Ang Boh Seng and Others v Ang Kok Kuan

• Court: High Court (Singapore)
• Judgment Date: 10 September 1992
• Docket Number: Suit No 1283 of 1985
• Date: 10 September 1992

Ang Boh Seng and others

Plaintiff

and

Ang Kok Kuan

Defendant

[1992] SGHC 238

K S Rajah JC

Suit No 1283 of 1985

High Court

Land–Conveyance–Option to purchase–Defendant only possessed equitable interest in land–Whether defendant entitled to refund of deposit–Option to purchase contracted on basis that defendant possessed title to convey to plaintiffs–Vendor incapable of producing good title–Defendant unable to convey title to plaintiffs–Land–Sale of land–Conditions of sale–Legal requisitions–Sale subject to satisfactory replies to all requisitions under cl 3 of agreement–Property affected by road widening proposals–Unsatisfactory legal requisition–Whether plaintiff had the right to annul the sale–Whether plaintiff gave clear and unequivocal notice to defendant

The plaintiffs' claim is for a refund of $59,000 paid to the defendant as a deposit upon signing an agreement for the purchase of the property. The owners of the property gave an option to the defendant for the purchase of the property at $510,000. The defendant paid $5,000 as option fee to the owners. It was stated in cl 12 of the option that the owners would pay the defendant 2% commission on successful completion of the sale of the property. The plaintiffs were persuaded by the defendant to have the same solicitor (“Mr Yong”) to act for them. The plaintiffs told Mr Yong that the property should not be affected by road widening, drainage, MRT, sewerage works, etc. The defendant told the plaintiffs that they did not have to buy property that was affected. The plaintiffs entered into a sale and purchase agreement (“the agreement”) with the defendant for the purchase of the property from the defendant as vendor at the price of $590,000. Under cl 3 of the agreement, the sale was conditional upon the purchaser receiving satisfactory replies to all requisitions.

Subsequently, the plaintiffs wanted to pay the balance of the 90% and complete the purchase. Mr Yong told the parties that the property was affected by a proposed road widening scheme according to the road interpretation plan (“RIP”) and advised the plaintiffs not to buy the premises. The plaintiffs in the presence of the defendant told Mr Yong that they did not want to purchase the affected premises. However, Mr Yong did not send a letter of rescission to the owners on behalf of the plaintiffs.

The owners' solicitors sent a letter to Mr Yong, who was acting for the plaintiffs and the defendant, and gave 21 days' notice to complete the purchase of the premises. Mr Yong discharged himself from acting for the plaintiffs and served 21 days' notice on the plaintiffs in his capacity as solicitor for the defendant.

The issues here were: (a) whether the road interpretation plan (“RIP”) issued by the Roads Department of the PWD is a reply to requisitions; (b) whether the RIP is an unsatisfactory requisition; (c) if the RIP is unsatisfactory, whether the plaintiffs have annulled the sale pursuant to cl 3 of the agreement; (d) whether the defendant was in any position to pass title to the plaintiffs on the completion date; (e) whether there is any substance in the defendant's counterclaim; and (f) whether the defendant is liable to refund the 10% deposit to the plaintiffs.

The plaintiffs' case was that they signed the agreement and the option when they were placed before them as documents they had to sign to purchase the property. On the other hand, the defendant's version was that the plaintiffs were fully aware that the defendant was making $80,000 from the transaction and that the option and the agreement must be read together, although the parties to the agreements were different. In addition, the defendant argued that the solicitor acting for the parties was told of the agreement arrived at by the parties and advised that payment of the $80,000 be made on completion. The solicitor was not happy with the arrangement and did not sign as a witness when the option was signed although he was acting for both the parties. Further, the plaintiffs were suing the defendant on the agreement entered into between the plaintiffs and the defendant and for the $59,000 paid to the defendant under the agreement and the defendant claimed that the plaintiffs should claim the $59,000 from the owners, or that the option and the sale and purchase agreement must be read together in aid of the defendant. The defendant also counterclaimed that he had suffered loss of $80,000 and his 10% deposit of $51,000 to the owners making a total of $131,000.

Held, allowing the claim and dismissing the counterclaim:

(1) There was no agreement in which the defendant had paid $5,000, obtained an option to purchase the property at $510,000 and sold his rights and interest by allowing the plaintiffs to exercise the acceptance of the option. The solicitor did not make a mistake when he chose not to witness the signing of the option because he was aware that the agent was doing things that may go wrong and not in keeping with his office as agent. Also, the plaintiffs should not claim the $59,000 from the owners and the option and the agreement need not be read together in aid of the defendant: at [17], [19] and [20].

(2) The RIP formed part of the requisitions under cl 3 of the agreement. The plaintiffs from the outset made it known to the defendant and to the solicitor who was acting for the defendant and the plaintiffs that they would not buy the property if it were subject to road widening proposals and Mr Yong told the parties that cl 3 of the agreement provided such a safeguard. The intention of the parties was clear to the solicitor, the plaintiffs and the defendant. The objective test from the point of view of reasonably determined purchasers should be applied to cl 3 of the agreement: at [28] and [31].

(3) Based on the evidence, the intention of the plaintiffs not to buy the affected property from the outset, a potential loss of 16% of the land area and a reduction of $96,000 in the purchase price were not negligible. The legal requisition was unsatisfactory. The plaintiff had a right to annul the sale pursuant to cl 3 of the agreement: at [35].

(4) The plaintiffs gave clear and unequivocal notice to the defendant and his solicitor that they were not proceeding with the purchase of the property because the legal requisition was not satisfactory. The notice to Mr Yong must be regarded as notice that precluded the defendant from relying on his own ignorance, if any. The defendant must be taken to have received the notice from Mr Yong. In addition, the demand for a refund of the deposit on the property that was affected made it clear that the plaintiffs effectively annulled the sale: at [36] and [38].

(5) An option to purchase land created an equitable interest in the land. The defendant entered into an agreement with the plaintiffs on the strength of the equitable interest and contracted that he would be able to convey title to the plaintiffs. On the completion date, the defendant was in no position to pass title to the plaintiffs. Also, the purchaser was entitled to the return of the deposit if the vendor was incapable of producing a good title. Clause 3 of the agreement required a satisfactory reply to all requisitions, this included “title”: at [41] and [43].

(6) An agent was liable under contract if he entered into the contract with a view to undertaking personal liability. On the facts, the agreement entered into by the defendant and the plaintiffs made the defendant personally liable to the plaintiffs as an agent undertaking personal liability. The plaintiffs were entitled to a refund of the $59,000 by the defendant: at [48] and [49].

(7) As the...