Su Ah Tee and others v Allister Lim and Thrumurgan (sued as a firm) and another (William Cheng and others, third parties)

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 11 August 2014
• Neutral Citation: [2014] SGHC 159
• Court: High Court (Singapore)
• Docket Number: Suit No 663 of 2011
• Year: 2014
• Published date: 20 August 2016
• Hearing Date: 27 June 2013,01 July 2013,25 June 2013,24 June 2013,12 September 2013,02 July 2013,28 June 2013,07 November 2013,26 June 2013
• Plaintiff Counsel: Thomas Lei (Lawrence Chua & Partners)
• Defendant Counsel: Christopher Anand Daniel, Ganga Avadiar and Arlene Foo (Advocatus Law LLP),Subbiah Pillai (Cosmas LLP),Joseph Chai (Joseph Chai & Co)
• Subject Matter: Tort,negligence,breach of duty,damages,contribution,Land,conveyance,Contract,misrepresentation,fraudulent
• Citation: [2014] SGHC 159

Belinda Ang Saw Ean J: Introduction

In this action, the plaintiffs are claiming damages for breach of contract and negligence from the defendants who acted as their solicitors in the purchase of a Housing Development Board (“HDB”) shophouse situated at Blk 63 Kallang Bahru, #01-423, Singapore (“the Property”). The plaintiffs allege that it was only sometime after the purchase was completed that they learnt that: (a) they had paid $900,000 for a property which had only 17 years remaining out of a 30-year lease, instead of what they had expected, which was a property with 62 years of its lease remaining (“the tenure problem”), and (b) the Property was subject to a head tenancy agreement instead of two separate tenancy agreements which the first plaintiff had received with the option to purchase (“the tenancy problem”). The plaintiffs allege that the defendants, inter alia, failed to advise or inform them of the tenure problem before completion or at all, and further, failed to advise them on the head tenancy to which the sale of the Property was subject. The plaintiffs claim that these breaches have caused them to suffer loss and damage, including overpayment for the Property.

The scope of the defendants’ professional duty to the plaintiffs is central to the plaintiffs’ claim against the defendants (“the main action”) since the starting point of any discussion on liability for damages must be the precise nature of the duty which has allegedly been breached. In this judgment, the content of the defendants’ professional duty to the plaintiffs and an understanding of the facts and circumstances giving rise to that duty will be examined.

Regrettably, through an unfortunate coincidence of events and sheer bad luck, the real position on the Property’s leasehold tenure was not appreciated before completion of the conveyancing transaction. The facts reveal that the defendants carried out a Singapore Land Authority (“SLA”) title search on the Property before the option to purchase was exercised on 7 April 2011, and they learnt from the search results that the Property had a 30-year lease with effect from 1 August 1998, of which only 17 years remained at the time the option was purchased. However, that particular piece of information was not passed on to the plaintiffs. Ironically, the defendants, in their capacity as solicitors for the lender-bank, provided the latter with a report on the Property’s title that mentioned the Property’s leasehold tenure of 30 years with effect from 1 August 1998. For unknown reasons, despite that report, the lender-bank offered and the plaintiffs accepted a 30-year term loan that was secured by a property (ie, the Property) with only 17 years remaining out of its 30-year lease.

Interestingly, as can be seen from the brief narration at [3] above, this case is not about losses incurred as a result of the plaintiffs’ reliance on erroneous or inaccurate information provided by the defendants. Rather, it is about losses incurred following the defendants’ failure to provide the plaintiffs the requisite information for them to make an informed decision as to whether to proceed with the purchase of the Property. This distinction is relevant to the evidential burden which the plaintiffs have to discharge. If the plaintiffs’ case had been based on reliance on erroneous or inaccurate information from the defendant, it would have been sufficient for the plaintiffs, in order to prove their case, to demonstrate that they had relied on the defendants’ information. However, in view of how the plaintiffs have pleaded their case, the plaintiffs must satisfy the court, on a balance of probabilities, that they would not have purchased the Property at $900,000 if the defendants had conveyed to them relevant information on the tenure problem and the tenancy problem (collectively “the tenure & tenancy problems”) at any time before completion.

The defendants have brought third party proceedings (“the third party action”) for an indemnity, or alternatively a contribution under s 15 of the Civil Law Act (Cap 43, 1999 Rev Ed) (“the Civil Law Act”) from (a) the vendor of the Property, William Cheng (“Cheng”); (b) the plaintiff’s property agent, Ng Sing; and (c) Ng Sing’s then-employer, SGR Property Pte Ltd (“SGR Property”). The defendants’ case against the third parties is that they had each, amongst other things, fraudulently and/or negligently misstated that the Property had 62 years of its lease remaining and was being sold subject to two tenancy agreements when that was clearly not the true position.

On the first day of the trial, Cheng, the first third party, withdrew his counterclaim against the defendants. Hence, the claims which this court has to deal with in this judgment are confined to: (a) the plaintiffs’ claims against the defendants in the main action vis-à-vis the latter’s handling of the conveyancing transaction; and (b) the defendants’ indemnity and contribution claims against the third parties in the third party action.

In the course of the arguments presented in the main action and in the third party action, a number of subsidiary matters were ventilated and many authorities were cited. It is unnecessary for me to address in this judgment every subsidiary matter that was raised as some have little or no bearing on the claims whilst others merely add to the chronology of events. Therefore, I will make findings on these subsidiary matters where necessary in this judgment, but my focus will be on the core issues in dispute.

The parties

The first plaintiff, Su Ah Tee (“Su”), is a businessman. His son, Su Hong Quan (“Hong Quan”), and his wife, Lye Yin (“Lye”), are the second and third plaintiffs respectively. It is not disputed that: (a) at all material times, Su had a personal interest in the purchase of the Property and was the person who had negotiated (through Ng Sing) with Cheng; and (b) it was Su who had engaged the defendants to act for the plaintiffs in the conveyancing transaction. It is also not disputed that Su made use of the names of his son and his wife to purchase the Property and provided all the funds for the purchase aside from the money obtained from a bank loan. In short, Hong Quan and Lye were Su’s nominees. The defendants accept that they had a solicitor-client relationship not only with Su, but also his nominees. Only Su and Hong Quan testified at the trial.

The particular solicitor who had conduct of the plaintiffs’ conveyancing transaction is the second defendant, Allister Lim (“Lim”), a partner in the first defendant, M/s Allister Lim & Thrumurgan (“ALT”). Lim qualified as a lawyer in 1999, and his practice has included conveyancing since 2004. The defendants had previously acted for Su in other conveyancing transactions. According to Su, Lim was the solicitor whom he had instructed to act on his behalf in relation to other conveyancing transactions from December 2010 to 2011.

Cheng, the first third party, is the vendor of the Property. He is a semi-retired cleaning supervisor and was the registered owner of the Property before it was sold to the plaintiffs.

Ng Sing is the second third party. He was employed by the last third party, SGR Property, at the material time. As stated, Ng Sing was Su’s property agent in relation to the sale and purchase of the Property. He testified on behalf of the plaintiffs.

Other persons who testified at the trial were: Oh Seng Lee (“Sam Oh”), a property agent with PropNex Realty Pte Ltd at the material time, who now works as a warehouse supervisor. Sam Oh, who purportedly acted as Cheng’s agent in the sale and purchase of the Property, was also a co-broker with Ng Sing in the transaction; Fu Lee Ping (“Fu”), ALT’s conveyancing clerk at the material time; Boldwin Sim (“Sim”), a home loan manager at a branch office of the lender-bank who dealt with Su’s loan application; Derrick Wong (“Wong”), the plaintiffs’ expert witness on conveyancing practices; and the respective parties’ expert who gave evidence on the value of the Property. Cheng’s solicitors for the transaction, M/s Esvaran & Tan (“E&T”), did not testify at the trial.

The plaintiffs’ counsel is Mr Thomas Lei (“Mr Lei”) while the defendants’ counsel is Mr Christopher Anand Daniel (“Mr Daniel”). Cheng is represented by Mr Subbiah Pillai (“Mr Pillai”), and Ng Sing (the second third party) by Mr Joseph Chai. SGR Property filed its defence in the third party action, but was neither present nor represented at the trial.

The arguments in the main action

Essentially, the plaintiffs’ case is that if they had known of the tenure & tenancy problems, they would not have gone ahead with the purchase of the Property as the purchase price of $900,000 was too high for the Property. The plaintiffs invite the court to find the following facts as proved in respect of the aforementioned problems: The tenure problem The defendants were aware that Su had been told that there were 62 years remaining on the lease of the Property as Su had conveyed the same information to Fu in March 2011. The defendants became aware on 5 April 2011 that the Property’s leasehold tenure was a 30-year term of which only 17 years remained. The defendants failed to inform, communicate with or advise the plaintiffs on the tenure problem prior to the exercise of the option to purchase or at any time thereafter before the completion of the sale and purchase of the Property. The tenancy problem The defendants knew that the Property was to be sold subject to tenancy, but failed to appreciate that the sale and purchase of the Property was subject to a head tenancy and that the two tenancy agreements which they had earlier received from Su were sub-tenancies. The defendants failed to explain the legal effect and implications of all three tenancy agreements to the plaintiffs.

The defendants deny any breach of duty owed to the plaintiffs and...