Aqua Art Pte Ltd v Goodman Development (S) Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 25 May 2010
• Date: 25 May 2010
• Docket Number: Suit No 642 of 2009
• Court: High Court (Singapore)

Aqua Art Pte Ltd

Plaintiff

and

Goodman Development (S) Pte Ltd

Defendant

[2010] SGHC 161

Choo Han Teck J

Suit No 642 of 2009

High Court

Land–Sale of land–Contract–Foreign buyer entered into agreement for sale of residential property–Whether deposit recoverable where contract for sale of land voided by reason of s 3 Residential Property Act (Cap 274, 2009 Rev Ed)

This was a suit by the plaintiff company against the defendant for a return of the plaintiff's deposit upon the court's declaration that the parties' contract was null and void.

The director of the plaintiff went to see five shophouses with the intention of purchasing some of them for his companies' restaurant business. As he was a permanent resident, he could only buy residential properties with approval from the land authorities. He alleged that this fact was known to the defendant's property agent and that she confirmed that the shophouses were zoned commercial. The defendant's property agent denied this, and testified that neither the plaintiff's director nor his property agent had asked her if the property was zoned commercial. She said that she told the plaintiff's director that the upstairs unit was residential and the downstairs unit commercial; that he was very thorough in his inspection; and that he also took several photographs of the five shophouses.

The plaintiff then signed the option to purchase and lodged a caveat against the shophouses. Although the plaintiff was unable to proceed with the purchase because it was a foreign-owned company, it refused to remove the caveat and the defendant applied to court to compel it to do so. The court declared the option to be null and void by reason of s 3 of the Residential Property Act (Cap 274, 2009 Rev Ed) ( the Act ). In this suit, the plaintiff asked for the return of its deposit on the ground that it was induced into the contract by a misrepresentation made by the defendant's director and property agent.

Held, dismissing the plaintiff's claim:

(1) When the balance of the deposit was paid, the plaintiff knew what the zoning was. The indications from the photographs and inspection had to have alerted both the plaintiff's director and his property agent. Furthermore, there was a lapse of about three weeks from the payment of the option fee and the payment of the remainder of the deposit. It was not accepted that the plaintiff would pay the deposit without verifying whether the shophouses were zoned commercial. The plaintiff had professionals in law and property, the experience and business acumen of its director, and time, to verify the zoning of the shophouses. Therefore, the plaintiff's claim on misrepresentation failed: at [7].

(2) Given the serious nature of a breach under s 3 of the Act, the party seeking the court's assistance in recovering money paid under such a contract had to at least be able to show that he had a strong case and that it would only be fair and just that he recovered his money. In this case, the plaintiff's director knew he was unable to buy residential property, he probably knew that the shophouses were residential property, and, in any event, the evidence indicated clearly that it would not be safe for him to pay over the money without verification or contractual protection. Therefore, both equity and law were against granting relief to the plaintiff for the remainder of the deposit: at [7] and [8].

(3) So far as the option fee was concerned, there was no doubt that it was the price paid for the option, separate from the contract for sale. Therefore, the defendant was entitled to the option fee paid: at [8].

Cheng Mun Siah v Tan Nam Sui [1979-1980] SLR (R) 611; [1980-1981] SLR 349 (refd)

Lim Xue Shan v Ong Kim Cheong [1990] 2 SLR (R) 102; [1990] SLR 803 (refd)

Tan Cheow Gek v Gimly Holdings Pte Ltd [1992] 2 SLR (R) 240; [1992] 2 SLR 817 (refd)

Residential Property Act (Cap 274, 2009 Rev Ed) ss 3, 36

Pereira Kenetth Jerald (Advocatus Law LLP) for the plaintiff

Ng Hui-Li Felicia and Yeo Piah Chuan (ComLaw LLC) for the defendant.

Judgment reserved.

Choo Han Teck J

1 Michael Ma ( Michael ) was a director of the plaintiff company which has the business of a restaurateur. The plaintiff was a member of the Indochine Group of companies and has an in-house legal counsel who was Terry Toh. Michael himself was a director of 26 companies...