Chip Thye Enterprises Pte Ltd v Development Bank of Singapore Ltd

• Jurisdiction: Singapore
• Judge: Goh Joon Seng J
• Judgment Date: 02 November 1993
• Neutral Citation: [1993] SGHC 261
• Date: 02 November 1993
• Subject Matter: Conditions,Equitable lien,Contract,Whether defendants constructive trustees of the balance funds by virtue of s 68 of the Land Titles Act (Cap 157),Credit and Security,Lien,Claim for deposit and damages from defendants,Whether plaintiffs entitled to balance of sale proceeds,No right to equitable lien on proceeds of mortgagee sale when no right to specific performance existed,Mortgagee sale by defendants,Specific performance,Purchaser's lien,Right of plaintiffs to waive condition to contract if condition for their exclusive benefit,Specific performance of conditional agreement,Contractual terms,Action against owner for refund of deposit and damages amounted to rescission of agreement,Mortgage of real property,Mortgagee’s power of sale,Whether plaintiffs 'appeared from the register to be entitled to the mortgaged property',s 68 Land Titles Act (Cap 157),No right to specific performance once agreement is rescinded,Plaintiffs not entitled to specific performance of their sale and purchase agreement with owner of land
• Docket Number: Suit No 1371 of 1989
• Published date: 19 September 2003
• Defendant Counsel: Deborah Barker and Grace Ooi (Khattar Wong & Pnrs)
• Court: High Court (Singapore)
• Plaintiff Counsel: Harry Wee (briefed) (Braddel Brothers) and Tay Kim Whatt (Bee See & Tay)

Cur Adv Vult

By way of factual background of the proceedings I set out the chronology of events.

(1) Quah Hong Guan (`Quah`) was at all material times the registered proprietor of the property known as No 10 Lornie Road Singapore and comprised in Lot 449-12 of mukim 17 as described in certificate of title, vol 187 folio 171 (`the property`).

(2) The property was mortgaged by Quah to the defendants pursuant to an instrument of mortgage dated 12 January 1983 and made between Quah as mortgagor, Guan Huat Hardware Pte Ltd as borrowers and the defendants as mortgagees, and registered in the Registry of Titles as Instrument No I/31535C (`the said mortgage`);

(3) On 27 August 1986, Goh Hock Choon Pte Ltd lodged a caveat No CV 30258A against the property claiming interest as purchasers pursuant to an agreement for sale and purchase of the property dated 15 July 1986 made between Quah and Goh Hock Choon Pte Ltd.

(4) On 24 October 1986, Goh Hock Choon Pte Ltd commenced an action in Originating Summons No 1266 of 1986 against Quah for, inter alia, a declaration that they had effectively rescinded the agreement for sale and purchase dated 15 July 1986 and claiming the return of the 10% deposit paid to Quah`s solicitors, Hee & Tan, as stakeholder.

(5) On 4 December 1986, the plaintiffs entered into an agreement with Quah for the purchase of the property at the price of $830,000 (`the said agreement`);

(6) By cl 6 of the said agreement, the sale and purchase was stated to be subject to ` the purchaser obtaining an extension of the written permission for planning approval for the development of two pairs of semi-detached bungalows on the property under Reference No DC 576/83-85/C/110 dated 24 October 1985 in Decision No 855006 ` (`the written permission`);

(7) The said agreement contained the following express terms/conditions:

(i) by cl 6, in the event of the purchaser`s application for extension of the written permission for planning approval being rejected by the competent authority, the purchaser shall, within 14 days after being notified of the said rejection, resubmit plans for a fresh written permission for planning approval for the development of two pairs of semi-detached bungalows on the property;

(ii) by cl 7, the purchaser shall apply for the extension of the written permission mentioned in cl 6 above within 14 days from the date of receipt of the following from Quah:

(a) a letter of discharge from Quah`s architect, or a letter from the Singapore Institute of Architects permitting the appointment of a new architect;

(b) a letter of authority from Quah authorizing the plaintiffs to submit the application for extension of the written permission for planning approval or to resubmit plans for fresh written permission for planning approval for the development of two pairs of semi-detached bungalows on the property;

(iii) by cl 8, the sale and purchase would be treated as abortive, null, void and of no effect in the event that both the extension of the written permission for planning approval and the application for fresh written permission for the development of two pairs of semi-detached bungalows on the property should be rejected or refused by the competent authority;

(iv) by cl 13, `extension for written permission on planning approval` or `fresh application for written permission on planning approval` as referred to in the said agreement would mean `approval by letter from the planning authority for the development of the property for two pairs of semi-detached bungalows, notwithstanding the fact that the said written approval may be conditional upon compliance by the purchaser of any terms or conditions thereof or undertaking or guarantee to be furnished.`

(8) By letter of 27 November 1986, from Quah to the plaintiffs, completion under the said agreement was to take place after settlement of the dispute between Quah and Goh Hock Choon Pte Ltd.

(9) On 5 December 1986, Quah`s solicitors forwarded to the plaintiffs` solicitors the following:

(i) a written authority signed by Quah authorizing the plaintiffs to apply for extension of the written permission and to resubmit plans for fresh written submission, and

(ii) a letter dated 18 December 1986 from the Board of Architects, Singapore permitting the appointment of a new architect, as provided for by cl 7 of the said agreement.

(10) On 11 December 1986 the plaintiffs` architect sent a letter to the Development and Building Control Division, Public Works Department, Ministry of National Development (`the competent authority`) in the following terms:

Proposed two pairs of two storey semi-detached dwelling houses on Lot 449-12 mukim 17 Lornie Road DC 576-/83-85/110 dated 24 October 1985 Decision No 855006 RSU No 8511363C.

We have been appointed by the owners, Chip Thye Enterprises (Pte) Ltd, as the architects for the above project. Our clients have recently purchased the above property from Mr Quah Hong Guan of Guan Huat Hardware Pte Ltd. Attached herewith are copies of letters from Mr Quah Hong Guan and the Board of Architects for your information and retention.

We have been directed by our clients to apply for a further extension of time for the above proposed development which expired in October 1985.

Your early approval will be most appreciated.

Thank you.

(11) By their letter dated 27 October 1986 to Quah`s solicitors, the plaintiffs` solicitors stated therein that ` our clients instruct us that the 10% deposit may be released to your clients `.

(12) On 5 January 1987, Quah`s solicitors, in the `answers to requisitions on title`, inter alia stated, `noted`, against the requisition which stated that on completion, Withdrawal of Caveat No CV 30258A, lodged by Goh Hock Choon Pte Ltd, should be handed over.

(13) On or about 12 January 1987, the plaintiffs` architect, Victor Chee Teck Chai, received a letter dated 6 January 1987 from the competent authority in the following terms:

Dear Sirs,

Proposed two pairs of two-storey semi-detached dwelling houses on Lot 449-12 mukim 17 Lornie Road DC 576/83-85/110 dated 24 October 1985 Decision No 855006 RSU No 8511363C

I refer to your letter received on 12 December 1986.

Please be informed that an extension is not required as the written permission granted for the above on 24 October 1985 shall lapse on 24 October 1987 if the development is not completed by the said date.

(14) The plaintiffs did not notify Quah or his solicitors of the receipt of the said letter of 6 January 1987 from the competent authority or provide Quah or his solicitors with a copy thereof.

(15) On 16 March 1987, Goh Hock Choon Pte Ltd lodged another caveat CV 39972A against the property claiming interest as the holders of an equitable lien arising from the payment of a deposit made pursuant to the said agreement for sale and purchase dated 15 July 1986.

(16) On 8 June 1987, the plaintiffs lodged Caveat No CV 43813A claiming interest as purchasers.

(17) On 25 July 1987, the defendants` solicitors served various notices of demand on Guan Huat Hardware Pte Ltd and the guarantors, demanding payment of money due under the account of Guan Huat Hardware Pte Ltd and secured by the said mortgage.

(18) By letter dated 5 October 1987, the plaintiffs` solicitors requested the solicitors for Goh Hock Choon Pte Ltd to confirm their clients` agreement to accept the sum of $35,000 from the plaintiffs for the withdrawal of caveats lodged by their clients against the property.

(19) On 14 October 1987, Quah`s solicitors received a letter dated 13 October 1987 from the plaintiffs` solicitors in the following terms:

Our clients received confirmation of the extension.

As such, the agreement is now unconditional. We enclose the engrossed transfer for execution by your clients. Please forward us your completion account urgently to enable us to arrange for completion.

(20) After receipt of the said letter dated 6 January 1987 (supra) from the competent authority, the plaintiffs did not, either by themselves directly or through their architects, make a further application or request for an extension of the written permission until 15 October 87 when the plaintiffs` architects applied for an extension thereof.

(21) By telex dated 19 October 1987, the solicitors for Goh Hock Choon Pte Ltd confirmed their clients` offer to lift the caveats on the property on the following conditions:

(i) that the sum of $85,000 be paid to them, and

(ii) that they would refund the same to the plaintiffs upon recovery of the same in Originating Summons No 1266/86.

(22) On 19 October 1987, Quah`s solicitors requested for documentary evidence of the date on which the extension of the written permission was granted.

(23) On 19 October 1987, there appeared in The Straits Times the notice inserted by the defendants` agents of the auction sale of the property to be held on 23 October 1987.

(24) By letter dated 22 October 1987 to the plaintiffs` solicitors, Quah`s solicitors took the...