • Outcome: The court held that the defendant's forbearance from pursuing a claim for damages against the trustees constituted valid consideration for the compromise agreement.
    • Category: Substantive
    • Sub-Issues:
      • Forbearance as consideration
  2. Ostensible Authority
    • Outcome: The court held that the solicitors for the trust had ostensible authority to enter into the compromise agreement on behalf of the trust.
    • Category: Procedural
    • Related Cases:
      • [1982] Ch 374
  3. Estoppel
    • Outcome: The court held that even if there was no consideration for the compromise, the plaintiffs would be estopped in equity from making their claim.
    • Category: Substantive
    • Related Cases:
      • (1877) 2 App Cas 439
      • [1947] KB 130
  4. Powers of a Sole Trustee
    • Outcome: The court held that the sole trustee had the power under the will to agree to the compromise.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Interest

9. Cause of Actions

  • Recovery of Rental Arrears
  • Recovery of Interest

10. Practice Areas

  • Commercial Litigation
  • Real Estate Law

11. Industries

  • Construction
  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Waugh v HB Clifford & Sons LtdEnglish Court of AppealYes[1982] Ch 374England and WalesCited for the principle that solicitors have ostensible authority to compromise actions, even without express authority.
Harford v Birmingham City CouncilLands TribunalYes(1993) 66 P & CR 468England and WalesCited to support the principle that a solicitor has ostensible authority to compromise proceedings.
Hughes v Metropolitan Railway CoN/AYes(1877) 2 App Cas 439N/ACited as a foundational case for the doctrine of equitable estoppel.
Central London Property Trust Ltd v High Trees House LtdN/AYes[1947] KB 130N/ACited as a foundational case for the doctrine of promissory estoppel.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Trust
  • Trustee
  • Rental Arrears
  • Lease Agreement
  • Compromise Agreement
  • Consideration
  • Forbearance
  • Ostensible Authority
  • Estoppel
  • Waiver

15.2 Keywords

  • rental arrears
  • compromise agreement
  • consideration
  • forbearance
  • trustee
  • ostensible authority
  • estoppel
  • waiver

17. Areas of Law

Area NameRelevance Score
Contract Law90
Estoppel70
Trust Law60
Forbearance50
Ostensible Authority40
Capacity of parties40

16. Subjects

  • Contract Law
  • Trusts
  • Real Property
  • Civil Litigation