Fong Yoke San & Another v Chan Lee Pa

• Jurisdiction: Singapore
• Judge: Woo Bih Li JC
• Judgment Date: 09 December 2002
• Neutral Citation: [2002] SGHC 292
• Docket Number: Suit No 1358 of 2002
• Date: 09 December 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: Lim Kim Song (Song Ling & Partners)
• Citation: [2002] SGHC 292
• Defendant Counsel: Lee Mong Jen (Leong Chua & Wong)
• Court: High Court (Singapore)
• Subject Matter: Contractual terms,Whether contract valid,Option to purchase property,Option not executed by all joint tenants,Contract,Whether option perfected,Express terms

Judgment

GROUNDS OF DECISION

Background

1. By an Option to Purchase dated 21 August 2002 (‘the Option’), the Defendant Chan Lee Pa (‘CLP’) granted the Plaintiffs Fong Yoke San and Kwok Sing Cheong an option to purchase a property known as No 50 Jalan Lembah Thomson Singapore 577520 (‘the Property’) at a price of $1.15 million. The option fee was $11,500 and the expiry time and date for the exercise of the Option was 4pm of 18 September 2002.

2. The Plaintiffs’ solicitors subsequently made a title search of the Property which revealed that there were three owners of the Property who were joint tenants thereof:

(a) CLP

(b) Chan Tze Wun (who is the son of CLP)

(c) Wong Kim Hoo (who is the wife of CLP)

3. The Plaintiffs’ solicitors wrote to CLP’s solicitors on 17 September 2002 asserting that because there were three joint tenants of the Property and the Option was given and signed by CLP only, the Option was incomplete and unperfected. Accordingly, they demanded the return of the option fee i.e $11,500.

4. CLP’s solicitors replied on 18 September 2002 stating that the other two owners ‘are at all times able, willing and ready to sign the said Option’.

5. I would add that apparently the two housing agents involved had arranged an appointment at 6.30pm on 17 September 2002 for the Plaintiffs to meet CLP and the other two owners for the other two owners to sign the Option but that appointment was cancelled. However, it was not clear whether the appointment was fixed with the knowledge of the Plaintiffs before it was cancelled. Furthermore, as CLP’s Counsel, Ms Lee Mong Jen, did not rely on estoppel or waiver, I need say no more about this appointment.

6. The Plaintiffs did not exercise the Option and the option fee was forfeited. The Property was eventually sold to another purchaser at a price of $1.11 million i.e $40,000 less than the price stated in the Option. The Plaintiffs brought this action to claim the repayment of the option fee of $11,500. After hearing arguments, I dismissed the Plaintiffs’ claim with costs. I now give my written reasons.

Arguments and my reasons

7. Mr Lim Kim Song, Counsel for both the Plaintiffs, submitted that as CLP was the only one of the three joint tenants to sign the Option, the Option was incomplete and unperfected. He relied heavily on the decision of the Court of Appeal in Mookka Pillai Rajagopal & Ors v Khushvinder Singh Chopra [1996] 3 SLR 457. However, it is important to understand the facts there.

8. In that case, there were three joint tenants of a property known as 91 Jalan Seaview. The first appellant was the father of the second appellant. The third appellant was the wife of the second appellant. An option was granted to the respondent to purchase this property, the respondent being an advocate and solicitor. The option was expressed to be given by the three appellants but only the second and third appellants signed it (see p 459 at G of the law report). It was on these facts that L P Thean JA said at p 462:

‘The option was intended to be given and signed by the three appellants, who held and still hold the property as joint tenants. It was signed by only two of them. Neither of them purported to sign the option on behalf of the first appellant. It was an incomplete or unperfected option and was ineffective as an option to the respondent to purchase the property. It follows from this that when the respondent exercised the option on 25 October 1993 there did not arise an agreement between the appellants and the respondent for the sale and purchase of the property. At any rate, the option was certainly not binding on the first appellant, and on that date there was no agreement binding on him to sell or join in the sale of the property to the respondent, whatever might be the effect of the agreement, if any, that was made between on the one hand the respondent and on the other hand the second and third appellants - we shall refer to this as the unperfected agreement - and their liability thereunder.’

9. At p 467, Thean JA also said:

‘…. The option signed by the second and third appellants were an incomplete or unperfected option and the respondent’s purported exercise thereof did not result in an agreement. At any rate, assuming that by the exercise of the option, a binding agreement was made with the second and third appellants, the agreement was not binding on the first appellant. The property being held by the three appellants as joint tenants, such an agreement was not effective to dispose of the entire property in favour of the respondent. The respondent would have serious difficulty in enforcing the agreement even as against the second and third appellants. It seems to us that, at the most, he would be able to recover only the consideration paid for the option.’

10. Relying on the passage I have cited from p 467, Mr Lim submitted that the Option before me was also incomplete and unperfected. However, it seemed to me that in Mookka Pillai, the option was incomplete and unperfected because it purported to emanate from all three joint tenants but only two had signed. Even then, Thean JA was prepared to consider the possibility that it might still constitute a binding agreement on the second and third appellants. I would add that in Mookka Pillai, the main substantive issue before the Court of Appeal was whether the respondent purchaser had exercised undue influence on the appellants or any one or more of them (see p 462 at B of the law report). Indeed both Ms Lee and Mr Lim informed me that the three cases listed in p 458 of the law report were on undue influence.

11. In the course of submissions, Ms Lee also drew my attention to another decision of our Court of Appeal in Tay Joo Sing v Ku Yu Sang [1994] 3 SLR 719. In that case, two brothers Tay Joo Sing and Tay Joo Meng were tenants-in-common in equal shares of a commercial unit in Lucky Plaza, Orchard Road, Singapore, known as B1-124 (‘No 124’). They had tried to sell No 124 as far back as 1985 but were not successful. Joo Meng then emigrated to Australia and left the sale to Joo Sing. Eventually Joo Sing purported to sell No 124 to a purchaser Ku Yu Sang. For this purpose, a document prepared by a property broker was signed. It was referred to as ‘PB1’ and it stated:

‘Mr Tay Joo Sing and Mr Tay Joo Meng

48 Marshall Road

Singapore 1542

2 May 1987

Re: B1-24 Lucky Plaza, 304 Orchard Road, Singapore 0923

This is to confirm that we, Mr Tay Joo...