Bonsel Development Pte Ltd v Tan Kong Kar and Another

CourtHigh Court (Singapore)
Judgment Date15 March 2000
Date15 March 2000
Docket NumberOriginating Summons No 1404 of

[2000] SGHC 40

High Court

Lai Siu Chiu J

Originating Summons No 1404 of 1999

Tan Kong Kar and another
Bonsel Development Pte Ltd

Shanker Kumar (Hoh & Partners) for the plaintiffs

George Pereira (Pereira & Tan) for the defendant.

Burton & Co v English & Co (1883) 12 QBD 218 (refd)

Land Titles Act (Cap 157, 1994 Rev Ed) s 119 (4)

Contract–Contractual terms–Construction of clause in option–Clause providing for completion to be subject to removal of existing caveat over property–Seller failing to remove caveat–Whether clause imposing absolute obligation on seller to remove caveat –Whether seller repudiating option agreement

The defendant developer had on 5 January 1998 entered into an agreement to sell a house to a purchaser (“the original purchaser”).

On 11 January 1999, the defendant granted the plaintiffs an option to purchase the same house. Clause 10 of the option agreement stated that the sale of the house would be subject to the defendant removing an existing caveat lodged against it by the original purchaser. On the same day, the defendant informed the original purchaser that their agreement had been annulled. Two days before the option expired, the defendant informed the plaintiffs that the agreement with the original purchaser was annulled even though the caveat had not yet been removed. In reliance on this, the plaintiffs exercised the option and liquidated their assets to finance the purchase of the property. Subsequently, the defendant informed the plaintiffs that its application to remove the caveat was unsuccessful, with the result that the transaction with the original purchaser was still subsisting and that it could not therefore proceed with the sale of the property to the plaintiffs.

The plaintiffs then commenced this suit to seek: (a) a declaration that the option agreement of 25 January 1999 was valid and binding; (b) a declaration that the said option was repudiated by the defendant on 18 May 1999; and (c) an order that the damages be assessed if not agreed.

Held, allowing the claim:

(1) Clause 10 of the agreement imposed an absolute obligation on the defendant to remove the caveat. Its objective was to provide the defendant with an extension of time for completion should the caveat not be removed by the completion date. In any event, the defendant was obliged by cl 5 to convey the title free from encumbrances, subject to all restrictive covenants and conditions: at [16] and [17].

(2) The factual matrix at the time of the option was entirely consistent with the conclusion that the defendant's obligation to remove the caveat was absolute. The common understanding between the parties was that the earlier sale and purchase agreement had in fact been annulled and there was therefore no basis for the original purchasers to maintain the caveat: at [19].

Lai Siu Chiu J

1 This summons concerned the construction of cl 10 of an option agreement entered into by the parties on 11 January 1999 (“the option”) to purchase a property known as 53 Mariam Walk, Singapore (“the property”). At the conclusion of the hearing, I granted the prayers sought by the plaintiffs, which included:

(a) adeclaration that the option became valid and binding on 25 January 1999;

(b) adeclaration that the said option was repudiated by the defendants on 18 May 1999; and

(c) an order that the damages occasioned be assessed if not agreed.

The defendants have appealed against my decision (CA 201/1999).

The background

2 The plaintiffs, husband and wife, came across an advertisement concerning the sale of terrace houses at Mariam Walk and approached the defendants, the developers of the houses, with a view to purchasing one of them. They were attended by one Stanley Wong, an employee of the defendants, on 11 January 1999 at their home. He presented the plaintiffs with the option and represented that the option was in the standard form except for cl 10, which reads:

The sale of the property is subject to us removing the existing caveats lodged against...

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1 cases
  • Bonsel Development Pte Ltd v Tan Kong Kar and Another
    • Singapore
    • Court of Three Judges (Singapore)
    • 24 August 2000
    ...acceptance of the option, that was it. This can be seen from the following comment of hers [Tan Kong Kar v Bonsel Development Pte Ltd [2000] 1 SLR (R) 498 at [14]]: ... A consequence of this is that there is no necessity to read into cl 10 a duty on the defendants [the appellants] to co-ope......

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