Chong Sze Pak v Har Meng Wo

• Jurisdiction: Singapore
• Judge: Lim Teong Qwee JC
• Judgment Date: 06 September 1997
• Neutral Citation: [1997] SGHC 234
• Docket Number: Originating Summons No 35 of 1997
• Date: 06 September 1997
• Year: 1997
• Published date: 19 September 2003
• Plaintiff Counsel: Jaswant Singh (Deputy Public Prosecutor)
• Citation: [1997] SGHC 234
• Defendant Counsel: Benjamin Sim (Shook Lin & Bok)
• Court: High Court (Singapore)
• Subject Matter: Contract,Effect of purchaser allowing vendor to remain under mistaken belief,Vendor contracting on land area and not area of flat,Sale of land,Mistake of fact,Words and Phrases,Conditions of sale,Whether vendor's mistake over formula for determining price which is based on land area is induced by purchaser,Built-in area,Sale and purchase of property,Land,Whether purchaser and his solicitor aware that 1,633 sq ft refers to area of land and not to area of flat,Purchaser contracting on area of flat -Purchaser's solicitor included additional clause reflecting the price per sq ft using area of land,Whether the words "built-in area" refer to area of land or area of flat,"Built-in area",Whether contract to be set aside,Purchaser's solicitor proposing clause for determining final sale price to be based on built-in area as shown in title documents,Mistake

Judgment:

LIM TEONG QWEE JC

Cur Adv Vult

On 7 November 1996 the defendant granted an option to the plaintiff to purchase the property known as 2B Whampoa Drive Singapore 1232. The option is in typescript with blank spaces filled in by hand with the usual particulars as to the description of the property, the parties and the price. It sets out the terms of sale upon the option being exercised. The option was exercised by the plaintiff the same day.

2.Clause 1 of the terms of sale provides:

The sales (sic) price shall be dollars: five hundred and fifteen thousand only ($515,000).

The typewritten form has ten clauses and cl 11 appears in manuscript. It provides:

The sale/purchase price stated herein is calculated at the rate of $315psf. The final price will be based on the actual built in area as shown in title documents or according to survey by a registered surveyor.

3.On 13 November 1996 the plaintiff`s solicitors wrote to the defendant`s solicitors. The material part of the letter says:

At the time of settling the option the area of the unit was represented to our client to be 1663 sq ft resulting in a price of $515,000. Our search now shows the area only to be 1035 sq ft. The purchase price should therefore be $326,025. Will you please agree to amendment of the price stated in the option to ensure the payment of correct stamp duty. The stamp duty difference is $5,667.

The defendant`s solicitors replied on 16 November 1996 to say that he did not agree to any abatement of the price.

4.On 13 January 1997 the plaintiff commenced this action by originating summons. His claim is for a declaration that the price under the sale and purchase agreement is $326,025 and an order for the defendant to complete the sale and further or other reliefs and costs.

5.It is not in dispute that the property sold comprises a leasehold interest in the flat on the third storey of a three-storey building and a one-third undivided share or interest in the freehold reversion in the land on which the three-storey building has been erected. The flat is held under a registered lease and the land is held under a certificate of title.

6.The plaintiff`s case is that the final price is to be determined under cl 11. It is based on the `actual built in area as shown in title documents or according to survey by a registered surveyor`. The area shown on the plan attached to the lease is `1035 sq ft sc` and accordingly the price is 1,035 x $315 or $326,025.

7.The defendant has taken a number of points. First it is said that cl 11 refers to the area of the land on which the building has been erected. The `actual built in area as shown in title documents` is the area of the land. That is what those words mean or alternatively (as I understand this part of the defendant`s case from the affidavits filed on his behalf) that is their meaning because the only area shown in the documents of title produced at the time the option was granted is the area of the land.

8.The first sentence in cl 11 says that the price stated in the option to purchase is calculated at the rate of $315psf. Of course the rate alone will not produce the price and the area has to be known. The second sentence gives the area. It says that the final price will be based on the actual `built in area`.

9.The property sold is a leasehold interest in the flat and a one-third undivided share in the freehold reversion in the land. The area referred to in cl 11 can only mean the area of the flat or of the land in the sense of the ground as the defendant contends. It is described as the `built in area`. No attempt was made by counsel to say what `built in area` meant but while I would not attempt to define the expression it seems to me that it must refer to the area of the horizontal plane over a structure including anything that forms an integral part of it. Understood in this sense the `built in area` is an expression that is apt only when describing the area of the flat. That cannot be said of the area of the land. In my judgment the `built in area` in cl 11 means the area of the flat and not the area of the land.

10.The defendant said that on 7 November 1996 he met with the plaintiff at the office of Mr Phua Chee Heong who was the real estate agent who brokered the sale. He said that at this meeting he gave the plaintiff a set of documents including the certificate of title `because [the plaintiff] wanted to ascertain the area`. The certificate of title relates to the land. Copies of the documents are exhibited to his affidavit.

11.The plaintiff said that Mr Phua sent him a set of the documents. I think this would have to be before the meeting on 7 November 1996. Copies of the documents are exhibited to his affidavit. There are four documents. They are the registered lease, the certificate of title, the cancelled original grant and a plan. They are exactly the same as the documents which the defendant said he gave the plaintiff. The plaintiff said that as he was unable to read or understand the documents he went to see his solicitor Mr Leong Kwok Yan with the documents. Mr Leong told him that the documents did not show the area of the flat.

12.The registered lease exhibited to the plaintiff`s affidavit relates to the flat but it does not show the area of the flat. The certificate of title, the cancelled original grant and the plan all relate to the land. All of these show the area of the land to be 1,633 sq ft although in the certificate of title the area has been amended by striking out the square foot measure and writing in its place the metric equivalent. The registered lease which the defendant gave the plaintiff and which the plaintiff received did not have any plan of the flat attached to it. Only the plan would have shown the area of the flat.

13.I see no reason for saying that the expression `title documents` in cl 11 means only the documents delivered to the plaintiff to the exclusion of the plan of the flat. The plan of the flat is referred to in the description of the `land` (ie the flat) as stated in the registered lease. It is said to be annexed to it. It is part of the registered lease and the registered lease with the plan annexed to it is as much a `title document` as the certificate of title and the other documents. If there is any doubt as to which `title document` is meant such doubt is resolved by cl 11 itself. It is the `built in area` which determines the price and I have held that this means the area of the flat. In my judgment the `built in area as shown in title documents` in cl 11 means the area of the flat as shown in the registered lease with the plan annexed to it.

14.The next point taken by the defendant is that cl 11 is ambiguous. Mr Yeo submitted that it was capable of referring to the area of the land as well as to the area of the flat and the defendant understood it to refer to the area of the land. The argument presumably is that there is no enforceable contract because it cannot be ascertained with reasonable certainty what the intention of the parties is with regard to the formula for determining the price.

15.I have to refer once again to cl 11 to see what it says. The price stated in cl 1 is $515,000. In cl 11 it says that this price has been calculated at $315psf. That requires the area to be fractionally less than 1,635 sq ft. The evidence is that it was worked `back` from an area of 1,633 sq ft ie $515,000 divided by 1,633 sq ft giving a rate of about $315 per sq ft but such evidence is not admissible for the purpose of ascertaining what the contract says is the formula for determining the price. The rate is clearly expressed in the first sentence of cl 11. I have held that the area referred to in the second sentence is the area of the flat. I see no ambiguity in cl 11. If there is any ambiguity again I need look no further to resolve it than cl 11 itself which puts it beyond doubt that the price is $315psf based on the actual built in area of the flat.

16.The defendant then relied on the common law defence of mistake. It was said that there was a mutual mistake of fact which precluded the formation of a contract. Mr Yeo said that the plaintiff meant the area of the flat and the defendant meant the area of the land. The difficulty in the defendant`s way is that cl 11 refers to the area of the flat as I have held and the mistake is clearly the defendant`s own mistake. There was no mutual mistake.

17.Finally Mr Yeo submitted that the plaintiff knew of the defendant`s...