Asia Commodity Traders Pte Ltd v Fook Hai Development Pte Ltd

• Jurisdiction: Singapore
• Judge: Chua F A J
• Judgment Date: 16 February 1978
• Neutral Citation: [1978] SGHC 9
• Docket Number: Originating Summons No 24 of 1977
• Date: 16 February 1978
• Year: 1978
• Published date: 19 September 2003
• Plaintiff Counsel: HE Cashin (Murphy & Dunbar)
• Citation: [1978] SGHC 9
• Defendant Counsel: David de Souza (Tang & Tan)
• Court: High Court (Singapore)
• Subject Matter: Innocent misrepresentation,Whether contract could be rescinded for innocent misrepresentation,Contract,Misrepresentation,Recission,Whether subject matter substantially different from contract

By an agreement in writing dated 7 October 1974, (the Agreement), made between Asia Commodity Traders Pte Ltd (the plaintiffs) and Fook Hai Development Pte Ltd (the defendants), the plaintiffs agreed to buy and the defendants agreed to sell the office described in the First Schedule annexed to the said Agreement being part of the premises on the fifth floor of the building known as `Fook Hai Building` in South Bridge Road, for the price of $350,020, subject, inter alia , to cl 27 of the said Agreement and to `The Singapore Conditions of Sale` (revised) (the General Conditions) so far as they were not varied or inconsistent with the terms and conditions of the said Agreement.

The plaintiffs now apply by way of Originating Summons for (1) a declaration that they are entitled to rescind the said Agreement and (2) an order that the sum of $315,018 paid by them to the defendants to be repaid by the defendants to them with interest.

The First Schedule annexed to the said Agreement was as follows:

All that office having an area of approximately 1,591 square feet and for the purpose of identification delineated and edged red and marked No 5.05 on the plan annexed hereto which office is on the Fifth Floor of the building known as `Fook Hai Building` erected on part of the land situate in the Singapore Town in the Island of Singapore and marked on the Government Resurvey Map as Lot 389 of Town Subdivision VI.

The price of $350,020 was arrived at by taking a price of $220 per square feet on the aforesaid area of 1,591 square feet.

Clause 27 of the said Agreement was as follows:

The area shown in the First Schedule hereto is only an estimate. The area shall be measured at floor level and shall include half thickness of common party wall and full thickness of walls along corridor public spaces and full thickness of all external walls and area occupied by structural supports with the said premises shall be included. Provided on the date of completion herein (i.e. upon the issue of the Subsidiary Strata Certificate of Title) that in the event of any difference in the actual area of the said Premises on resurvey and the area stated in the First Schedule hereto there will be an adjustment in the capital payment and/or service charges herein. In the event of any dispute as to the new area of the said Premises the Purchaser shall with the consent of the Vendor and at his own cost and expense procure a Licensed Surveyor approved by the Vendor and the report by the said Licensed Surveyor on the exact area of the said Premises shall be final and conclusive.

The said General Conditions provided, inter alia , as follows:

The Property is believed and shall be taken to be correctly described as to quantity and otherwise and is sold subject to all chief, quit, and other rents and outgoings and to all incidents of tenure, rights of way and other rights and easements (if any) affecting the same and if any error, misstatement, or omission (not of a serious or vital nature nor considerably affecting the value of the property) shall be discovered in the Particulars Special Conditions or Contract the same shall not annul the sale nor shall any compensation be allowed by or to either party in respect thereof.

The plaintiffs have paid to the defendants in pursuance of the provisions of the said Agreement as to payment of instalments of the price a total sum of $315,018. The last instalment payment made by the plaintiffs was on 19 July 1976. The amount still left to be paid is the 10% of the purchase price, that is $35,002.

The office purchased by the defendants was then known as Unit 505. In May 1975, the plaintiffs requested that a brick partition wall be erected in the office. Thereafter the office became two units known as units 505/505A.

By letter dated 11 November 1976, to the plaintiffs, the defendants said:

Please be informed that the Comptroller of Property Tax has revised the abovementioned units No 505/505A which were purchased by you to units 504 (1285 sq ft) and 504A (603 sq ft) respectively. Kindly take note.

The total area purchased by the plaintiffs according to this letter was 1,888 square feet which is 297 square feet more than the estimated contractual area of 1,591 square feet, an increase of approximately 17.82%. The price of the extra 297 square feet at the rate of $220 per square feet would be $65,340.

On 16 November 1976, the plaintiffs` solicitors wrote to the defendants` solicitors in these terms:

Our clients, Asia Commodity Traders Pte Ltd, who are the intended purchasers of the above referred to unit have received a letter directly from Fook Hai Development Pte Ltd dated 11 November 1976, a copy of which was sent to you. By this letter our clients had been informed that the area

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