Mooka Pillai Rajagopal and Others v Khushvinder Singh Chopra

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 04 August 1997
• Neutral Citation: [1997] SGHC 205
• Docket Number: Civil Appeal No 108 of 1995
• Date: 04 August 1997
• Published date: 19 September 2003
• Year: 1997
• Plaintiff Counsel: N Sreenivasan and Derrick Wong (Derrick Ravi & Partners)
• Citation: [1997] SGHC 205
• Defendant Counsel: Michael Hwang, Francis Xavier and Naini Parwani (Allen & Gledhill)
• Court: High Court (Singapore)
• Subject Matter: s 128(1) Land Titles Act (Cap 157, 1994 Ed),Land,Test of remoteness and foreseeability,Compensation payable,Whether losses claimed related to caveats lodged or too remote,Caveats,Wrongful lodgment,Pecuniary loss for caveats lodged wrongfully, vexatiously or without reasonable course and/or refusal or failure to withdraw such caveats

Judgment:

CHAO HICK TIN J

This is an inquiry carried out in pursuance of an order of the Court of Appeal in CA 108/95 directing the plaintiff (reported in [1996] 3 SLR 457 at p 475) -

to withdraw the caveats which he has lodged against the property (No 91 Jalan Seaview) and in respect of such caveats we direct an inquiry be held as to the compensation, if any, pursuant to s 128 of the Land Titles Act (Cap 157, 1994 Ed) and the payment of such compensation be made by the respondent to the appellants.

2.The essential facts of the case giving rise to the judgment of the Court of Appeal are succinctly set out in the headnote of the report -

The three appellants [the defendant owners of the property] were the joint tenants of a property. The respondent [the plaintiff] was a solicitor, who had been retained to act for the appellants in a remortgage of the property, and an aborted grant of an option for its purchase. On 14 October 1993, an option in favour of the respondent for the purchase of the property was expressed to be given by the three appellants but was signed only by the second and third appellants, but not the first appellant. However, later all the three appellants granted an option to third parties, which was eventually exercised in November 1993.

In the meantime, on 25 October the respondent purported to exercise the option, discharge himself as the solicitor for the appellants, and lodged a caveat over the property. Discussion then took place between the respondent and the second appellant. A supplemental agreement was prepared by the respondent which was signed by the respondent and the three appellants. The supplemental agreement referred to the option and provided for the sale of the property to the respondent. Subsequently, the respondent procured all the three appellants to sign a statutory declaration prepared by him, confirming the propriety of the supplemental agreement and the transactions before it.

In the event, the appellants refused to proceed with the sale of the property to the respondent, whereupon the respondent sought a declaration that there was a binding sale and purchase agreement, as well as specific performance of that agreement. The appellants alleged undue influence and counterclaimed for damages caused by the caveat lodged by the respondent.

The trial judge found that there was neither presumed nor actual undue influence. And even if there was any, the trial judge held that the statutory declaration and certain letters written by the appellants` solicitors had affirmed the transaction. (See [1996] 2 SLR 379.) The appellants appealed maintaining that there was undue influence, and that there was no affirmation of the transactions.

The Court of Appeal reversed the decision of the court below and held that (i) the plaintiff had not rebutted the presumption of undue influence; (ii) there was actual undue influence; and (iii) there was no affirmation of the sale to the plaintiff.

3.Section 128(1) of the Land Titles Act provides that any person who wrongfully, vexatiously or without reasonable cause -

(a) lodges a caveat with the Registrar,

(b)

(c) being the caveator, refuses or fails to withdraw such a caveat after being requested to do so,

shall be liable to pay compensation to any person who sustains pecuniary loss that is attributable to an act, refusal or failure referred to in paragraph (a), (b) or (c).

4.At the commencement of the inquiry, counsel for the plaintiff sought to argue that no inquiry as to the pecuniary loss should be carried out as the plaintiff was not a person who `wrongfully, vexatiously or without reasonable cause` lodged a caveat or refused to withdraw a caveat. In view of the reasoning and the clear order of the Court of Appeal, I felt that the question of liability has been determined by the Court of Appeal and that I am only to determine the pecuniary loss, if any, suffered by the defendants on account of the caveats being on the register. What I am directed to do is to assess the quantum. I indicated that either party would be free to seek the clarification of the Court of Appeal if he/they think it necessary.

5.From the evidence, it is clear that the plaintiff knew the defendants had granted an option to subsequent purchasers. He knew that the subsequent purchasers had exercised their option. Completion was to take place in February 1994. He knew that the subsequent purchasers had commenced an action for specific performance and damages. Because of the caveats, the sale to the subsequent purchasers could not be completed as scheduled.

6.Before me, the defendants claim for four separate heads of pecuniary loss which they alleged are attributable to the plaintiff`s lodgment of the caveats and his refusal in removing the same. I shall consider each head in turn.

(i) Claim for $10,763.40 interest

7.This head of claim arose in this way. The second and third defendants owed a creditor certain sums of money. Judgment were entered against them. This was followed by a writ of seizure and sale taken out by the creditor against the property. The defendants argued that if the completion of the property had taken place as scheduled in February 1994 the defendants would have had funds to clear the debts of the second and third defendants, and no further interest would have been incurred. The defendants, while recognising that the principal debts have nothing to do with the caveats, argued that as the property could not be sold unless those judgment sums were paid, the property having been attached by a writ of seizure and sale, the interest incurred is consequently a pecuniary loss attributable to the caveats. Each day`s delay in the completion of the sale increased the interest payable. As a further ground that the interest is a legitimate claim, the defendants relied upon the fact that the interest was in fact paid by the subsequent purchasers, who in turn debited that amount against the purchase price.

8.The plaintiff, however, submitted that this claim must fail for the following reasons -

(i) It has not been shown that this loss, the interest, is attributable to the lodging of the caveats. The debts had nothing to do with the property or the caveats.

(ii) The debts were not even the debts of all the defendants, but of the second and third defendants only. If the second and third defendants had the means to pay up the debt, nothing of this would have arisen.

9.Section 128(1) does not elaborate what is `pecuniary loss attributable to (the caveat)`. No case has been cited to me which touched on these words of the section. The ordinary literal meaning of the word `attribute`, as a verb, is `caused or brought about by`. While I can understand the argument that had the caveats been removed, the sale would have been completed, the defendants would have the funds to enable the second and third defendants to pay up the debt and the additional interest would not have arisen, I do not think this loss was caused by or could be attributed to the caveats. The legislature could not have intended to make a caveatee liable for all consequences that may be said to flow from a caveat, no matter how remote or unforeseen those consequences may be. The property was not attached by a writ of seizure and sale at the time the caveats were lodged. This was something wholly unforeseen. As I see it, this loss is too remote.

10.In contrast if a claim had been made for interest lost, namely, the interest which the defendants would have earned on the net proceeds of sale (less mortgage loan and expenses of sale), had the sale to the subsequent purchasers gone through as scheduled, the position could be different. It seems to me such a claim could conceivably come within s 128(1). But that is not what is before me and I say no more.

(ii) Late completion interest and costs payable to...