Ku Yu Sang v Tay Joo Sing and Another

• Jurisdiction: Singapore
• Judge: Warren Khoo L H J
• Judgment Date: 07 October 1993
• Neutral Citation: [1993] SGHC 238
• Date: 07 October 1993
• Subject Matter: Option did not contain all agreed material terms,Sale and purchase of land,Whether specific performance available to make a disposition of half share of property owned by two defendants,Specific performance,s 4 Statute of Frauds 1677 [UK],Measure of damages,Proceedings against one defendant only,Sale and purchase of property,Plaintiff did not plead for rectification,Remedies,Contract,Express terms,First defendant represented that he had authority to sell half share of property on second defendant's behalf,Breach of warranty of authority,Whether equitable remedy of rectification available,Damages,Contractual terms
• Docket Number: Suit No 1245 of 1989
• Published date: 19 September 2003
• Defendant Counsel: Cheong Aik Chye (Judy Loke & Cheong)
• Court: High Court (Singapore)
• Plaintiff Counsel: Sum Chong Mun and Margaret Wan (Braddell Brothers)

Cur Adv Vult

The plaintiff`s claim is for the specific performance of a contract for the sale of a shop unit known as B1-124 Lucky Plaza, Orchard Road (`the property`). As originally framed, the claim was against both defendants in respect of the whole of the property, and alternatively against the first defendant only for specific performance in respect of his half undivided share of the property, and damages for breach of warranty of authority or misrepresentation. There was and is a claim for damages in lieu of specific performance. As the plaintiff was unable to serve the writ on the second defendant, who had apparently migrated to Australia, he proceeded on the alternative claim against the first defendant alone for specific performance (or damages in lieu) in respect of the first defendant`s half undivided share in the property, and for damages for breach of warranty of authority or misrepresentation.

The two defendants are brothers. They hold the property as tenants-in-common in equal shares. They had been wanting to sell the property from as far back as 1985. Victor Sim, a property broker, was asked to help sell the property. It was through Sim`s effort that the plaintiff became a prospective buyer. It is common ground that a meeting took place on 2 May 1987 between the plaintiff, the defendant and Sim at the plaintiff`s office at Fu Lu Shou Complex to discuss and negotiate the sale of the property. It is also common ground that at the conclusion of the meeting, a document, PB-1, was drawn up and signed by the parties and a cheque for $5,000 was handed by the plaintiff to the defendant. The plaintiff contends that the document constituted a valid option to purchase the property, exercisable by him within 14 days by the payment of the balance of the 10% of the purchase price of $470,000. The defendant, on the other hand, contends that the sale was subject to the confirmation of his mother and to the agreement of his brother the second defendant, and that it was also subject to the execution of a contract to be drawn up by solicitors. He also says that PB-1 was merely an acknowledgment of the receipt by him of the $5,000 cheque. He also raises a defence based on the Statute of Frauds.

The plaintiff`s evidence

The plaintiff`s evidence is that around the end of April 1987, Sim told him that the property was available for sale. The plaintiff went to look and found that the property was suitable for his needs. He was a jeweller and was interested in buying the property to set up a branch for his business and also for investment. Sim told him that the defendant and his brother were the owners and they wanted $490,000 for it. At the plaintiff`s request, a meeting was arranged for the afternoon of 2 May to discuss the sale.

At the appointed time, Sim showed up with only the defendant. The plaintiff says he had expected to see both owners, and he asked why only one had turned up. The defendant replied that the second defendant was abroad but that he had the full authority of the second defendant to sell the property. Sim also assured him that there was no cause to worry. The plaintiff says that he saw no reason to doubt what the defendant said.

The parties then discussed the purchase price. The defendant asked for $490,000 while the plaintiff offered $460,000. After some bargaining, the defendant stated that both he and the second defendant had agreed that they would not sell the property for less than $470,000. The plaintiff then agreed to that price. The defendant requested a deposit of $30,000, but the parties eventually settled on a deposit of $5,000. This was suggested by Sim. It was, according to him, the usual sum for an option fee, being roughly 1% of the purchase price. Both the plaintiff and the defendant wanted the transaction documented. As Sim had not brought a printed option form with him, he dictated one to the plaintiff`s secretary in the following terms:

Mr Tay Joo Sing and Mr Tay Joo Meng

48 Marshall Road

Singapore 1542

2nd May 1987

Re: B1-24 Lucky Plaza, 304 Orchard Road, Singapore 0923

This is to confirm that we, Mr Tay Joo Sing and Mr Tay Joo Meng, owners of the above-mentioned property, hereby agree to sell to Mr Ku Yu Sang, NRIC No 1841358/B, at the purchase price of SGD470,000 (Singapore dollars four hundred seventy thousand only.)

We hereby confirm that we have received a deposit of SGD5,000 only (DBS 588590) as part of the option fee.

This contract valid for 14 days only.

This property is sold with vacant possession.

Seller`s signature

Mr Tay Joo Sing (I/C No 0068340/Z)

Buyer`s Signature

Mr Ku Yu Sang (I/C No 1841358/B)

Witness,

Mr Victor CT Sim (I/C No 1461894/E)

After it was typed, Sim explained its contents to the plaintiff and the defendant. In particular, Sim explained that the plaintiff had to pay the balance of the 10% of the purchase price within 14 days, and that if he did not do so, the $5,000 paid would be forfeited and the document would be void. The defendant then signed it, followed by the plaintiff, and Sim. The signed document is PB-1 . The plaintiff has no doubt that PB-1 was a binding contract for the sale of the property.

The plaintiff handed to the defendant a cheque for $5,000 drawn on the Development Bank of Singapore. Each party took a copy of PB-1 . They exchanged names of their solicitors. The meeting ended.

That was Saturday. On Monday, 4 May, the defendant`s solicitors informed the plaintiff`s solicitors that the second defendant was not agreeable to selling the property. They returned the $5,000 cheque. The plaintiff did not accept this position. On 13 May 1987, the plaintiff`s solicitors on his instructions sent to the defendants` solicitors a cheque for $42,000, the balance of the 10% of the purchase price, in accordance with what the plaintiff understood was the agreement with the defendant. They also re-tendered the earlier cheque for $5,000. On 16 May 1987, the defendant`s solicitors returned both cheques. The plaintiff tried to resolve the matter but he was not successful. On 30 June 1989, he took out the writ in this action.

The plaintiff`s evidence is substantially corroborated by Sim`s testimony at the hearing. Sim had also, on 20 May 1987, shortly after the event, at the request of the plaintiff`s solicitors, made a statutory declaration about what took place at the meeting and afterwards. Both in court and in the statutory declaration, Sim says that he had been instructed by the defendant to sell the property from 1985. The defendant had told him that the property was registered in his and his brother`s names, and that the brother had authorized the defendant to sell the property on his behalf. Sim also says that at the meeting on 2 May 1987, the defendant told the plaintiff much the same thing.

Sim also confirms that he explained the terms of PB-1 to the parties. In particular, the option was to be exercised within 14 days by payment of the balance of the 10% of the purchase price.

Both the plaintiff and Sim firmly stated that at no time during the meeting did the defendant say that the sale was subject to his brother`s consent or to his mother`s confirmation of the price.

The defendant`s evidence

The defendant says that he had been advertising the sale of the property since 1985. The best price he had been offered was $900 per sq ft, or $368,000. On the morning of the day in question, Victor Sim told him over the phone that he had found a prospective buyer. As he was going out, he asked Victor Sim to confirm the price with his mother. Later in the day, Sim rang him up again and told him that Sim had confirmed the price of $470,000 with his mother. Although the defendant himself wanted to confirm it direct with his mother before going to meet the prospect, she was not around. Sim told him it was not necessary, and on that he went with Sim to the plaintiff`s office in the Fu Lu Shou building.

The defendant said that he told the plaintiff that his brother, the other owner, was in Australia and that the brother had to sign any contract if there was a deal. He also needed to confirm the price with the brother. After the price of $470,000 was agreed, on Sim`s suggestion, the plaintiff gave him the cheque. He told the plaintiff that he would not pay in the cheque unless his brother agreed to the sale. The plaintiff requested a receipt for the cheque, and as he did not have a receipt book, Sim drafted PB-1 for everyone to sign. To him then, and now, PB-1 was nothing more than an acknowledgment of the receipt of the cheque. He certainly did not think that it could be a contract. If any contract was to be drafted, it would have to be done by solicitors. Hence, the exchange of names of the parties` solicitors at the meeting.

The defendant also denied that he told either the plaintiff or Sim that he had been authorized by his brother to act in the sale on the latter`s behalf.

When he went home, he found out from his mother that Sim had not spoken to her at all about the price. On the same evening, on the telephone, his brother also told him from Australia that he was not going to sell. So on Monday, 4 May, he told Sim and Ku, and also instructed his lawyers to return the cheque.

The mother, Madam Ng, was called. The only thing she could recall was an offer in 1985 from Sim for the property. It was too low and she did not accept. She said she did not have authority to sell the property for her sons. She could not recall if the second defendant told her how much he wanted. She could not recall about the defendant telling her that he had got a cheque for $5,000 from a buyer. She was generally not very helpful, and it is not surprising that she was not asked whether she had to confirm the price for the property as the defendant says she had to.

The issues

The first issue of fact is whether or not the defendant represented to the plaintiff that he had his...