Lau Lay Hong and Another v Hexapillar Pte Ltd

• Jurisdiction: Singapore
• Judge: Warren Khoo L H J
• Judgment Date: 17 June 1993
• Neutral Citation: [1993] SGHC 133
• Docket Number: Originating Summons No 61 of 1991
• Date: 17 June 1993
• Year: 1993
• Published date: 19 September 2003
• Plaintiff Counsel: Tan Bar Tien (BT Tan & Co)
• Citation: [1993] SGHC 133
• Defendant Counsel: Margaret Neo (Joseph Hoo Morris & Kumar)
• Court: High Court (Singapore)
• Subject Matter: Refusal by developers to grant abatement,conditions 8 & 11 Conditions of Sale 1981,Sale of land,cll 3(2)(b), 5, 8 & 14 Housing Developers Rules 1976,Agreement for sale and purchase of property,Singapore Law Society,personal representatives to pay interest,Shortfall in area of property,Entitlement of purchaser to abatement of purchase price,Entitlement of developers to give notice to complete,Express terms,Contract,Liability of purchaser's personal representatives to pay interest,Enforceability,Liability of purchaser,Compensation,Land,Conveyance,Whether shortfall of 2.83% substantial enough to warrant compensation,The Singapore Law Society,Contractual terms,Delay in completion,Death of purchaser pending completion

Cur Adv Vult

By a sale and purchase agreement dated 4 February 1983 (`the agreement`), Yeap Leong Aun (`the deceased`) contracted to purchase from the defendants the property known as unit #05-01 in a condominium known as Angullia Mansions, No 18 Angullia Park, Singapore (`the property`) at the price of $850,000. The defendants were the developers of the condominium. It was then in the course of construction.

The agreement was in the form prescribed by the Housing Developers Rules 1976 (as amended) made under the Housing Developers (Control and Licensing) Act (Cap 130). Clause 1 incorporated the Singapore Law Society`s Conditions of Sale 1981 (`the general conditions`) insofar as the latter were `applicable to a sale by private treaty and [were] not varied by or inconsistent with the special conditions` stated in the agreement.

Clause 3 provided for the payments of instalments of the purchase price pegged to the completion of the various stages of the works.

Clause 4 provided that time should be of the essence of the contract as regards payment of the instalments of the purchase price. Clause 5 provided for interest to be paid at 2% above the average prime rate of the four major local banks if any of the instalments mentioned in cl 3 was not paid within the time for payment stipulated in that clause.

Clause 5(3) provided that if any such unpaid instalment and interest remained unpaid for a period in excess of 14 days after the due date for payment, the vendor should be entitled, on giving 14 days` written notice, to treat the agreement as having been repudiated by the purchaser, and, unless the unpaid instalment and interest were paid in the meanwhile, the agreement should be treated as annulled.

Clause 11 provided that within 14 days after the issue of the temporary occupation licence by the authorities, the vendor must give a notice to take possession and the purchaser has the right to take possession. Correspondingly, by cl 3(1)(h) the purchaser had to pay a progress payment of 10% of the purchase price within 14 days after receipt of the notice to take possession. Presumably in accordance with these provisions, possession was taken on 31 December 1983.

By cl 14 of the agreement, legal completion was required 14 days after the receipt by the purchaser of a notice to complete, such notice to be given on or before 30 June 1989. It had to be accompanied by the architect`s certificate that subdivision had been approved.

Clause 3(2)(b), which applied to the case in the event that happened, required that upon completion the purchaser must pay the balance of 20% of the purchase price.

Notice to complete was given on 5 May 1986, within the time specified in cl 14. Unfortunately, before this, on 23 October 1985, the deceased had died in a kidnap attempt in Penang.

On 7 May 1986, the solicitors who had been acting for the deceased informed the defendants` solicitors of the deceased`s death, and that letters of administration were being applied for. These were eventually granted, by the High Court in Penang, on 14 September 1988 and issued on 14 November 1988. Application was subsequently made for the grant to be resealed in Singapore to enable the estate of the deceased in Singapore to be administered. On 16 June 1990, the plaintiffs` solicitors informed the defendants` solicitors that the resealing had been done.

Meanwhile, on receipt of the duplicate certificate of title with the notice to complete, the solicitors for the estate had discovered that the area of the unit shown on the certificate was some 76 sq ft short of the area shown in the agreement. On 9 May 1986, they put the defendants` solicitors on notice of this shortfall and claimed that the defendants were obliged to pay compensation of $24,294.75. This the defendants refused to do. Completion was then left in abeyance pending the resealing of the grant. The subject of the area shortfall was raised again in 1990 after the resealing of the grant, but the defendants maintained their earlier stand.

On 21 December 1990, the defendants` solicitors gave the plaintiffs a further notice to complete within 14 days. They made time of the essence of the contract. By the same letter, the defendants also claimed interest for late payment of the 20% progress payment due on completion under cl 3(2)(b). The plaintiffs said they were not liable to pay interest because the delay in completion was not due to any default on the part of the purchaser. They relied on condition 8(c) of the general conditions (see below). They also reiterated that the deceased`s estate had a right to compensation for the shortfall in area. However, they indicated that they would nevertheless proceed with completion while reserving the two questions for determination by the court.

Completion took place on 2 January 1991 on a without prejudice basis. The plaintiffs paid the balance of the purchase price together with interest for late completion, the latter amounting to $66,788.33. On 21 January 1991, the plaintiffs took out this originating summons seeking the following orders:

(1) A declaration that the plaintiffs were not liable to pay interest for the delay in completion.

(2) Refund of the sum of $66,788.33 with interest thereon at such rate as the court deems fit.

(3) A declaration that the plaintiffs were entitled to compensation for the shortfall in the area of the property, the amount of the compensation to be assessed.

Before I deal with the submissions of counsel, I had better set out the provisions of condition 8. They are as follows:

(8) If the sale shall not have been completed on or before the date fixed for completion, then -

(a) If the delay in completion is attributable solely to the default of the purchaser, he shall pay interest on the amount of the purchase price (less the deposit and any sum paid to account) at the rate of 10% per annum from and including the date fixed for completion until the day of actual completion of the sale.

(b) If the delay in completion is attributable solely to the default of the vendor, he shall pay to the purchaser by way of liquidated damages interest at the rate of 10% per annum on the purchase price of the property from and including the date fixed for completion until the day of actual completion: provided that if possession of the property sold has been delivered by the vendor to the purchaser before the date of actual completion then such damages shall be abated by a sum equal to the rent received by the purchaser or in case the property is delivered with vacant possession by the equivalent of a rent calculated on the annual value of the property fixed under the Property Tax Act.

(c) If the delay in completion is attributable to some cause other than the default of the vendor or the purchaser or to the default of both the vendor and the purchaser, no interest or damages shall be payable.

The...