Koo Chen Lim and Another v Foo Ah Kim

• Jurisdiction: Singapore
• Judge: S Rajendran J
• Judgment Date: 11 January 1995
• Neutral Citation: [1995] SGHC 6
• Docket Number: Originating Summons No 12 of 1994
• Date: 11 January 1995
• Year: 1995
• Published date: 19 September 2003
• Plaintiff Counsel: Eric Chan (Rajah & Tann)
• Citation: [1995] SGHC 6
• Defendant Counsel: Gan Hiang Chye (Allen & Gledhill) and Chew Teck Lim (Shyam Chew & Co)
• Court: High Court (Singapore)
• Subject Matter: Whether notice given was couched in language which rendered it void,Sale of land,Singapore Law Society's Conditions of Sale 1981 condition 5,Extent of right,Conditions of sale,Land,Vendors' right to rescind contract,Whether vendors acted capriciously in invoking right

On 11 June 1993 the plaintiffs (vendors) entered into an agreement with the defendant (purchaser) for the sale of lots 223-224 and 223-229, mukim 26, together with the building thereon known as No 125 Joo Chiat Place (the property). Completion was to take place on 31 August 1993 and vacant possession was to be given on completion. The sale and purchase was subject to the Singapore Law Society`s Conditions of Sale 1981 so far as the same was applicable to a sale by private treaty and not varied by or inconsistent with the terms of the agreement. A deposit of 10% of the purchase price was paid to the vendors by the purchaser. The following special conditions were stipulated in the agreement.

D The property is sold subject to any party wall rights restrictive or other covenants and conditions affecting the property or its use and to all rights and other easements whatever affecting the same.

G The property is sold on an `as is where is` basis and the purchaser shall be deemed to have inspected the property on or before signing this agreement and to be satisfied as to the state and condition thereof or otherwise.

H If any encroachment is found to exist on the property, the purchaser shall be entitled to rescind this agreement and all moneys paid so far by the purchaser shall be refunded to the purchaser forthwith but without any interest compensation or deduction whatsoever.

A survey of the property was commissioned by the purchaser. On 17 August 1993, the solicitors for the purchaser (M/s Shyam Chew & Co) forwarded a copy of the survey plan and a copy of the report by the surveyor to M/s Rajah & Tann, the solicitors for the vendors. The survey plan and report showed that (a) a wooden store at the rear of the property was straddling lot 223-224 and the adjoining lot 3310; and (b) that the common wall between Nos 125 and 127 was completely within adjoining lot 223-226.

On 19 August 1993, in view of `the encroachment which is found to exist on the (above) property`, Shyam Chew & Co gave notice under special condition 2H of the agreement, that their client was rescinding the agreement for sale and asked for the refund of the 10% deposit within seven days. Receiving no response, Shyam Chew & Co wrote again on 26 August 1993 asking whether the vendors were objecting to their client`s right to rescind under special condition 2H. The letter went on to say that as completion was scheduled for 31 August 1993 the purchaser would (in the event the vendors objected to the rescission) have to take out an urgent application to court for the determination of their client`s rights.

On 27 August 1993, Rajah & Tann responded. They disputed the purchaser`s right to invoke special condition 2H to rescind the sale as the obligation of the vendors to deliver the property free from encroachment (if any) was to be complied with only on completion. They took the position that assuming there was any encroachment it would be removed on or before completion.

On 31 August 1993, Shyam Chew & Co responded as follows:

If, which is denied, that (sic) our client is not entitled to rescind the contract under cl 2H of the agreement, our client hereby rescind the contract on the ground that your clients have failed to show good title of the property in view of the said encroachments even at the date of completion, ie 31 August 1993.

Please note the contract is now effectively rescinded and is null and void and of no effect.

Having sent this letter the purchaser changed her mind and by letter dated 2 September 1993 the purchaser`s solicitors asked Rajah & Tann to disregard their letter of 31 August 1993 and, as they were considering the matter further, also to disregard for the time being their notice of rescission given on 19 August 1993. The letter of 2 September 1993 went on to say:

In the meantime, our client understands that by reason of the encroachments not having been made good, your clients are not able to complete.

In the case of the wooden store on lot 223-224, our client requires it to be delivered intact, with vacant possession and with the title to it being good. At the moment, as we have previously given you notice, the store encroaches onto the neighbouring land and title to it therefore is not good. Without prejudice to our client`s right to exercise his entitlement to rescind if he wishes to do so, you may wish to let us know on an urgent basis how your clients propose to arrange to give to our client a good title to it.

By their reply of 3 September 1993, Rajah & Tann took the position that the revocation of the rescission was of no legal consequence and criticised the purchaser for being `inconsistent and perplexing` for having asserted in the letter of 17 August 1993 enclosing the survey report that there was `encroachment` and now wanting good title to the store which had earlier been described as an encroachment. The letter added:

6 Our clients are ready, able and willing to complete. You would note that our clients` obligations relates only to delivery of good title in respect of the land at No 125 Joo Chiat Place and does not relate to the store itself.

7 We also place on record that your client has informed the occupier of the store yesterday evening that part of the purchase price was meant as compensation for clearing the store. Your client furthermore informed the occupier of the store in the presence of our client that she no longer wanted the store removed. By doing so, please note that our clients are placed in a predicament vis-á-vis the store occupier.

8 In the circumstances, please let us know whether your client wants the store intact or not by Monday, 6 September 1993 .

Shyam Chew & Co replied on 7 September 1993. They denied that their client was being inconsistent and pointed out that their letter of 17 August 1993 referred to the store encroaching on the neighbouring lot 3310 and to the common wall between houses 125 and 127 being completely within the neighbouring lot 223-226. They went on to say:

In short our client is only asserting that the vendors have failed to show good title to that part of the land (ie lots 223-226 and 3310) on which the premises and the store stood.

Our client does not agree your clients` obligations relate only to delivery of good title in respect of the land at No 125 Joo Chiat Place (ie lot 223-226) and does not relate to the store itself (lot 223-226).

In this letter Shyam Chew & Co denied the allegation in para 7 of the letter and concluded:

Without prejudice to our client`s right to exercise her entitlement to rescind if she wishes to do so, please let me know on an urgent basis how your clients propose to arrange to give our client good title to the following:

(a) the store which encroaches on to the neighbouring land at lot 3310, and

(b) the premises known as No 125 Joo Chiat Place which encroaches on the neighbouring land at lot 223-226.

To this Rajah & Tann responded on 8 September 1993 as follows:

2 Contrary to what your client asserts, our clients` obligation to deliver title is clearly spelt out in the sale and purchase agreement and does not extend to the neighbouring lot(s). It is no part of the contract that our clients deliver title to any alleged `encroachment` into a neighbouring lot.

3 It is perplexing that your letter makes reference to the...