Khushvinder Singh Chopra v Mookka Pillai Rajagopal and Others

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 14 January 1999
• Neutral Citation: [1999] SGCA 7
• Date: 14 January 1999
• Subject Matter: Compensation payable,Calculation of compensation under s 128 of Land Titles Act,Land,Caveats,s 128 Land Titles Act (Cap 157, 1994 Ed),Whether caveator's liability to pay compensation already determined,Wrongful lodgment,Whether caveatees' pecuniary loss recoverable
• Docket Number: Civil Appeal No 27 of 1998
• Published date: 19 September 2003
• Defendant Counsel: Palaniappan (Derrick Ravi & Partners)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Appellant in person

Judgment:

LP THEAN JA

(delivering the grounds of judgment of the court): The facts

1.This appeal is a sequel to the decision of this court in CA 108/95 (`CA 108/95`) which was reported in [1996] 3 SLR 457. The material facts that led to the making of the order under appeal have been fully set out there and are briefly as follows. The respondents were the owners of the house, No 91, Jalan Seaview (`the property`), and the appellant was an advocate and solicitor who acted for them in August 1993 in the re-mortgage of the property, which, however, did not materialise. He subsequently acted for them in connection with an option to purchase given by them to a third party which, again, became abortive. At that point in time, the appellant himself became interested in the property, and on 13 October 1993, he obtained an option signed only by the second and third respondents to purchase the property at the price of $1,200,000. Following the grant of this option, on 18 October 1993, he lodged a caveat on the property at the Registry of Titles claiming an interest under the option. On 28 October 1993, the appellant exercised that option and lodged a second caveat claiming an interest in the property as the purchaser. During the same period, all the three respondents granted an option to purchase the same property to two purchasers jointly (`the purchasers`) who exercised it in November 1993.

2.Subsequently, an agreement expressed to be supplemental to the option (`supplemental agreement`) was prepared by the appellant and was signed by all the three respondents and the appellant in late November 1993 which provided for the sale of the property to the appellant. The respondents subsequently refused to proceed with the sale, whereupon the appellant initiated proceedings against them and sought specific performance of the sale and purchase agreement. The respondents alleged undue influence and counterclaimed damages for the loss caused by the caveats lodged by the appellant. At first instance the High Court held that there was neither presumed nor actual undue influence and granted specific performance of the agreement. The respondents appealed, and this court allowed the appeal and ordered, inter alia, the appellant to withdraw his caveats and directed an inquiry be held as to the compensation, if any, pursuant to s 128 of the Land Titles Act (Cap 157, 1994 Ed) (`the Act`) and the payment of such compensation to the respondents.

3. The decision below

The enquiry was held before Chao Hick Tin J. Before him the appellant sought to dispute the issue of liability to pay compensation under s 128 of the Act. The learned judge held that the question of liability under s 128 had already been determined by this court and that his task was simply to determine the pecuniary loss, if any, suffered by the respondents on account of the appellant`s caveats being on the register. In other words, all that he was required to do was to assess the quantum of compensation.

4.On the quantum, Chao Hick Tin J found that the appellant knew that the respondents had granted an option to the purchasers and that the purchasers had exercised the option with completion scheduled to take place in February 1994. The appellant was also aware that the purchasers had commenced an action against the respondents for specific performance and damages. Due to the existence of the appellant`s caveats on the register, the sale of the property to the purchasers could not be completed in time. The learned judge held that the late completion interest and costs payable to the purchasers, as well as legal costs of defending the action taken out by them against the respondents should be paid by the appellant. On this item the parties subsequently went before the learned judge again and an order by consent was made. Under that order the appellant was required to pay the respondents, inter alia, the sum of $356,560.61 being late completion interest from 21 February 1994 to 18 November 1996 which the respondents had to pay the purchasers in Suit No 237 of 1994.

5.Chao Hick Tin J further found that there was a mortgage on the property and that the appellant could not deny that he did not know of this mortgage which was to secure a loan. The appellant thus would have known that by lodging the caveats, completion of the sale to the purchasers would be hindered and the respondents would have to continue to pay interest on the loan secured by the mortgage until completion of the sale upon his withdrawal of the caveats. The learned judge therefore held that this head of damage was foreseeable and was a pecuniary loss suffered by the respondents which was attributable to the lodging of the caveats and thus recoverable under s 128(1) of the Act. He therefore ordered that the appellant pay the sum of $131,535.40 which was the additional interest paid on the loan secured by the mortgage. The appellant was also ordered to pay the costs of the inquiry relating to the issue whether the court was bound to carry out the inquiry and 2/3 of the costs of assessment of quantum of compensation payable in part by the respondents to the appellant. The appellant appeals against the whole of this decision.

6. The appeal

The appeal raises the following issues: (1). Whether the inquiry before the learned judge was limited to assessing the quantum of compensation, if any, payable to the respondents.

(2). If the scope of the inquiry was not so limited, whether the caveats were lodged by the appellant wrongfully, vexatiously or without reasonable cause.

(3). Whether the additional interest on the loan secured by the mortgage on the property should in any event be disallowed.

7. Issue of liability under s 128

It is convenient at this stage to refer to s 128 of the Act, which reads as follows:

(1) Any person who wrongfully, vexatiously or without reasonable cause -

(a) lodges a caveat with the Registrar;

(b) procures the lapsing of such a caveat; or

(c) being the caveator, refuses or fails to withdraw such a caveat after being required 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).

(2) The compensation referred to in subsection (1) shall be recoverable in proceedings taken in a court by the person who claims to have sustained the pecuniary loss.

(3) A person who is a caveator shall not be entitled to bring proceedings under subsection (1)(b) if that person, having had an opportunity to do so, has failed to take all reasonable steps to prevent the caveat from lapsing.

(4) For the purposes of this section, a caveator shall be deemed to allow a caveat to remain without a reasonable cause if he fails to withdraw it within 7 days of the day on which his right to the interest claimed terminates.

8.It was in pursuance of this section that this court ordered an inquiry to be held. In this connection, it is necessary to examine what precisely was decided by this court in CA 108/95. There, the court found that the option having been signed only by the second and third respondents was an incomplete and unperfected instrument, and when the appellant exercised the option there did not arise a sale and purchase agreement between the respondents and the appellant. Such an agreement was only made when the supplemental agreement was executed by the respondents and the appellant. The caveats which the appellant lodged on 18 and 26 October 1993 were lodged prior to the signing of the supplemental agreement and were based solely on the `option`. The court 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.The court found that at the time the option was signed by the second and third respondents the appellant was acting as the solicitor for the second and third respondents. And at the time the supplemental agreement was executed, although the relationship of solicitor and client between the appellant and the...