Foo Kee Boo v Ho Lee Investments (Pte) Ltd

• Jurisdiction: Singapore
• Judge: Grimberg
• Judgment Date: 14 July 1988
• Neutral Citation: [1988] SGHC 54
• Date: 14 July 1988
• Subject Matter: Time for exercising option extended at purchaser's request,Whether irregularity renders contract invalid,Extension of time given by vendors to exercise option,Conditions of sale,Illegality and public policy,Option for sale and purchase of house,Whether binding agreement existed,Sale of land,Staututory illegality,Whether binding agreement comes into existence,Land,rr 10(B) & 20 Housing Developers Rules 1976,Whether new option capable of acceptance and validly accepted,Formation,Option not in form prescribed by legislation,Contract,ss 4, 20 & 21 Housing Developers (Control and Licensing) Act (Cap 250, 1970 Ed)
• Docket Number: Originating Summons No 469 of 1984
• Published date: 19 September 2003
• Defendant Counsel: Shriniwas Rai (Hin Rai & Tan)
• Court: High Court (Singapore)
• Plaintiff Counsel: Fazal Karim (David See & Co)

Cur Adv Vult

The defendants are licensed property developers. In or about the beginning of 1984, they commenced the development of an estate in Yio Chu Kang, to be known as Sunrise Villa, which was to comprise a mix of semi-detached and terraced houses.

The defendants` licence was issued under the Housing Developers (Control and Licensing) Act (Cap 250, 1970 Ed) (the Act), which was in force at the material time. Section 21 of the Act empowered the minister to make rules, inter alia, to regulate the payments to be made by purchasers to developers, and to prescribe the forms to be used by housing developers in contracting with purchasers.

In exercise of the powers conferred on him by s 21, the minister made rules called the Housing Developers Rules 1976 (the Rules`). By the Schedule to the Rules, a form of option to purchase and forms of agreements for sale were prescribed. Rule 10(B) made the following provisions with regard to options:

(1) An option for the sale of any housing accommodation given by a housing developer shall be in the Form D set out in the Schedule to these Rules.

(2) The option granted by the housing developer shall not be assignable or transferable.

(3) No amendment, deletion or alteration to the option referred to in paragraph (1) shall be made except with the approval in writing of the Controller.

Rule 20(1) was in the following terms:

Any person -

(a) who refuses or neglects to comply with or acts in contravention of any of the provisions of these Rules; or

(b) ... ; or

(c) ... shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both such fine and imprisonment.

On 19 January 1984, the defendants granted the plaintiffs an option (the option) to purchase a semi-detached house in their development. The option was precisely in the terms stipulated by Form D of the Schedule to the Rules. The consideration for the option was the payment to the defendants by the plaintiffs of $72,400 (the booking fee) which was equivalent to 10% of the purchase price of the property. Clauses 1, 2, 3 and 4 of the option were in the following terms:

1 We shall make available for inspection and perusal by your solicitors ... Singapore, within two weeks from the date hereof the title deeds of the property or photostat copies thereof and the draft contract in duplicate in the prescribed form.

(2) The option shall expire within three weeks from the date of the delivery to your solicitors of the title deeds or photostat copies thereof and the draft contract.

(3) To exercise the option, you must sign the contract in the prescribed form. We shall thereupon sign the contract and 20% of the purchase price (less the booking fee) shall forthwith be paid by you to us.

(4) If you do not wish to exercise the option or if you allow the option to expire without exercising it, we shall refund to you 95% of the booking fee if the purchase price is $200,000 and below and 90% of the booking fee if the purchase price is more than $200,000. You must thereupon return the title deeds or photostat copies thereof and the draft contract to us and neither party shall thereafter have any claim against the other.

The defendants` solicitors, in compliance with cl 1 of the option, wrote to the plaintiffs on 20 January 1984 enclosing an agreement for sale (the agreement) in triplicate and copies of the title deeds. The agreement complied fully with the terms prescribed by Form B in the Schedule to the Rules. The defendants` solicitors requested the return of the agreement, duly signed by the plaintiffs with a cheque for $72,400 which, together with the booking fee, amounted to 20% of the purchase price of the property. By virtue of cl 2 of the option, the plaintiffs had until 10 February 1984 to exercise the option by signing the agreement. Upon a true construction of cl 3 of the option, the $72,400 only became payable upon the execution of the agreement by the defendants.

On 8 February 1984, that is to say, two days before the option was due to expire, the plaintiffs` solicitors telexed the defendants` solicitors stating that the plaintiffs were applying for a loan to be secured by a mortgage over the property, and requesting an extension of time until 17 February 1984 within which to sign and return the agreement.

The defendants` solicitors did not reply before the option expired but on 13 February 1984, three days after it had expired, they wrote to the plaintiffs` solicitors stating that their clients were prepared to allow the plaintiffs the extension of time which they had requested.

On the last day of the extended period of time, namely, 17 February 1984, the plaintiffs` solicitors wrote to the defendants` solicitors returning the agreement duly signed by their clients, and stating that it had been mutually agreed between their clients and the defendants that the $72,400 which would become payable under cl 3 of the option when the agreement was signed by the defendants, would be paid by the plaintiffs by means of a cheque post-dated to 29 March 1984. A cheque so post-dated, for the required sum, was enclosed. The agreement and the cheque were acknowledged by the defendants` solicitors, who confirmed, by a letter dated 22 February 1984, that payment by means of a cheque post-dated to 29 March 1984 was acceptable to their clients. The agreement was signed by the defendants, and dated 20 February 1985, and a copy of it was sent to the plaintiffs` solicitors under cover of the defendants` solicitors` letter of 22 February 1985, to which I have just referred.

By virtue of cl 3(1)(b) of the agreement, an instalment amounting to 10% of the purchase price of the property (the cl 3(1)(b) instalment) fell to be paid within 14 days of the receipt by the plaintiffs of the defendants` notice in writing that the foundation works of the property had been completed. Notice to this effect, dated 21 February 1984, was given to the plaintiffs, and the amount due under it was $72,400. The notice was acknowledged by the plaintiffs` solicitors who, by letter dated 5 March 1984, requested an extension of time of four weeks for payment of the cl 3(1)(b) instalment. The defendants` solicitors responded by telex of 8 March 1984 stating that their clients agreed to the request for an extension of time, but that if payment of the cl 3(1)(b) instalment was not received by 29 March 1984, the defendants reserved the right to charge interest from the date upon which payment of that instalment was originally due.

On 28 March 1984 a fresh firm of solicitors which had been consulted by the plaintiffs wrote to the defendants` solicitors in the following terms:

We are now instructed by our clients to inform you that they are not proceeding with the purchase of the property. Kindly arrange to let us have the following on a basis of urgency:

(1) Our clients` post-dated cheque (post-dated 29 March 1984) for S$72,400.

(2) Your clients` cheque in our clients` favour for the refund of the booking fees.

As instructed, we also return herewith the agreement for sale and purchase dated 20 February 1984 for your cancellation.

Please acknowledge receipt and let us hear from you immediately by return post.

The defendants` solicitors responded by telex dated 17 April 1984 thus:

We are instructed by our clients that the sum of Singapore dollars 72,400 will be forfeited in view of your clients not proceeding with the purchase.

By a letter, dated 27 April 1984, the defendants` solicitors claimed that a binding agreement for sale had come into existence between their clients and the...