DBSL Properties Pte Ltd v Hong Leong Finance Ltd

• Jurisdiction: Singapore
• Judge: Chan Sek Keong J
• Judgment Date: 04 March 1992
• Neutral Citation: [1992] SGCA 16
• Docket Number: Civil Appeal No 14 of 1990
• Date: 04 March 1992
• Year: 1992
• Published date: 19 September 2003
• Plaintiff Counsel: Deborah Barker (Khattar Wong & Partners)
• Citation: [1992] SGCA 16
• Defendant Counsel: Anthony Lee and Loh Wai Mooi (Allen & Gledhill)
• Court: Court of Appeal (Singapore)
• Subject Matter: Sale of land,'Outgoings',Whether right of apportionment of property tax exists,Conditions of sale,Conflict with Law Society's Conditions of Sale 1981,conditions 6 & 7 Law Society's Conditions of Sale 1981,Words and Phrases,Special conditions of sale,Whether vendor or purchaser liable,Construction,Land,Whether reconciliable,Payment of outstanding property tax prior to completion

This is an appeal against the order of Chao Hick Tin JC [as he then was] declaring that under the terms of an agreement dated 16 September 1988 (`the agreement for sale`) all property tax payable on the property known as No 11 Beach Road, Singapore (`the property`) in respect of the period prior to the date of completion was to be borne by the appellants.

The respondents, who were the mortgagee-vendors, had sold the property to the appellants by way of a public tender. The material terms of the agreement for sale (`the special conditions`) were as follows:

(6) (a) The vendor is selling the property as mortgagee under an indenture of mortgage registered in vol 2258 No 109 and an indenture of mortgage registered in vol 2258 No 110 and the concurrence of any person or persons interested in the property shall not be required [n]or shall the vendor be required to enter into any covenant for title other than the implied statutory covenant against encumbrances read with sub-cl (c) below.

(c) The property is sold subject to encumbrances and other interest (if any) registered against the property and also to any subsisting exceptions reservations restrictive and other covenants or conditions or other rights affecting the same and if any error misstatement or omission shall be discovered the same shall not annul the sale nor shall any compensation or abatement be allowed in respect thereof.

(11) All notices or orders from the government authorities (if any) served before on or after the date of the letter of acceptance of the tender shall be complied with by and at the expense of the successful tenderer, and as on and from the said date of the letter of acceptance the property shall be at the risk of the successful tenderer as regards destruction or damage by fire or otherwise. The successful tenderer should make his own enquiries in respect thereof and the successful tenderer shall be deemed to bid with full knowledge of the same (if any) and of the effect thereof.

(23) The property is sold subject to (a) any scheme, layout, matter or thing embodied or shown in the general improvement plan and/or the master plan and all proposed amendments or additions thereto; (b) any proposed scheme affecting the property; and (c) all notices including notices for payment of property tax and maintenance and service charges, charges and claims affecting the property made or served whether before on or after the date of tender. The successful tenderer shall be deemed to have purchased with full knowledge and notice of all such schemes or proposed schemes, layouts, matters, things, notices, discharged by and at the expense of the successful tenderer who shall not be entitled to make or raise any objection or requisition whatsoever in respect thereof.

(25) The parties hereto shall be bound by the general conditions of sale known as `The Singapore Law Society`s Conditions of Sale 1981` so far as the same are applicable to a sale by private treaty and are not varied by or inconsistent with the conditions herein.

The relevant conditions in The Singapore Law Society`s Conditions of Sale 1981 (`the general conditions`) were as follows:

(6) The outgoings will be discharged by the vendor down to but excluding the date fixed for completion, as from which day all outgoings shall be discharged by and the rents and profits or possession shall belong to the purchaser, (such outgoings, rents and profits, if necessary, being apportioned) but the purchaser shall nevertheless not be let into actual possession or receipt of rents and profits until completion of the purchase, and the purchaser shall on completion pay to the vendor a due proportion of the current rents less the like proportion of the current outgoings.

(7) The vendor shall pay for all property tax (including surcharge thereon) down to but excluding the day fixed for completion, whether such tax shall have been levied or (as the case may be) increased before on or after completion and the vendor shall indemnify the purchaser in respect of the same. The provisions herein shall not merge in the conveyance/transfer by the vendor to the purchaser.

Chao Hick Tin J held that special condition 23 was inconsistent with general conditions 6 and 7 and, that by virtue of special condition 25, special condition 23 must prevail. Accordingly, the liability for the outstanding property tax fell on the appellants as the purchasers.

On a plain reading of special condition 23, there could be no doubt whatever that it provided that the successful tenderer was liable to pay outstanding property tax affecting the property. However, counsel for the appellants made a brave attempt to persuade us that that condition did not mean what it said and that it could be reconciled with general conditions 6 and 7.

The argument proceeded in two steps. The first step was to determine the combined effect of certain other conditions. She referred specifically to special condition 6(a) and (c) and general conditions 6 and 7, and contended that when read together, they provided that the property was sold free from any encumbrance except for such encumbrances or other interests as might be registered against the property. The property tax in this case, although it was a first statutory charge on the property, was not registered against it. On this basis, she concluded that the sale was free from property tax, and therefore an apportionment of property tax would be required...