Chan Ah Beng v Liang and Sons Holdings (S) Pte Ltd and another application

• Judge: Chao Hick Tin JA
• Judgment Date: 29 June 2012
• Neutral Citation: [2012] SGCA 34
• Citation: [2012] SGCA 34
• Docket Number: Civil Appeal No 88 of 2011 and Summons No 5443 of 2011
• Published date: 13 July 2012
• Hearing Date: 12 March 2012,27 February 2012
• Plaintiff Counsel: Yeh Siang Hui (J S Yeh & Co) and Ng Wai Keong Timothy (Timothy Ng LLC)
• Date: 29 June 2012
• Defendant Counsel: Tan Hee Joek and Tan Hee Liang (Tan See Swan & Co)
• Court: Court of Appeal (Singapore)
• Subject Matter: Breach,Measure of damages,Contract,Damages

Andrew Phang Boon Leong JA (delivering the judgment of the court): Introduction

This is an appeal against the decision of the High Court Judge (“the Judge”) in Originating Summons No 251 of 2011 filed on 30 March 2011 (“the OS”) (see Liang & Sons Holdings (S) Pte Ltd v Chan Ah Beng [2011] SGHC 236 (“the GD”)).

We should note, at the outset, that the Appellant had appointed M/s Kertar & Co (“KC”) to act for him in separate subordinate courts proceedings and also in the OS before the Judge (see [10]–[11] below). However, the Appellant discharged KC on 17 June 2011 and chose to appear in person before the Judge at the final hearing on 27 June 2011. Subsequently, the Appellant appointed M/s J S Yeh & Co (“JSY”), who had always acted for the Appellant in the conveyancing matter, to also act for him in this present appeal.

The facts Background to the sale

The Appellant was the owner and occupier of the premises known as Apartment Block 201C, Tampines Street 21 #01-16, Singapore 523201 (“the Property”). He occupied and used the Property for his business of selling market produce.

On 26 July 2010, the Appellant granted the Respondent an option to purchase the Property at $1.2m in exchange for an option fee of $12,000 (“the Option”).¹ The Respondent exercised the Option on 12 August 2010.

Relevant terms of the Option

Clauses 10.1, 9, 8, 6, 10.3 and 4 of the Option are central to the present dispute and will be reproduced in full. Clause 10.1 of the Option states as follows: The sale and purchase of the Property shall be subject to:- (i) the written approval from the [Housing Development Board (“HDB”)] and such terms and conditions as the HDB may impose from time to time at its absolute discretion;

...

Clause 9 of the Option states as follows:

The Vendor and the Purchaser shall use their best endeavours to obtain the HDB’s approval to the sale and purchase herein and the Vendor shall proceed with the submission of the HDB application form to the HDB within fourteen (14) days from the date of exercise of the Option. The administration fee amounting to S$535.00 payable to the HDB shall be borne by the Vendor.

Clause 8 of the Option states as follows:

The sale and purchase shall be completed:-

(i) within [fourteen] (14) weeks from the date of exercise of this Option; or (ii) within fourteen (14) days upon receipt of the HDB’s approval; or (iii) in the event that provisional approval is granted by the HDB, within fourteen (14) days upon receipt of the HDB’s letter confirming that all unauthorised works in the Property has been rectified by the Vendor;

whichever date is later.

Clause 6 of the Option states as follows:

The sale is subject to the Purchaser giving the vendor a tenancy term of one (1) year only for a monthly rental of $8,000.00 with effect from the date immediately after the contractual date of completion.

Clause 10.3 of the Option states as follows:

Without prejudice to any of the aforesaid conditions, in the event that the HDB does not grant written approval to the sale and purchase herein due to circumstances beyond the control of either parties and the parties herein having done all that is necessary for the HDB’s approval, the Agreement shall forthwith be treated as null and void and the Deposit paid herein shall forthwith be refunded to the Purchaser without any interest compensation or deduction whatsoever and neither party shall have any claim or demand against the other whether for costs damages compensation or otherwise.

Finally, Clause 4 of the Option states as follows:

The sale is subject to “THE SINGAPORE LAW SOCIETY’S CONDITIONS OF SALE 1999” so far as the same is applicable to a sale by private treaty and is not varied by or inconsistent with the special conditions herein. In the event of any inconsistency, the terms herein shall prevail. [emphasis in original].

Clause 4 of the Option essentially incorporated the Singapore Law Society’s Conditions of Sale 1999 (“Conditions of Sale”) by reference. In particular, Conditions 6 and 8.2 are material to this case, and read as follows: Outgoings, Rents and Profits until Completion 6.1 The Vendor must discharge the outgoings down to and including the date fixed for completion. 6.2 Subject to Condition 6.3, after the date fixed for completion the Purchaser – (a) must discharge all outgoings; and (b) will be entitled to all the rents and profits or possession. 6.3 The Purchaser is not to be let into actual possession or receipt of rents and profits until the date of actual completion of the purchase. 6.4 Where necessary, the outgoings, rents and profits are to be apportioned between the parties.

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Late Completion Interest ...

8.2 Interest Payable by Vendor 8.2.1 If – (a) the sale is not completed on or before the date fixed for completion; and (b) the delay in completion is due solely to the default of the Vendor,

he must pay interest (as liquidated damages) commencing on the day following the date fixed for completion up to and including the day of actual completion. Interest will be calculated on the purchase price at 10% per annum.

The impediments to the sale

On 6 September 2010, the Respondent’s solicitors, M/s Tan See Swan & Co (“TSS”), submitted the application for resale/transfer of the Property to HDB.² HDB inspected the Property on or about 15 September 2010. On 9 November 2010, HDB wrote to both JSY and TSS stating that it was unable to process the resale application unless and until the Appellant rectified the following breaches that were discovered: Unauthorised cold room (chiller); Unauthorised brackets installed at frontage of the Property; Excessive display of goods at the common area; and Tampines Town Council’s (“the Town Council”) action against the Appellant in DC Suit No 3475 of 2010 (“the DC Suit”) for trespass arising from the display of goods at the common area without a Temporary Occupation Licence.³ On 16 November 2010, HDB highlighted a further impediment to the sale of the Property, namely that the Appellant owed rental arrears in relation to two other HDB commercial properties that he occupied.⁴ The quantum of arrears was confirmed by HDB on 13 December 2010.⁵

On 17 December 2010, TSS first gave notice to JSY that the Respondent would charge interest for late completion pursuant to Condition 8.2 of the Conditions of Sale (“Condition 8.2”) (reproduced above at [6]).⁶ We pause to note – parenthetically – that Condition 8.2 is presently Condition 9.2 of the Law Society’s Conditions of Sale 2012 in a slightly amended form.

We agree with the Appellant that the main impediment to the sale was the DC Suit as it was the definitive cause for HDB to withhold its consent to the sale of the Property. Hence, we do not intend to restate the unfolding of events in relation to the rest of the impediments. It suffices for the purposes of this appeal to note that the remaining impediments ceased being an issue in relation to the sale at various dates between the scheduled date of completion (18 November 2010) to the date that the OS was filed (30 March 2011).

The major impediment to the sale – the DC Suit

The Respondent’s director, Chuang Mui Yau (“Chuang”), exhibited the cause papers of the Town Council’s claim against the Appellant in the DC Suit in her third affidavit dated 21 June 2011.⁷ The pertinent details of the DC Suit are as follows: The Appellant had been issued eleven summonses between June 1993 and April 2009 for obstructing common property (all of which were compounded); Since 1 January 2007, the Appellant had required but had not been granted a Temporary Occupation Licence to display goods at the outdoor display area at the Property’s frontage; The action for trespass in the DC Suit commenced on 14 October 2010; On 10 November 2010, the Appellant through KC filed a defence and counterclaim, inter alia, denying the Town Council’s right to sue him; The Town Council obtained an order for an injunction against the Appellant on 10 November 2010, restraining him from using the common area at the Property’s frontage to display his goods; As a result of the Appellant’s persistent default in complying with the injunction order, a committal order was ordered against him on 18 March 2011; and On 27 April 2011, the Town Council obtained default judgment against the Appellant for his failure to comply with an earlier “unless” order.

The Appellant’s persistent default in complying with the injunction order dated 10 November 2010 is evidenced by the following events: On 24 May 2011, at the second hearing before the Judge, KC showed to the Judge two photographs purportedly proving that the common area was clear of obstructions;⁸ However, on 25 May 2011, the Town Council’s solicitors wrote to KC and copied to TSS stating, inter alia, that the Appellant was found to have continued using the common area during the inspection on 23 May 2011;⁹ KC replied to the Town Council’s solicitors on 25 May 2011, reiterating that the Appellant had cleared all obstructions and enclosing the two photographs shown to the Judge at the second hearing on 24 May 2011 that purportedly proved that the common area was free of obstructions.¹⁰ KC also wrote to HDB, repeating the contents of their letter to the Town Council’s solicitors and requested approval of the sale;¹¹ HDB replied on 25 May 2011 to both parties’ solicitors stating that it had been advised by the Town Council’s solicitors that the obstruction to the common area had not been removed. Hence, the Appellant’s application for the transfer of the Property was rejected. The Respondent was advised to resubmit the application after the Appellant had settled the DC Suit with the Town Council;¹² and On the Respondent’s behalf, Chuang took it upon herself to visit the Property to verify the situation. He took...