Kua Beng Koon and Another v Kwok Wai Tien and Another

• Judge: S Rajendran J
• Judgment Date: 20 May 1993
• Neutral Citation: [1993] SGHC 111
• Citation: [1993] SGHC 111
• Defendant Counsel: Chan Tsui Hua (BC Yap & Co)
• Published date: 19 September 2003
• Plaintiff Counsel: Cheah Kok Lim (Low Yeap & Co)
• Date: 20 May 1993
• Docket Number: Originating Summons No 373 of 1993
• Court: High Court (Singapore)
• Subject Matter: Purchaser's right to rescind,Whether reply was unsatisfactory reply to requisition,Conditions of sale,Unsatisfactory reply to legal requisitions,Whether purchaser had notice of the road line,Provision for rescission on unsatisfactory reply to requisition,Sale of land,Road proposal which adversely affected property,Land

Cur Adv Vult

The plaintiffs (`vendors`) are the owners of the leasehold in No 57A Zion Road (`the said property) which is an apartment situated on the second storey of a four-storey building. No 57A is at the corner of the building adjacent to a service road along the side of the block.

On 10 February 1993, the vendors granted to the defendants an option to purchase the said property for a sum of $376,000. The defendants exercised the option on 24 February 1993 by paying to the vendors` solicitors the sum of $32,600 which together with the $5,000 consideration for the option constituted 10% of the purchase price.

On 23 March 1993, the vendors` solicitors received a letter from the defendants` solicitors stating that the road interpretation plan (`RIP`) was not satisfactory in that there was `a road proposal which adversely affects the subject property`. The defendants` solicitors invoked cl 5 of the option and gave notice that the defendants were rescinding the agreement.

The vendors thereupon took out this originating summons seeking, inter alia, a declaration that the answers to the legal requisition in respect of the said property are not unsatisfactory and that on a true construction of cl 5 the defendants are not entitled to rescind the agreement.

In an affidavit filed by the vendors, the vendors have alleged that they as well as the defendants were, prior to entering into the option agreement dated 10 March 1993, aware that there was a road line affecting the property and that the price of the property was negotiated and the option prepared after taking this into account. The defendants deny these allegations. I note that there is no reference in any of the correspondence between the solicitors for the vendors and the solicitors for the defendants that supports the vendors` allegation. It is for the vendors to prove their allegation that the defendants entered into the agreement with the knowledge of the road line. On the evidence, I am not satisfied that they have done so.

The issue in this originating summons turns entirely on the construction of cl 5 which reads:

The sale and purchase herein shall be subject to the purchaser`s solicitors receiving satisfactory replies to their legal requisitions to the various government departments so far as such replies relate to the property and if any of such replies are unsatisfactory in that the said property is adversely affected by the Mass Rapid Transit System or any road or drainage proposal or government acquisition or scheme regardless of whether such proposal acquisition or scheme is to be implemented before on or after the date of completion then this agreement may be rescinded at the option of the purchaser by giving the vendors written notice in that behalf before completion and upon such notice being given, this agreement shall be null and void in which event the vendors shall forthwith refund to the purchaser all moneys paid by the purchaser to the vendors but without any interest compensation or deductions whatsoever and thereupon neither party shall then have any claim or demand against the other for costs damages compensation or otherwise. Provided always that:

(i) no replies to legal requisitions shall be deemed to be unsatisfactory unless the vendors shall have refused or is not able to comply with the same; or

(ii) any replies to legal requisitions or any plan indicating that the said property will be affected by road or drainage proposal or government acquisition or scheme or intended government acquisition or scheme arising from a redevelopment of the said property shall not be deemed to be unsatisfactory; or

(iii) any road interpretation plan or drainage interpretation plan shall not be deemed unsatisfactory by the purchaser if such plan or plans should show that the common property is affected by or marked with a line of road reserved classified as category 5 road or a buffer of 2.3 metres in width and/or drainage rights reserved. [Emphasis added.]

The RIP obtained by the defendants from the Public Works Department revealed that there was a proposal to widen the service road running beside the said property. The extent of the proposal was marked by a red line called `the line of road reserve...