Kok Yin Chong and others v Lim Hun Joo and others
| Jurisdiction | Singapore |
| Judge | Tay Yong Kwang JA |
| Judgment Date | 30 April 2019 |
| Neutral Citation | [2019] SGCA 28 |
| Court | Court of Appeal (Singapore) |
| Hearing Date | 07 March 2019 |
| Docket Number | Civil Appeal No 230 of 2018 |
| Plaintiff Counsel | Tan Gim Hai Adrian, Ong Pei Ching and Goh Qian'En Benjamin (TSMP Law Corporation) |
| Defendant Counsel | Wong Soon Peng Adrian and Ang Leong Hao (Rajah & Tann Singapore LLP) |
| Subject Matter | Land,Strata titles,Collective sales |
| Published date | 09 May 2019 |
This appeal concerns the collective sale of a residential development known as Goodluck Garden (“the Property”). The respondents are three members of the collective sale committee (“CSC”) appointed by the Property’s subsidiary proprietors to act jointly as their authorised representatives in connection with the collective sale application. In the proceedings below, the respondents applied for an order for the collective sale of the Property, pursuant to s 84A(1) of the Land Titles (Strata) Act (Cap 158, 2009 Rev Ed) (“LTSA”). The appellants are the subsidiary proprietors who filed objections to the collective sale.
The respondents’ application was allowed by a High Court Judge (“the Judge”). Although the Judge found the conduct of the CSC and its agents wanting in various respects, he concluded that the transaction was in good faith, taking into account the sale price, which was $68m (or 12.55%) higher than the valuation determined by an independent valuer. The Judge’s full written grounds can be found at
The appellants submitted that the Judge was wrong to do so. Their principal contention was that the Judge had erred in placing too much emphasis on the sale price. They contended that the CSC’s conduct during the entire collective sale process was relevant. Relying on the Judge’s findings, they submitted that the CSC had breached its duty to act with conscientiousness. They argued that a better-than-expected sale price cannot be a “Get Out of Jail” card for the CSC.
We agreed with the appellants that the CSC’s conduct of the collective sale left much to be desired. However, we also agreed with the Judge that the evidence before the court did not support a finding that the transaction was thereby not in good faith under s 84A(9)(
The key facts are undisputed and have been set out comprehensively by the Judge in the GD. We repeat only the salient facts here.
On 27 May 2017, Knight Frank Pte Ltd (“Knight Frank”) gave the Property’s subsidiary proprietors an overview of the collective sale process. Knight Frank informed them that the estimated sale price was at least $455.8m and that the estimated development charge (“DC”) payable for the redevelopment of the Property was $48.4m.
Knight Frank’s estimation of the DC was an important issue in this appeal. Essentially, the DC is a tax payable by developers to the relevant authorities when planning permission is granted to carry out a development project which increases the value of the land. This Court explained in
On 1 July 2017, an extraordinary general meeting (“EGM”) of the management corporation was convened. The CSC was constituted at this EGM to act jointly on behalf of the subsidiary proprietors for the purposes of a collective sale. The CSC comprised six members, including the three respondents. The first respondent, Mr Lim Hun Joo (“Mr Lim”) became the chairman of the CSC. Sometime in early July 2017, the CSC appointed Knight Frank as the marketing agent and Rajah & Tann Singapore LLP (“R&T”) as the legal advisors for the collective sale.
On 9 September 2017, an EGM of the management corporation was convened. It was attended by subsidiary proprietors, in person or by proxy, who collectively own 135 units in the Property. At the EGM, Knight Frank shared a proposed reserve price of $500m for the collective sale and an estimated DC of around $58.5m, subject to verification. Knight Frank explained the apportionment method of sale proceeds while R&T went through the terms and conditions of the collective sale agreement (“CSA”). The CSA stated that the reserve price was $500m but was subject to change. However, no formal vote was held at the EGM for the approval of the apportionment of sale proceeds and the terms and conditions of the CSA. Instead, subsidiary proprietors who collectively own 76 units signed the CSA after the EGM was concluded, on the same day.
On or around 24 November 2017, Knight Frank sent letters to the subsidiary proprietors to inform them that the CSC had resolved to increase the reserve price to $550m.
By 15 January 2018, subsidiary proprietors of the lots with not less than 80% of the share values and not less than 80% of the total area of all the lots had signed the CSA. In other words, the 80% consent threshold required for making any collective sale application pursuant to s 84A(1)(
On 25 January 2018, an owners’ meeting was convened and Knight Frank informed the subsidiary proprietors that the Property would be launched for sale by way of public tender on 26 January 2018, that the estimated DC was $63.19m and that it had appointed an architect to carry out the DC verification.
On 26 January 2018, the Property was launched for sale by way of public tender, which would close on 7 March 2018. When the Property was launched for sale, Knight Frank’s sent emails to 652 potential bidders on its database to notify them of the launch. In the emails, Knight Frank mentioned that the reserve price was $550m, that there was an additional estimated DC of approximately $63.2m and that Knight Frank was awaiting a reply from the authorities on a matter relevant to the verification of the DC.
On 26 February 2018, it emerged that no DC would be payable for the Property. Knight Frank immediately began updating potential bidders (but not the subsidiary proprietors) that no DC was payable. There were also urgent discussions between Knight Frank and the CSC. Knight Frank advised that there was no reason to extend the closing date of the tender which was on 7 March 2018. Instead, Knight Frank stated that if any potential bidder requested an extension of the closing date, Knight Frank would discuss the matter with the CSC. The CSC did not disagree with this approach. As it turned out, there was no request for extension of the closing date.
On 7 March 2018, the tender closed as scheduled and the tender box was opened. There were:
In addition, an independent valuation report dated 7 March 2018 prepared by Colliers International Consultancy & Valuation (Singapore) Pte Ltd (“Colliers”) was opened. Taking into account the fact that no DC was payable, Colliers valued the Property at $542m.
The next day, the CSC awarded the tender to the joint-bidders which had submitted the bid of $610m. Thereafter, Knight Frank sent a letter dated 8 March 2018 to the subsidiary proprietors to inform them that a sale and purchase agreement (amended as at 8 March 2018) (“the SPA”) had been entered into that day in respect of the Property for the sale price of $610m. Knight Frank did not mention in this letter that there was no DC payable.
On 19 March 2018, an owners’ meeting was convened. It was at this meeting that the CSC informed the subsidiary proprietors for the first time that there was no DC payable. Although queries were raised as to why they were not informed more promptly, no assenting subsidiary proprietor sought to withdraw from the CSA. Subsequently, subsidiary proprietors of another ten units added their signatures to the CSA.
On 25 April 2018, the respondents applied to a Strata Titles Board (“the Board”) for an order for the collective sale of the Property. Various objections to the collective sale were filed. On 27 June 2018, the Board ordered a discontinuance of all proceedings before it in connection with the respondents’ application. On 10 July 2018, the respondents applied to the High Court for an order for the collective sale of the Property. On 20 August 2018, the appellants filed their objections to the collective sale.
The Judge heard the application from 12 September 2018 to 14 September 2018 and reserved judgment. He was informed that the respondents had to obtain an order for the collective sale by 26 November 2018, failing which the purchaser who entered into the SPA might treat it as rescinded. He therefore delivered an oral judgment on 26 November 2018 in which he granted the respondents’ application for the collective sale.
The decision belowIn a detailed written judgment that followed on 2 January 2019, the Judge addressed the many grounds of objections which the appellants had raised in the hearing before him.
As a preliminary point, the Judge decided that the appellants were not allowed to raise grounds of objection to the collective sale before the High Court which were not stated in the objections that they had filed to the Board pursuant to s 84A(4). The Judge reasoned that this followed from the plain and ordinary meaning of s 84A(4A), which permits an objecting proprietor to re-file his objection to the High Court, “stating the same grounds of objection”. The Judge highlighted that this would prevent the collective sale application process from being complicated or delayed by the raising of new grounds of...
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