Excelsior Hotel Pte Ltd v Hiap Bee (Singapore) Pte Ltd (OCBC Finance (Singapore) Ltd, interveners)

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JC
• Judgment Date: 04 October 1989
• Neutral Citation: [1989] SGHC 84
• Docket Number: Suit No 1868 of 1987
• Date: 04 October 1989
• Published date: 19 September 2003
• Year: 1989
• Plaintiff Counsel: Yap Wai Ming (Drew & Napier)
• Citation: [1989] SGHC 84
• Defendant Counsel: Gourdeep Singh (Tan Lee & Partners),David Seah Nam Fook (RCH Lim & Co)
• Court: High Court (Singapore)
• Subject Matter: s 5 Sale of Commercial Properties Act (Cap 281),Specific performance,Purchaser defaulting on instalment payments -Whether common law remedy of specific performance restricted by legislation or sale and purchase agreements,Contract,Remedies,Sale and purchase agreements for property,Sale of Commercial Properties Rules 1979

The plaintiffs were the vendors and the defendants were the purchasers of two units (nos B1-10 and B1-17) of shopping premises at the Excelsior Hotel and Shopping Centre, Coleman Street. The sales were governed by the Sale of Commercial Properties Rules 1979 and the two agreements of sale and purchase (sale agreements) were executed by the parties on 12 September 1983.

The interveners were the chargees of the said units under two separate deeds of assignment and mortgages in escrow. The deeds were executed as security for the progress payments to be made by the interveners, on behalf of the defendants, to the plaintiffs towards the purchase price of the said units.

Under the sale agreements, the price for the said units was to be paid in instalments in accordance with the progress of the construction of the project. There were defaults on the defendants` part in paying up the instalments due. Pursuant to cl 14 of the sale agreements, the plaintiffs` solicitors by their letters of 15 January 1987 gave the defendants` solicitors notice to complete the sale and purchase. The defendants failed to pay up the amounts due and to complete the transactions as required. There were also outstanding service charges due from the defendants in respect of the said units.

By this action, the plaintiffs claimed specific performance of the two sale agreements and a declaration that the plaintiffs were entitled to a lien on the said units in respect of the sums due and owing by the defendants and an order that in default thereof the plaintiffs be at liberty to apply to enforce the lien. By way of a summons-in-chambers, the plaintiffs sought a summary judgment in terms as aforesaid in respect of only one of the two units (unit no B1-10).

The application for summary judgment came up for hearing before the senior assistant registrar who refused to grant specific performance and instead ordered that the plaintiffs should proceed under cl 6(3) of the sale agreement. The plaintiffs appealed to the judge-in-chambers and the matter came before me. I allowed the appeal.

Before I go into the arguments, I think it is necessary for me to set out cl 6(3) of the sale agreement in full:

If any of such unpaid instalments and interest remains unpaid for any period in excess of forty (40) days after its due date, the vendor shall be entitled at his option on giving to the purchaser or his solicitors not less than thirty (30) days` notice in writing to treat this agreement as having been repudiated by the purchaser and (unless in the meanwhile such unpaid instalment and interest shall have been paid) this agreement shall at the expiration of the said notice (and in this respect time shall be of the essence) be annulled and in such an event:

(a) the vendor shall be entitled to deal with or otherwise dispose of the said unit in such manner as the vendor shall see fit as if this agreement had not been entered into;

(b) the instalments previously paid by the purchaser to the vendor excluding any interest paid shall be dealt with and disposed of as follows:

(i) firstly, all interest calculated in accordance with para (1) hereof owing and unpaid shall be paid to the vendor;

(ii) secondly, a sum equal to twenty-five (25) per cent of the balance thereof shall be paid and forfeited to the vendor; and

(iii) lastly, the residue thereof shall be refunded to the purchaser;

(c) neither party hereto shall have any further claims against the other for costs, damages, compensation or otherwise hereunder; and

(d) each party hereto shall pay its own costs in the matter.

The issue raised before me was a narrow one: in view of the provisions in cl 6(3), could the plaintiffs still ask for specific performance? The plaintiffs argued that nothing in the sale agreement precluded them from seeking specific performance of the contract, as that was a common law remedy available to a vendor. They said that the remedy specified in cl 6(3) was not exclusive of an other remedy available under common law to a vendor. As provided in that clause, it was at the option of the plaintiffs (as vendors) whether they wished to treat the sale agreement as having been repudiated.

On the other hand, the defendants and the interveners submitted that the remedy provided in cl 6(3) superseded all other remedies which might be available to a vendor under general law. They said that under s 5 of the Sale of Commercial Properties Act (Cap 281) (the Act), every sale of a commercial property must be effected in accordance with the terms and conditions prescribed under the Act and that any agreement entered into which was inconsistent with the terms and conditions of sale so prescribed by the Rules would, to the extent of the inconsistency, be null and void. Therefore, they contended that in accordance with the scheme of things laid down under the Act and the Rules, the remedy set out in cl 6(3) was the only one available to a vendor in the event that the purchaser should be in default and fail to complete the sale as required.

Under common law, it is clear that a vendor of immovable property has as much right to ask for specific performance of a contract of sale as a purchaser would have. Jones and Goodhart on Specific Performance (1986 Ed) states the following at p 91:

As long ago as 1804 Sir William Grant MR said that a court of equity will always decree specific performance of a contract for land; it is `as much of course in this court to decree a specific performance, as it is to give damages at law`. Damages are only deemed to be an

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