Chee Peng Kwan and Another v Toh Swee Hwee Thomas and Others

• Court: High Court (Singapore)
• Judge: Teo Guan Siew AR
• Judgment Date: 09 June 2009
• Neutral Citation: [2009] SGHC 141
• Citation: [2009] SGHC 141
• Published date: 19 October 2009
• Plaintiff Counsel: Toh Kok Seng and Chia Aileen (Lee & Lee)
• Defendant Counsel: Harpreet Singh Nehal SC and Ho Shu-Wen Dawn (Drew and Napier LLC)
• Subject Matter: Contract,Damages

[LawNet Editorial Note: This judgment has been amended pursuant to an Order of Court dated 9 September 2009 to remove the first defendant from the case title.]

9 June 2009 Judgment reserved.

Teo Guan Siew AR:

1 The central question in this case is the extent to which a negligent law firm, which failed to exercise the option in a conveyancing transaction on time for its clients, should be liable for the loss suffered by the clients as a result of the transaction falling through. It brings into play in this specific context the application of the principles of remoteness of damage as laid down in the well-known decision of Hadley v Baxendale (1854) 9 Exch 341, which has received continued endorsement by our Court of Appeal most recently in Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd & Anor [2008] 2 SLR 623. It should be stated at the outset that although this action was commenced against six defendants who were solicitors from the law firm, the plaintiffs subsequently chose to discontinue the action against the first, fifth and sixth defendants. The assessment of damages thus involved only the second to fourth defendants, and references to “the defendants” in this judgment should be construed accordingly.

Facts

2 The plaintiffs, who are husband and wife, were interested to purchase a condominium unit in a development known as “The Seafront on Meyer”. This was because this new development was located on the site of what was previously “Meyer Tower”, at which the second plaintiff’s family used to stay before it was sold in a collective sale. At the time of the collective sale of “Meyer Tower”, the second plaintiff’s family had wanted an option to buy back two units in the new condominium to be built, but that was not possible. The family therefore did the next best thing which was to look out for the launch of the new development. Upon realising that CRL Realty Pte Ltd (“the developer”) had taken over the site, they registered their interest to purchase with the developer even before the launch.

3 The intention of the family was to purchase two units in the same development, one for the plaintiffs and another for the second plaintiff’s father and sister. In particular, they wanted the two units to be very proximate to each other because they wished to stay close as a family and also to facilitate childcare arrangements. There was further a desire that the two units be located on high floors because their previous unit (which was on the tenth floor) in the old development “Meyer Tower” did not allow them to have a sea view unobstructed by trees, and also because the first plaintiff was an avid lover of skyscrapers.

4 There was strong demand for “The Seafront on Meyer” and people queued up to five days before the launch on 6 April 2007. The family was second and third in the queue. On the first day of the launch, the second plaintiff’s father and sister booked unit #22-09 while the plaintiffs booked unit #23-09. These were high floor units in the same block with the same facing, and one unit was one floor directly above the other. The purchase price of unit #23-09 was $2.924 million.

5 Both the plaintiffs and the second plaintiff’s father and sister retained the defendants as their solicitors to act for them in the two purchases. Unfortunately and quite inexplicably, the defendants exercised the option for unit #22-09 on the due date of 7 May 2007 but failed to exercise the option for the plaintiffs’ unit #23-09 on time. The option signed by the plaintiffs was delivered by the defendants to the developer one day late on 8 May 2007. The plaintiffs only found out about this when the developer’s solicitors informed them that their signed option had not been received within the exercise period. Thereafter, despite repeated pleas from the plaintiffs as well as the defendants, the developer refused to allow the plaintiffs to exercise the option out of time and proceeded to forfeit 25% of the booking fee.

6 The plaintiffs then engaged another set of lawyers, Lim Soo Peng & Co, who advised them to mitigate their loss by continuing to try and buy the same #23-09 unit from the developer. The defendants also suggested to Lim Soo Peng & Co that such attempts should be made. However, the developer was not willing to release the unit and its solicitors informed the plaintiffs that the developer “had no intention to resell the unit at the moment”. Lim Soo Peng & Co then wrote another letter to the developer appealing on behalf of the plaintiffs, stating inter alia the following:

1.	…
2.	Our clients (Mr Chee Peng Kwan and Ms Jackelyn Sim Hui Lin) had intended to purchase the captioned property (#23-09) so that they could stay in the same block together with their father (father-in-law) and sister (sister-in-law) who had already exercised their own option to purchase the unit directly below (#22-09).
3.	(i) Our clients have no intention to resell the property in the open market.
	(ii) They are not speculators but genuine purchasers who want to live close to their family members.
	(iii) Our clients have young children who need to be taken care of by their grandparents and that is why our client have been so keen to purchase the unit just one floor above their father’s.
4.	(i) Our clients understand that the property market is on the upsurge and your clients have the right to resell the property at a higher price.
	(ii) Our clients are therefore prepared to pay your clients the market price for the property.

This, and a follow-up letter reiterating the same, failed to persuade the developer to change its decision.

7 At the same time, Lim Soo Peng & Co wrote to the defendants setting out the loss and damage suffered by the plaintiffs, including the forfeiture of the booking fee and the difference between the original purchase price of $2.924 million and the new price of unit #23-09 or the price of a similar property. They informed the defendants that the plaintiffs had in view of the rising property market and towards mitigating their losses instructed their estate agent to “repurchase” the same unit from the developer and at the same time look for a similar property in the vicinity. In particular, it was stated in the letters that unless the defendants could confirm that they had made arrangements for the plaintiffs to “purchase back” unit #23-09, the plaintiffs would be seriously considering purchasing a similar unit in “The Seafront on Meyer” from the resale market or a unit from another nearby development known as ‘The Allto”. No less than three letters were sent but no response was forthcoming from the defendants at all.

8 Subsequently, the plaintiffs engaged their present solicitors Lee & Lee to take over conduct of the matter from Lim Soo Peng & Co. From June to December 2007, Lee & Lee continued to write to the developer’s solicitors to attempt to purchase unit #23-09. These were all met with the same reply that the plaintiffs may purchase the unit when it is released to the public but that the developer is unable to commit to the timing of such release or to the pricing. During this same period, the plaintiffs did look for comparable developments and specifically “The Allto”, but these were found to be unsuitable. The second plaintiff explained as follows in her affidavit of evidence-in-chief:

We did not pursue the purchase of any units at The Allto. Allto did not have a 1,604 square feet unit, which was the size of Unit #23-09. The next available size was 2,000 square feet. We would have been accused of not mitigating our losses if we had proceeded to purchase a 2,000 square feet unit at The Allto. The Defendants never responded to our suggestion to consider buying a unit at The Allto and merely restated their suggestion to buy back Unit #23-09. Furthermore, the units at The Allto were less desirable to us. They were closer to the expressway (and therefore noisier) and did not have as good a view as our Unit #23-09. Most importantly, if we were to purchase a unit at The Allto, it would mean our family would be separated from my parents. [emphasis added]

9 Lee & Lee wrote to the defendants again in August 2007 and then in December 2007 seeking a response to the earlier three letters sent by Lim Soo Peng & Co on behalf of the plaintiffs. It was only on 18 December 2007 that the defendants responded, with nothing more than an allusion to their earlier suggestion to Lim Soo Peng & Co that the plaintiffs should mitigate their loss by appealing to the developer to give them the right to purchase the same unit #23-09.

10 In March 2008, Lee & Lee sent another letter to the developer’s solicitors requesting that unit #23-09 be released for sale to the plaintiffs. This was met with the same non-committal reply from the developer. Concurrently, the plaintiffs, realising that they could not wait indefinitely for the same unit, looked for alternative units within the same development and found out that unit #20-12 was available in the sub-sale market for the price of $3.6 million. However, this unit was found in a different block and was three floors lower than unit #23-09. Based on the price difference of $26,000 per floor as set by the developer at the time of launch, unit #20-12 would be worth approximately $78,000 less than unit #23-09. On 25 April 2008, Lee & Lee communicated to the defendants the intention of their clients to buy this alternative unit #20-12 and to claim from the defendants the difference between the purchase price of $3.6 million and the original purchase price of $2.924 million for unit #23-09.

11 But before steps were taken to purchase the alternative unit, on 16 May 2008, the developer suddenly decided to release unit #23-09 for sale to the public at the price of $3.609 million, on a first come first served basis. The plaintiffs’ estate agent, after being notified about this through his company’s marketing department, immediately alerted the...