Alrich Development Pte Ltd v Rafiq Jumabhoy

• Jurisdiction: Singapore
• Judge: Chua F A J
• Judgment Date: 16 April 1993
• Neutral Citation: [1993] SGCA 27
• Docket Number: Civil Appeal No 169 of 1991
• Date: 16 April 1993
• Year: 1993
• Published date: 19 September 2003
• Plaintiff Counsel: Cheong Yuen Hee and Tan Kay Khai (Chua, Hay & Wee)
• Citation: [1993] SGCA 27
• Defendant Counsel: Gan Hiang Chye and Chew Kherk Ying (Allen & Gledhill)
• Court: Court of Appeal (Singapore)
• Subject Matter: Wrongful lodgment,Land,s 104 Land Titles Act (Cap 157),Description of estate or interest of caveator appearing in prescribed form,Caveats,Whether description complied with statute and prescribed form,Form of caveat,Application for removal of caveat,Considerations,Purpose and function of caveats

This was an appeal from the decision of the High Court on an application by originating summons under s 111 (1) of the Land Titles Act (Cap 157)(`the Act`) to remove two caveats lodged by the appellants.

At the conclusion of the hearing of the appeal, we allowed the appeal with costs here and below. Two members of the Court of Appeal are now setting out the grounds of the full court. FA Chua J, having retired as a judge since the full Court of Appeal pronounced judgment, is therefore not a party to these grounds.

The facts are as follows. On 8 June 1990, Mr Jumabhoy, through his attorney, granted an option to one Ms Ho Poh Lin to purchase his property at 36 Ewe Boon Road, Singapore at the price of $2.025m. An option fee of $40,500 was paid. The offer contained in the option remained open for acceptance until 4pm on 8 August 1990. It was provided in the option that to exercise the option Ms Ho must sign the `acceptance copy` of the option in the place indicated and deliver it duly signed together with a deposit of a sum equivalent to 10% of the purchase price (less the option money of $40,500 already paid) made in favour of Mr Jumabhoy`s solicitors (identified). It was also provided that Ms Ho had the right to nominate another party who was either a Singapore citizen or a Singapore company as defined in the Residential Property Act (Cap 274) to `execute this option provided that you sign and return the nomination form attached to this option`.

For reasons which we need not go into, Mr Jumabhoy decided to revoke the option. His solicitors wrote to Ms Ho`s solicitors on 6 August 1990 revoking the option. Ms Ho`s solicitors replied by a letter dated 6 August (which it is common ground was not received until the next day, 7 August) that she did not accept the purported revocation of the option. They also forwarded the duly signed `acceptance copy` of the option together with a cheque for the sum of $162,000, which, together with the $40,500 already paid would amount to 10% of the purchase price as stipulated in the option, together also with the completed nomination form nominating Alrich as the nominees.

On 7 August 1990, Alrich lodged a caveat (`the first caveat`) against the property. There followed correspondence between the respective solicitors.

Mr Jumabhoy took the position that the purported acceptance of the option was invalid as the option had been revoked. His solicitors returned the cheque for $162,000 and also the option money of $40,500 earlier received. Alrich took the position that the option was open for acceptance until 8 August and the purported revocation was invalid and of no effect.

On 14 August, Alrich commenced action in Suit No 1452 of 1990 against Mr Jumabhoy in which they sought specific performance and other remedies.

Mr Jumabhoy resists Alrich`s claims on the ground of misrepresentation among others.

On 16 July 1991, Mr Jumabhoy granted another option to one Lee Kang Li to purchase the land. Mr Lee exercised the option on 7 August. The sale was subject to Mr Jumabhoy removing the first caveat. Mr Lee lodged his own caveat on 7 August 1991, but Alrich had on 6 August 1991 lodged their second caveat.

On 4 September 1991, Mr Jumabhoy took out the originating summons under s 111(1) of the Act whereby he sought the removal of both caveats lodged by Alrich.

The summons was heard by Chao Hick Tin J. The learned judge held that both caveats were not in compliance with the requirements of s 104 of the Act and the form prescribed under it. By order dated 28 November 1991 he ordered the cancellation and removal of both caveats, with a stay pending appeal to this court.

It is the decision of the learned judge holding that the second caveat, lodged on 6 August 1991, was invalid that Alrich question in this appeal before us.

This caveat was in the standard form prescribed by s 104 of the Act. The form provides for the identification of the land against which the caveat is lodged, as well as the particulars of the caveator and what is sought to be prohibited. There is also provision for the description of (a) the estate or interest claimed and (b) the grounds of claim. Against the heading `Estate or interest claimed,` the guidance notes say:

Specify estate or interest claimed, eg fee simple; for a leasehold estate, to specify particulars of the term if it is shorter than the whole of the unexpired term.

Against the heading `Grounds of claim`, the guidance notes simply say `Specify the grounds of claim.`

In the caveat filed, against the `Estate or interest claimed` heading, there were inserted the words `Claims interest as purchaser,` and against the `Ground of claim` heading, there were inserted the words:

By virtue of an option dated 8 June 1990 given by the registered proprietor and duly exercised by the caveator on 6 August 1990.

Thus, omitting portions of the form which are not applicable and words not essential to the case, the caveat as lodged reads as follows: `The caveator Alrich Development Pte Ltd claims interest as purchaser by virtue of an option dated 8 June 1990 given by the registered proprietor and duly exercised by the caveator on 6 August 1990 as to the estate or interest of the registered proprietor in the land above described, and hereby prohibits the registration of any instrument affecting the abovementioned land unless the caveator has consented in writing to such registration.`

Grounds of challenge

Mr Jumabhoy challenged the validity of the caveat on the following grounds. First, the estate or interest claimed by Alrich was not stated; merely stating that Alrich claim interest as purchaser is not good enough.

Secondly, the statement of the grounds of claim was wrong in that it gave the impression that the option was granted to and exercised by Alrich when the option in fact was granted to Ho.

Thirdly, the statement of grounds was also wrong in that contrary to what was stated the option was not exercised on 6 August, but on 7 August 1990, and a binding contract did not come into being until 7 August.

As to the first ground, the learned judge held that the interest claimed was sufficiently clearly stated. He said that the statement in the caveat clearly stated that the caveator claimed as purchaser as to the estate or interest of the registered proprietor.

As to the second ground, the learned judge held that it was not necessary for the caveat to state that the option was granted to Ho and that Alrich had exercised it as Ho`s nominees. The learned judge said that Alrich`s claim as purchasers was by virtue of the option which they claim had been properly exercised.

As to the third ground, the learned judge upheld Mr Jumabhoy`s objections. He accepted that the acceptance form was signed by Alrich on 6 August. However, as the acceptance form was not delivered to Mr Jumabhoy`s solicitors until 7 August 1990, the contract did not come into being until then. The learned judge held that the caveat was invalid on this ground. He accepted Mr Jumabhoy`s counsel`s argument, based on a string of Australian authorities, that a strict compliance with the formalities of a caveat is required.

Before us, substantially the same grounds were canvassed.

The New South Wales tradition

The authorities in favour of a strict and meticulous description of the estate or interest claimed are all from New South Wales. They were all decided under s 72(2) of the New South Wales Real Property Act 1900, which at the time provided that every caveat prohibiting dealings `shall state the name and address of the caveator, and shall contain a sufficient description to identify the land and the estate or interest therein claimed by the caveator`. The relevant form apparently also required the caveator to state the nature of the estate or interest claimed, and the facts on which the claim was founded.

In Palmer v Wiley [1906] 23 WN (NSW) 90 a caveat `claiming estate or interest by reason of and under and by virtue of a memorandum of agreement made 30 September 1903 between (three...