Chileon Pte Ltd v Choong Wai Phwee and Others (Trustees of Cheng Liam Um Vegetarian Temple)

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 07 March 2001
• Neutral Citation: [2001] SGCA 14
• Date: 07 March 2001
• Subject Matter: Words and Phrases,Whether order issued by Comissioner for purpose of sale of property could pass good title to property,Whether purchasers estopped from rescinding sale and purchase agreement-Specific performance,s 30(1) Charities Act (Cap 37, 1995 Ed),Power of trustees to sell property,Charitable trusts,Statutory power of Commissioner of Charities authorising sale,"Any action proposed or contemplated",Equity,s 30 Charities Act (Cap 37, 1995 Ed),Estoppel,Charities,Lack of express power of sale,Equitable estoppel
• Docket Number: Civil Appeal No 105 of 2000
• Published date: 19 September 2003
• Defendant Counsel: Foo Maw Shen, Keoy Soo Khim and Ng Wai Hong (Ang & Partners)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Quek Mong Hua and Adeline Foo (Lee & Lee)

(delivering the judgment of the court): This is an appeal against the decision of GP Selvam J, in which he ordered that the sale and purchase agreement dated 30 November 1999 made between the appellants and the respondents for the sale of the property, No 26 Shanghai Road, be specifically performed and carried out.

Background

The dispute between the parties arose from an en bloc sale and purchase of nine parcels of land known as Nos 22, 26, 28, 30, 32, 34 and 36 Shanghai Road and Lots 25N and 958L of TS 24, Shanghai Road (collectively referred to as `the Shanghai Road properties`). By separate agreements made with the respective owners of these properties (collectively referred to as `the vendors`) on 30 November 1999, the appellants agreed to purchase all these properties. All the sale and purchase agreements contained identical terms and conditions in all material respects, and the aggregate purchase price of all the properties came to $23.8m.

One of the properties, No 26 Shanghai Road (`the Property`), houses a temple known as Cheng Liam Um Vegetarian Temple (`the temple`), and the legal owners are the trustees of the temple. This property was conveyed to the trustees for the time being of the temple on 19 July 1927 upon the following trusts:

... To Hold the same unto the Trustees in fee simple Upon Trust to manage the said land and premises and permit the same to be occupied for the purposes of the Cheng Liam Um Vegetarian Temple and if not so occupied to let the same and to receive the rents profits and income thereof and pay and apply the same to the use and benefit of the said Cheng Liam Um Vegetarian Temple and the members thereof.

The respondents are the present trustees of the temple, and they were the ones who entered into the sale and purchase agreement with the appellants with respect to the Property (`the sale and purchase agreement`).

The sale and purchase agreement provided for a completion date falling on 21 March 2000. It also provided that the completion date would be extended by a further eight weeks, without any interest being charged on the purchase price, if the sale and purchase of all the Shanghai Road properties could not be completed simultaneously. The extended completion date fell on 16 May 2000.

On 20 March 2000, the solicitors for the appellants at that time, M/s David Ong & Partners (`David Ong`), discovered that the trust instrument for the temple contained an express power of letting but not of sale. As a result of this absence of a power of sale, the completion of the sale and purchase did not take place on 21 March 2000, the initial completion date, and the completion was extended to 16 May 2000. On 23 March 2000, the solicitors retained by the vendors, M/s Rodyk & Davidson (`Rodyk`), applied to the Commissioner of Charities (`the Commissioner`) for an appropriate order under s 30 of the Charities Act (Cap 37, 1995 Ed) (`the Act`) to enable them to sell the Property. On 31 March 2000, the Commissioner granted an order (`the s 30 order`) authorising the respondents to:

(1) sell the property known as Cheng Liam Um Vegetarian Temple at 26 Shanghai Road, Singapore 248195 to Chileon Pte Ltd; and

(2) pay all expenses in relation to the sale out of the sale proceeds; and

(3) apply the balance of the sale proceeds towards the purchase of an alternative property for the use and benefit of the Temple and its members.

The s 30 order was transmitted by Rodyk to David Ong on 4 April 2000. Apparently, David Ong found this order acceptable and confirmed that the completion date had been extended to 16 May 2000 and requested Rodyk to lodge the s 30 order with the Registry of Deeds and to provide them with the registration particulars as soon as possible. However, they later informed Rodyk that the appellants` mortgagees found that the s 30 order was inadequate and that they required the s 30 order to be amended (i) to state that the sale and purchase agreement was ratified retrospectively, and (ii) to include a reference to the conveyance to be executed. Rodyk replied on the same day, 5 April 2000, stating their view that the amendments were unnecessary and that the Commissioner was prepared to give a letter of confirmation clarifying the points raised by the appellants` mortgagees.

On 6 April 2000, M/s Lee & Lee (`Lee & Lee`), representing the appellants` mortgagees, informed David Ong and Rodyk that the s 30 order was not only inadequate but also inappropriate, because the Commissioner should have made an order pursuant to s 24 of the Act instead of s 30. Rodyk replied on the same day, taking the stand that the s 30 order was sufficient and that an order under s 24 was unnecessary.

Under s 24 of the Act, the Attorney General`s consent was necessary before the Commissioner could exercise his powers. After various discussions and correspondences, the parties agreed that Lee & Lee would write to the Attorney General to seek his consent for an order under s 24 to be made. Accordingly, a request was made to the Attorney General and on 28 April 2000, the Attorney General gave his consent.

Despite this, as of 5 May 2000, the Commissioner stood firm on his stand that the s 30 order was sufficient and that an order under s 24 was unnecessary. However, the Commissioner was willing to meet with the parties on 6 May 2000 to discuss the matter. From the correspondence passing between Rodyk and Lee & Lee it appeared that the appellants` representatives were not able to attend the meeting on 6 May 2000 or on subsequent days of the week. Eventually, a meeting was scheduled for 13 May 2000. That was a Saturday, and under the sale and purchase agreement the date of completion was 16 May 2000 which was a Tuesday. As the learned judge said, as from the day of that meeting the parties had only one working day to resolve the outstanding problem.

Be that as it may, the parties met with the Commissioner on 13 May 2000 and the Commissioner maintained his original stand. Lee & Lee said that they would take their clients` instructions and respond by 16 May 2000 whether their clients were prepared to take a commercial decision and accept the s 30 order together with a letter of confirmation from the Commissioner. On 16 May 2000, Lee & Lee confirmed to Rodyk and the Commissioner that their clients, the appellants` mortgagees, would not proceed unless an order under s 24 was obtained.

On 17 May 2000, David Ong on behalf of the appellants rescinded the sale and purchase agreement on the ground that the date of completion (that is, 16 May 2000) had elapsed. They also similarly rescinded the other agreements made with the vendors of the remaining Shanghai Road properties. On the same day, the Commissioner agreed to compromise and issued an order under s 24 of the Act. Unfortunately the order did not help to resolve the dispute, as by then the appellants had rescinded the agreements and were not prepared to withdraw the rescission.

By OS 764/2000, the respondents sought a declaration that the appellants were in breach of their obligation to complete and sought an order of specific performance against them. The other vendors also took similar proceedings against the appellants. They applied by OS 763/2000 for similar reliefs. As a counter measure, the appellants commenced an action in Suit 335/2000 against all the vendors for the return of the deposit of $2.38m. The action was held back, pending the hearing of the two originating summonses. The dispute in all these proceedings centred on the sufficiency of the s 30 order for the purpose of the sale of the Property. The summonses were heard before GP Selvam J (see [2000] 4 SLR 340), and he allowed the applications and granted the order sought to the respondents and the other vendors.

The decision below

The judge held that there was a valid and enforceable sale and purchase agreement made with respect to the Property. It was not void, but voidable at the instance of the beneficiary if it was shown to be not beneficial to the charity. However, in this case the sale was eminently beneficial to the charity.

The judge held that the s 30 order issued by the Commissioner was valid. It was prospective in operation in that it authorised the sale which had not been completed, and by necessary implication it authorised the execution of the conveyance. There was nothing to ratify because the sale and purchase agreement was valid and binding in the first place.

Therefore, the judge held that the respondents were ready, able and willing to complete the sale from the time the appellants were given sight of the s 30 order. The appellants were therefore in breach of their obligation to complete and the respondents were entitled to an order for specific performance.

In addition, the judge held that the principle of equitable estoppel also applied. The vendors allowed the appellants to supplicate the Commissioner to issue a new order under s 24, without prejudice to their position that the s 30 order was sufficient. At the meeting with the Commissioner on 13 May 2000, in which the representatives of all the parties were present, it was agreed that Lee & Lee would respond by 16 May 2000 with their clients` instructions on whether they were prepared to accept the s 30 order together with a letter of confirmation from the Commissioner. In the event that they were not agreeable, the Commissioner would review the matter and consider if a s 24 order would be issued. The implication arising from this was that once Lee & Lee responded on 16 May 2000 that their clients would not proceed unless an order under s 24 was obtained, the appellants would not withdraw from the sale until the Commissioner was given the opportunity to reconsider the matter. By agreeing that Lee & Lee would inform the Commissioner of the mortgagees` decision on 16 May 2000 (which was the completion date), they must, by necessary implication, have agreed to a reasonable extension.

The judge...