Cheong Kok Leong v Cheong Woon Weng

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JA
• Judgment Date: 15 August 2017
• Neutral Citation: [2017] SGCA 47
• Court: Court of Appeal (Singapore)
• Hearing Date: 02 August 2017
• Docket Number: Civil Appeal No 180 of 2016
• Plaintiff Counsel: Paul Tan, Daniel Gaw and David Isidore Tan (Rajah & Tann Singapore LLP)
• Defendant Counsel: Loh Kia Meng and Quek Ling Yi (Dentons Rodyk & Davidson LLP)
• Subject Matter: Contract,Formalities,Illegality and public policy,Land,Interest in land
• Published date: 19 August 2017

Andrew Phang Boon Leong JA (delivering the grounds of decision of the court):

This was an appeal against the decision of the High Court judge (“the Judge”) in Cheong Woon Weng v Cheong Kok Leong [2016] SGHC 263 (“the Judgment”). In essence, the Judge: (a) found that the Appellant held a private property registered in his name (“the Property”) on trust for the Respondent in equal shares with the Appellant, pursuant to an oral agreement (“the Oral Agreement”) and related written agreements between them; and (b) dismissed the Appellant’s counterclaim for the return of monies that he had allegedly advanced to the Respondent. The Judge also found that a sum of $200,000, which the Appellant had received from the Respondent and applied to the purchase of the Property, was an investment (as claimed by the Respondent), and not a loan (as claimed by the Appellant). This entitled the Respondent to a half-share of the Property as a tenant-in-common, a half-share of the net rental proceeds from the Property, and a half-share of the net sale proceeds of the Property.

After carefully considering the parties’ submissions, we agreed wholly with the decision of, and the reasons given by, the Judge in the Judgment in granting the Respondent’s claim for an interest in the Property as well as in dismissing the Appellant’s counterclaim. We also rejected the new arguments raised by the Appellant on appeal, which were as follows: first, that there was no admissible evidence to establish the Respondent’s alleged interest in the Property because the Oral Agreement was not evidenced in writing and a related written agreement titled “Collateral Agreement” had not been stamped; second, that the Oral Agreement was in any event void for illegality and/or breach of public policy because the Respondent had been the owner of a Housing and Development Board (“HDB”) flat at the time when he entered into the Oral Agreement, and the Oral Agreement had accordingly been made to circumvent the prohibition on the concurrent ownership of private property and a HDB flat; and third, that the Collateral Agreement, which he had signed, was invalid because he had been labouring under a unilateral mistake as to its effect.

We therefore dismissed the appeal with costs. In these grounds of decision, we elaborate on why we rejected the new arguments that were raised by the Appellant on appeal.

Admissibility of the Oral Agreement and the Collateral Agreement

Turning to the first new argument, the Appellant submitted that the Oral Agreement pursuant to which the Respondent had an interest in the Property was inadmissible under ss 6(d) and 7(2) of the Civil Law Act (Cap 43, 1999 Rev Ed) (“the CLA”). In addition, it was submitted that the Collateral Agreement was inadmissible because it was an instrument chargeable with stamp duty that had not been stamped under the Stamp Duties Act (Cap 312, 2006 Rev Ed) (“the SDA”).

In our view, s 6(d) of the CLA (“s 6(d)”) did not preclude the Respondent from bringing the present action on the Oral Agreement. The provision itself reads as follows:

Contracts which must be evidenced in writing

6. No action shall be brought against — … (d) any person upon any contract for the sale or other disposition of immovable property, or any interest in such property; …

unless the promise or agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith or some other person lawfully authorised by him.

What s 6(d) regulates is a “contract for the sale or other disposition of immovable property, or any interest in such property” [emphasis added]. Given the fact that the Oral Agreement appeared to have been concluded even before the Appellant purchased the Property as well as the nature of (and the circumstances under which) this agreement had been concluded, there might have been a possible issue as to whether or not s 6(d) was applicable in the first place. However, it was unnecessary for us to decide this particular issue. Let us elaborate.

Even assuming that the Oral Agreement was a contract for the “sale or other disposition” of an interest in the Property within the meaning of s 6(d), this provision requires only that such a contract be evidenced in writing, while the contract itself need not be in writing. We agree with the observations in Tham Chee Ho and Goh Yihan, “Formalities and the Effect of Non-compliance” in The Law of Contract in Singapore (Academy Publishing, 2012) ch 8 at para 08.058, citing Christina Lee (mw) v Eunice Lee (f) and Another [1992] SGHC 32 (affirmed in Lee Christina v Lee Eunice and another (executors of the estate of Lee Teck Soon, deceased) [1993] 2 SLR(R) 644):

In order to satisfy section 4 of the English Statute of Frauds 1677 [which corresponds with s 6(d)], it is clear that the contract itself need not be in writing. Mere written evidence of the contract in a memorandum (or series of memoranda) is sufficient. However, as a rule, the writing(s) relied on to satisfy the Act must contain all the terms of the parties’ agreement. In the context of a contract for the sale or other disposition of immovable property or any interest in such property, the memorandum must specify the parties, the property, the price plus any other provisions. [emphasis in original]

In so far as the Oral Agreement was a contract for the “sale or other disposition” of an interest in the Property, we were of the view that the Collateral Agreement – which was signed by the Appellant and which specified the identity of the parties, the share of the Respondent in the Property, and the consideration paid by the Respondent for such a share – constituted a sufficient memorandum of the Oral Agreement for the purposes of s 6(d). We reproduce the terms of the Collateral Agreement, as follows:

This acknowledgement is collateral to the memorandum of loan dated 28/7/2000 signed by Cheong Kok Leong [ie, the Appellant] in favour of Cheong Woon Weng [ie, the Respondent], whereby Cheong Kok Leong acknowledges a contribution of S$200,000 towards the purchase price of the Property known as Blk 47 Hillview Avenue, #08-04 Hillington Green, Singapore (hereinafter called “the Property”).

In consideration of the said contribution, the parties hereto acknowledge that Cheong Woon Weng has a share in the Property in the proportion of the amount of the contribution vis-à-vis the purchase price of $880,440.00.

In the event that the Property is sold, Cheong Woon Weng shall be entitled to half a share in the net profits (ie profits less taxes, interest, reasonable expenses etc), or loss, as the case may be.

Cheong Kok Leong shall not sell the property unless Cheong Woon Weng has agreed, in writing that he agrees with the sale at the price agreed.

This share in the Property is not in addition to Cheong Woon Weng’s right to repayment of his contribution towards the purchase price.

Dated this the 28 day of July 2000

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Signed by Cheong Kok Leong

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Signed by Cheong Woon Weng

[emphasis added]

In any event, equity allows a valid contract to be enforced by a party who has partly performed it, and s 6(d) did not abolish this doctrine of part performance in relation to contracts in respect of land (see the decision of this court in Joseph Mathew and another v Singh Chiranjeev and another [2010] 1 SLR 338 at [61] and [63]). The Respondent had in fact partly performed the Oral Agreement by advancing $200,000 to the Appellant and could therefore enforce it.

Accordingly, s 6(d) did not prevent...