Lo Geok Kwee v Suriyakumari d/o Kandasamy Gopal

• Jurisdiction: Singapore
• Judge: Chan Sek Keong J
• Judgment Date: 08 November 1991
• Neutral Citation: [1991] SGHC 199
• Court: High Court (Singapore)
• Year: 1991
• Published date: 18 July 2005
• Plaintiff Counsel: S Pillay
• Defendant Counsel: Seah Chwee Lim
• Citation: [1991] SGHC 199

1) This is an appeal by the defendant from the decision of the Assistant Registrar giving summary judgment to the plaintiff for the sum of $65,000 and interest thereon.

2) The said sum was paid by the plaintiff to the defendant under the terms of a document called OPTION dated 15.10.90 (which document shall be referred to hereafter .as "the Option") to purchase the defendant's property known as Nos 276 & 278 Serangoon Road, Singapore (collectively, "the said property"). The Option was addressed to the plaintiff and/or nominees and contained the following terms:

In consideration of... $50,000 (..."the Option Money") paid by you to me by way of Option Money ... I [the plaintiff] (..."the Vendor") hereby make the following offer which remains open for acceptance in the manner stated below.

I hereby offer to sell to you (..."the Purchaser") the above property ("the said property")...to be accepted in the manner ... and upon the terms set out below.

This offer may be accepted by the Purchaser by signing at the part of this Option marked "ACCEPTANCE COPY" and delivering the said "ACCEPTANCE COPY" duly signed together with a cheque for...$86,000 (being 10% of the purchase price less the Option Money) to the Vendor's Solicitors...by 4 pm on [23.11.90] who are authorised to acknowledge receipt of the said sum and to hold it as stakeholders only to be released to the Vendor on the date of granting of approval for subdivision described in Clause 5.

TERMS OF SALE

1. The sale price shall be...$1,360,000.

2. The sale is subject to the...The Singapore Law Society's Conditions of Sale 1981...

3. The title to the said property shall be free from encumbrances and properly deduced...

4. The sale is subject to existing licences without vacant possession on the ground floor...

5.(a) The purchase shall be completed after the Vendor has obtained subdivision approval from the relevant authorities in respect of the said property...within ...9 months from the date of exercising this Option...

5.(b) In the event that the Vendor shall not be able to obtain the sub-division approval within the 9 month period, the Purchaser has the option: C

(i) either to rescind the Agreement, in which case, all the monies paid to the Vendor shall be refunded with interest at 8% pa within 7 days of receipt of written notice of rescission; or

(ii) to wait for the outcome, including appeals, of the Vendor's application for as long as the Purchaser deems fit; or

(iii) to complete the sale and purchase ... without subdivision approval...

6. The Option Money shall be treated as part payment towards the 10% deposit of the purchase price which shall be paid on the exercise of this Option as aforesaid.

7. The sale is subject to the Purchaser receiving satisfactory replies to all legal requisitions sent to the various Government Departments including the MRT Corporation as well as satisfactory information from the road and drainage interpretation plans. If any of such replies or information is unsatisfactory, the Purchaser shall have the option to rescind the Contract and all monies paid by the Purchaser shall be refunded free of interest...

8. The balance of the purchaser price shall be paid on completion.

9. [Purchaser deemed to buy with notice of actual state and condition]

10. This Option shall be treated as a legally binding contract upon the same being exercised by the Purchaser and no further contract shall be required.

11. [From date of "the contract" said property at risk of the Vendor]

12. [Completion of sale and purchase not to affect terms and conditions]

13. If this Option is not exercised on or before the date herein stipulated, this offer herein contained shall lapsed [sic] and the Option Money paid shall be forfeited.

[14, 15 and 16 not relevant]."

3) In addition to the Option Money, the plaintiff also paid another sum of $5000 for fittings and improvement work to the properties.

4) Prior to the expiry of the option on 23.11.90, the plaintiff sought an extension of the option period and was, on 20.11.90, granted an extension of the period up to 4 pm on 23.1.91 in consideration of the payment of an additional sum of $10,000.

5) On 19.12.90, the plaintiff's solicitors received from the PWD a Road Interpretation Plan ("the RIP") dated 14.12.90 which showed that the whole of the said property was "required for new road/road improvement" as "part of the national road network". On 16.1.91, the plaintiff's solicitors informed the defendant's solicitors of the unsatisfactory requisition and alleged that the defendant would not be in a position to convey to the plaintiff the said property free from the road line. They therefore demanded the refund of $65,000 on the ground of "anticipatory breach and as a repudiation on the Vendor's part". The defendant refused to refund the said monies in spite of their solicitors' attention having been drawn to the decision of LEE HOOI LIAN v KUAY GUAN KAI [1990] 2 MLJ 345.

6) The plaintiff's cause of action as pleaded in paragraph 12 of the Statement of Claim is as follows:

"Through her said Solicitors' letter, the Plaintiff duly exercised her right to rescind the said Option and on account of an anticipatory breach and/or repudiation on the Defendant's part which the Plaintiff accepted it, the Plaintiff also demanded for the refund of the total Option money of $60,000.00 and another $5,000.00 for fittings and improvement works as described in paragraph 2 herein."

7) At the hearing before the Assistant Registrar, the defendant relied on the defence of estoppel. He deposed that the plaintiff had been informed by the real estate broker involved in the transaction that the property was affected by the road line before the option fee was paid by the plaintiff. This allegation was supported by an affidavit from the broker who further alleged that the plaintiff was prepared to buy the said property. The plaintiff denied all these allegations. The Assistant Registrar gave judgment for the plaintiff.

8) Before me, counsel for the defendant has contended that whether or not the plaintiff knew of the road line is a question of fact, and in view of the broker's affidavit, the defendant should be given leave to defend. He does not deny that the RIP contained unsatisfactory information. Counsel for the plaintiff says that the defendant's allegation is a bare allegation, that the broker's statement is unsubstantiated, and that the defendant did not make any such allegation in spite of having received not less than 4 reminders to refund. All these circumstances, he says, prove that the defence is not bona fide.

9) It is not necessary for me to decide whether the'defence is bona fide or valid. What I think it is necessary to consider is whether, in law, the plaintiff is entitled to the return of the option money when he has not exercised the option, whatever the reason for his not having done so. For this purpose, I accept that the reply from the PWD in the form of the RIP is unsatisfactory in terms of clause 7 of the Option.

10) The plaintiff's case is that "he duly exercised the right to rescind the option and on account of an anticipatory breach and/or repudiation on the Defendant's part which the Plaintiff accepted it". Counsel for the plaintiff relies on the decision of Chao J in LEE HOOI LIAN in support of this cause of action. In that case, L, having paid a consideration of $5000 for an option to purchase K's property, refused to exercise the option when he discovered that the road interpretation plan showed that the property was affected by a road line and was therefore unsatisfactory. Clause 7 of the option agreement provided that the "sale and purchase herein shall be subject to the purchaser's solicitors receiving satisfactory replies..."
He demanded the refund of the option fee, which was refused. In an action for the refund for the option fee, Chao J held that the plaintiff was entitled to the return of the option fee on the ground that even if L had exercised the option, K would not have been able to convey the property he had agreed to convey, i.e. free from the road line. He rejected the argument that the main contract for sale had not come into effect until the option had been exercised, and that until then K had no obligation to convey the property free from...