Koh Kim Seng and another v Zhang Run-Zi

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 10 April 2013
• Neutral Citation: [2013] SGHC 79
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 1639 of 2007
• Year: 2013
• Published date: 15 April 2013
• Hearing Date: 07 February 2013
• Plaintiff Counsel: Balasubramaniam Ernest Yogarajah (UniLegal LLC)
• Defendant Counsel: Defendant in person.
• Subject Matter: Land
• Citation: [2013] SGHC 79

Tay Yong Kwang J: The background

This originating summons sought the following orders: the Registrar of Titles be directed to cancel, remove or otherwise expunge all record entry or endorsement of Caveat IA/583776J, lodged on 25 January 2007 by the defendant from the land register comprised in Certificate of title Volume 636 Folio 18; the defendant pays to the plaintiffs compensation pursuant to s 128(1)(c) of the Land Titles Act (Cap 157 2004 Rev Ed) (“Land Titles Act”) as set forth in the affidavit in support filed herein, alternatively that the compensation payable by the defendant to the plaintiffs be assessed; the costs of this application be borne by the defendant on an indemnity basis; and there be any further reliefs that this Honourable Court may deem fit.

The plaintiffs, who are spouses, own 10, Hoot Kiam Road (“the property”), a two-storey terrace house. On 3 January 2007, the plaintiffs granted the defendant an option to purchase the property upon the payment of $10,200 as the option fee. On 24 January 2007, the defendant exercised the option to purchase through her then solicitors, Ascentia Law Corporation. Legal completion was due on 21 March 2007. In early February 2007, correspondence took place between the defendant and the plaintiffs’ solicitors wherein the defendant alleged that the plaintiffs had concealed the fact that future road lines would affect the property. The defendant demanded the return of $51,000 which she had paid pursuant to the option. Her allegations were denied by the plaintiffs’ solicitors. On 15 February 2007, the defendant wrote to the plaintiffs stating “As you did not respond to my letter, I will retract it without prejudice to all my rights”. On 21 and 26 February 2007, the plaintiffs’ solicitors further wrote to the defendant to refute her allegations relating to the property.

On 16 March 2007, Ascentia Law Corporation informed the plaintiffs’ then solicitors that it had no instructions from the defendant regarding the purchase of the property. The plaintiffs’ solicitors requested the return of the original option and this was done the next day. On 26 March 2007, the plaintiffs’ solicitors gave the defendant a 21-day notice to complete the purchase of the property. This notice was sent by registered mail to the defendant’s residential address as well as to her business address. The defendant did not respond.

The defendant lodged a caveat on the property on 25 January 2007 claiming an interest “by virtue of Option/Option to Purchase duly exercised by the Caveator on 24/01/2007” with the purchase price stated as $1,020,000. Pursuant to clause 29 of the Law Society’s Conditions of Sale 1999 (“clause 29”), it was the responsibility of the defendant to procure the cancellation of any entry relating to the contract in any register at her own expense.

On 26 April 2007, the plaintiffs gave an option to purchase the property to another buyer at a price of $1,100,000. Completion due on 5 July 2007 was delayed because the defendant’s caveat remained on the register. On 5 July 2007, the plaintiffs’ solicitors sent a letter to Ascentsia Law Corporation to request the withdrawal of the defendant’s caveat on the property. On 2 August 2007, the plaintiffs lodged an application to cancel the caveat, supported by their statutory declarations setting out essentially the same facts stated above.

However, the defendant sent an undated letter to the Registrar of Titles to object to the cancellation. In that letter, she alleged that after the first plaintiff offered her the property for a reduced price of $1,020,000, she asked him many times “if there were any problems with this land”. She was worried as she had found out that the plaintiffs purchased the property for about $500,000 14 months before January 2007. She claimed that the first plaintiff told her that “he had done a lot of searching to find this land, and that there were no problems with this land”. It was in March that year that her solicitors discovered the property was wholly affected by the proposed Singapore Underground Road System and because of this, the property had a value of only $580,000, much less than the purchase price of $1,020,000, as evidenced in a valuation report dated 23 March 2007 from Acreage Property Consultants which she enclosed with her letter. She claimed that as a result, “the bank will not loan me money to develop the property”. She further alleged in her letter that “because he has cheated me from the beginning, before I even signed the option to purchase, I have lost SGD$50K cash, and lost the chance to use this money to find alternative properties”. She ended the letter claiming that “I am in the process of suing him in court over this matter, and I respectfully ask that the property in question is not allowed to be sold to another owner until this matter is cleared by the courts”.

As a result of the defendant’s letter, the Registrar of Titles requested the plaintiffs to apply to court for a determination of the matter and stated that the Registry of Titles would withhold the cancellation of the caveat pending any orders by the court.

Accordingly, the plaintiffs commenced this originating summons seeking the orders set out at [1]. Without going into the merits of the defendant’s allegations set out in her letter to the Registrar of Titles, the plaintiffs claimed that the defendant no longer had any legal or equitable interest in the property as she had refused to complete the purchase even after the 21-day notice. The caveat remaining on record was therefore maintained vexatiously and/or frivolously and/or not in good faith. The plaintiffs also claimed damages pursuant to clause 29 and to s 128 of the Land Titles Act resulting from the late completion of the sale to the new buyer.

The court orders and subsequent proceedings

On 29 November 2007, the plaintiffs were represented by counsel while the defendant, a business woman, attended court in person. She spoke in Mandarin through a court interpreter. She repeated in essence what she had alleged in her letter to the Registrar of Titles. She also claimed that she did not receive the 21-day notice to complete as she was away from home for 8 to 9 months and only received the said notice by fax from her previous solicitors in April 2007. She said she had to travel quite a lot and asked that the case be adjourned for her to consult a solicitor on whether she would be able to sue the plaintiffs.

I decided to lift the caveat so as to stop late completion interest from continuing to run against the plaintiffs in respect of the re-sale of the property. I granted the order sought in prayer (1) of this originating summons and ordered all the other prayers to be adjourned. I also directed the defendant to consult her solicitors and to commence action, if so advised, against the plaintiffs within 2 months from 29 November 2007. In the event that no action was commenced by 29 January 2008, the plaintiffs would be at liberty to restore the remaining prayers for hearing. The question of costs was reserved.

Instead of complying with the directions given in [9], the defendant lodged another caveat against the property on 4 December 2007. This led to the plaintiffs taking out Originating Summons No 2 of 2008 to remove the second caveat.

This was heard by Lee Seiu Kin J (“Lee J”) on 10 January 2008. Lee J ordered the removal of the second caveat and prohibited the defendant from taking any steps which may interfere and/or otherwise delay the completion of the sale and purchase of the property by the plaintiffs. My direction of 29 November 2007 regarding the restoration of the remaining prayers of the present originating summons was repeated, with the additional direction that the delay caused by the second caveat would be included for assessment of damages. Lee J also ordered the defendant to pay the plaintiffs costs of $2,000.

Pursuant to my directions in [9] above, the defendant engaged solicitors and commenced MC Suit 2619 of 2008 in the Subordinate Courts on 29 January 2008 against the plaintiffs. The statement of claim in that suit averred that the first plaintiff in this originating summons was aware that the defendant intended to finance the purchase of the property through a mortgage and that her intention was to develop it. She pleaded that one of the express terms of the option to purchase was that she was deemed to have notice and knowledge of road lines affecting the property and shall not annul the sale and purchase nor shall any abatement or compensation be allowed in respect thereof (citing...