Huang Ching Hwee v Heng Kay Pay and Another

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 13 November 1992
• Neutral Citation: [1992] SGCA 79
• Docket Number: Civil Appeal No 128 of 1990
• Date: 13 November 1992
• Year: 1992
• Published date: 19 September 2003
• Plaintiff Counsel: Foo Soon Yien (Bernard Rada & Lee)
• Citation: [1992] SGCA 79
• Defendant Counsel: Berny Johns (Johns & Co)
• Court: Court of Appeal (Singapore)
• Subject Matter: Land,Contract,Alterations to property without building control approval,Objection to title,Whether constituting defect of title,Sale of land,Duty of disclosure

Cur Adv Vult

This is an appeal from the judgment of Goh Joon Seng JC (as he then was) whereby he dismissed the appellant`s application by a vendor and purchaser summons for a declaration that the respondents were not entitled to rescind a contract for the purchase of a property and that the appellant was entitled to forfeit the deposit paid by the respondents and for other reliefs.

The facts are fully set out in the learned judge`s judgment, reported in [1991] 2 MLJ 15 . We can be brief. The appellant was the owner of a property known as No 4 Joan Road, a two-storey bungalow. On 11 May 1990, the appellant granted an option to the respondents to purchase the property at the price of $2.5m. The respondents exercised the option on 1 June 1990, thereby bringing into being, a binding contract for the sale of the property. Completion date was set for 24 August 1990. The sale was subject to the Singapore Law Society`s Conditions of Sale 1981 and to the special terms and conditions set out in the option to purchase.

After the exercise of the option, the respondents discovered that the appellant had, after he became owner of the property in October 1989, just over seven months before the present contract, carried out certain demolition works and substantial additions and alterations to the property. In their solicitors` letter to the appellant`s solicitors dated 21 August 1990, they told the appellant that their inquiries had revealed that the following works had been carried out without the necessary planning permission:

(1) the roof over the patio;

(2) the mono-pitch roof to the main entrance;

(3) the demolition of the garage and servant`s room including the toilets;

(4) the metal structure where the garage servant`s room and toilets stood;

(5) the demolition of the covered roofing structure at the rear;

(6) the railing at rear flat terrace over lounge;

(7) the timber fence;

(8) the tinted aluminium glass panes at lounge area;

(9) the toilet in the servant`s room;

(10) the treatment of window surrounds;

(11) the new roofing to external of dining and kitchen area.

By the same letter of 21 August, the respondents` solicitors gave notice to the appellant`s solicitors purporting to rescind the contract on the ground that there had been a `serious misrepresentation as to quality of a fundamental character`. They demanded the return of the $250,000 deposit paid by the respondents. The appellant did not agree with the respondents` stand, and took out the originating summons by which he sought the remedies mentioned above.

There is no dispute that these works were carried out, although the appellant`s description of them differs somewhat in detail from the above description.

It is also not in dispute that at the time of the making of the contract, the fact that these works had been carried out was not disclosed to the respondents. Indeed, as the judgment shows, the appellant was not very forthcoming in disclosing the information in the requisitions.

Before the learned judge, the respondents did not pursue their original contention (in the correspondence) that the appellant was guilty of `misrepresentation as to the quality of a fundamental character`. Neither did they pursue their contention (also in correspondence) that the works were in contravention of the planning laws. They relied on the fact that no approval for the works had been obtained under the Building Control Act (Cap 29)(`the Act`), and contended that this constituted a latent defect of title.

The issues which developed before the learned judge were, therefore, firstly, whether the works required the approval of the building authority under the Act; and, secondly, if they required such approval, whether, approval not having been obtained, such unauthorized works constituted a defect of title.

The judge answered both questions in the affirmative, and dismissed the appellant`s application.

On appeal, only the second issue was canvassed before us, ie whether the unauthorized works constituted a latent defect of title at law and as such were subject to disclosure at the date of the contract.

The relevant statutory provisions are as follows. Section 5 of the Act prohibits the commencement or carrying out of any building works unless the building authority has approved all the plans of the building works. `Building works` is defined in s 2 as including the alteration, addition or repair of a building. Section 13(1) of the Act, so far as relevant, provides that where any building works have been carried out in contravention of the provisions of the Act or the building regulations, the building authority may by order in writing require:

...

(b) the demolition of the building; or

(c) such work or alteration to the building or building works to be carried out as may be necessary to cause the same to comply with the provisions of this Act and the building regulations or otherwise to put an end to the contravention thereof ...

Section 13(3) provides that in the event of non-compliance with an order issued under sub-s (1) the building authority may demolish remove or alter such building or building works and recover all expenses incurred. Subsection (4) provides in the event of non-compliance with an order under sub-s (1) for a fine not exceeding $10,000 or imprisonment not exceeding 6 months or both, and in the case of a continuing offence a further fine not exceeding $500 for every day during the continuance of the offence after conviction.

Section 20 of the Act also provides that no building or part of a building where any building works have been carried out shall be occupied in any way without a certificate of statutory completion in respect of that building or that part of the building. It is also provided that any person who contravenes these provisions shall be guilty of an offence and liable to a fine not exceeding $20,000 or to imprisonment not exceeding 6 months or to both, and in the case of a continuing offence, to a further fine not exceeding $1,000 for every day during the continuance of the offence after conviction.

The learned judge approached the matter as follows. He found that as no plans had been submitted to the building authorities for approval, the purchasers would not, in the normal course of inquiries by requisitions, be able to discover the existence of the unauthorized works. He held therefore that the defect was a latent defect. He then posed the question whether the latent defect amounted to a latent defect of title. He referred to a series of authorities from New Zealand and Australia and came down in favour of the view that the defects did amount to a latent defect of title and that the appellant should have disclosed them. The learned judge dismissed the appellant`s application.

General principles

The principles governing the vendor`s duty of disclosure of defects are reasonably well established. Broadly, the position is as follows. The law draws a distinction between defects of quality and defects of title. It also draws a distinction between patent and latent defects. There is no duty to call attention to patent defects, whether of title or quality. As to latent defects, prima facie the rule `caveat emptor` applies to latent defects of quality or other matters (as opposed to defects of title) which affect the value of the property sold, and the vendor, even if he is aware of any such matters, is under no obligation to disclose them. However, the vendor is under a duty to disclose latent defects of title. See 42 Halsbury`s Laws of England (4th Ed) paras 51ff.

The learned editors of Emmet on Title state (citations of authorities omitted):

The general rule of contract is that a vendor is under no duty to disclose material facts to a prospective purchaser, and this applies to contracts for sale of land ... However, there is a term implied into a contract for the sale of land that a good title should be shown by the vendor, ie that he is selling the fee simple free from incumbrances. The implication of such a term does not arise if the purchaser has knowledge, actual or constructive, at the time of the contract of any irremediable defect in the vendor`s title. Consequently, it may be said that a prospective vendor of land has a duty of disclosure to the extent necessary to prevent the implied term arising. In other words, a vendor should disclose to prospective purchasers any defects in his title which are latent and not patent.

The learned editors of 42 Halsbury`s Laws of England (4th Ed) at para 61 say:

Since a vendor`s title to land is exclusively within his own knowledge, he is bound to disclose all latent defects in his title to an intending purchaser. If a purchaser subsequently becomes aware of an irremovable defect of title which the vendor did not disclose to him before entering into the contract, he may rescind the contract or resist its specific performance on that ground.

At para 62, the learned editors express the view that the duty to disclose is absolute, and the vendor`s ignorance of the defect is no excuse. They cite the case of Re Brewer and Hankins` Contract .1

Unauthorized alterations to buildings: whether defect of title

There are several authorities from Australia and New Zealand dealing with the application of these principles to the cases of alterations or additions to dwellings in contravention of building laws and regulations. The cases cited were Vukelic v Sadil-Quinlan & Associates ;2 Maxwell & Anor v Pinheiro & Anor [1979] 46 LGRA 310 Borthwick v Walsh [1980] 1 BPR 9259 Watkin v Wilson [1985] 1 NZLR 666 and McInnes v Edwards [1986] VR 161

These cases were well analysed by the learned judge, and it is not necessary for us to repeat what he has done. In broad terms, in all these cases, the building laws, like our Act, made it an offence to make unauthorized alterations and additions and empowered the authorities to require...