Siti and Another v Lee Kay Li

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 04 September 1996
• Neutral Citation: [1996] SGCA 51
• Docket Number: Civil Appeal No 14 of 1996
• Date: 04 September 1996
• Published date: 19 September 2003
• Year: 1996
• Plaintiff Counsel: Michael Hwang and Tan Chuan Thye (Allen & Gledhill) and Eng Cheh Hong (CH Eng & Frois)
• Citation: [1996] SGCA 51
• Defendant Counsel: Jimmy Yim (Drew & Napier) and Loy Wee Sun (Bernard Rada Barker & Pauline Chen)
• Court: Court of Appeal (Singapore)
• Subject Matter: Repudiation,Completion,s 4 Conveyancing and Law of Property Act (Cap 61),Termination when in breach,Land,Contract,Vendor and purchaser summons,The Law Society's Conditions of Sale 1994 condition 29(2),Termination for a wrong reason where a right one existed,Scope,Discharge,Sale of land,Validity of notices to complete,Acceptance of repudiation

Cur Adv Vult

This appeal arose from the decision of the High Court in which it was held that the sale and purchase of a flat under an agreement made between the respondent as the vendor and the appellants as the purchasers was aborted on the ground that both the parties had failed to discharge their respective obligations. [See [1996] 2 SLR 59 .]

The facts

The relevant facts that led to this appeal are as follows. On 8 June 1995 the respondent (the vendor) gave to the appellants (the purchasers) an option in writing to purchase a flat known as Unit #04-F1, Type F, Springvale, East Coast Road (the property) at the price of $735,000 on and subject to the terms and conditions stated therein. On 22 June 1995 the purchasers duly exercised the option and thereupon a sale and purchase agreement (the agreement) was made between them. Among the terms agreed upon is one which states that the sale is subject to the Singapore Law Society`s Conditions of Sale 1994 (the Law Society`s Conditions) in so far as they are applicable to a sale by private treaty and are not varied by or are inconsistent with any of the terms contained in the agreement. A deposit amounting to 10% of the purchase price was paid to the solicitor for the vendor to be held as stakeholder. Under the agreement, completion of the sale and purchase was fixed for 14 September 1995. The transaction entered into was in effect a sub-sale of the property by the vendor to the purchasers. The vendor had earlier purchased the property from Hume Taipan International Pte Ltd (the developers) under a sale and purchase agreement made with the developers (the original sale agreement).

Before the completion date arrived, a number of matters in dispute arose between the parties. These primarily were: (i) the outstanding maintenance charge payable on the property, (ii) the withdrawal of a caveat lodged by a third party, and (iii) the production of receipts of the progress payments made by the vendor to the developers.

As regards the maintenance charge, on the contractual date of completion, namely, 14 September 1995, the vendor`s solicitor notified the purchasers` solicitor that maintenance charge for the property amounting to $1,631.52 for the period from 4 August to 14 September 1995 was payable. He computed the amount to be borne by the vendor and requested the purchasers to deduct that amount from the balance of the purchase price. The purchasers` solicitor replied that he had already obtained the cashier`s order for the completion, and informed the vendor`s solicitor that the vendor should pay the maintenance charge and interest thereon before completion. The vendor`s solicitor in response then said that the vendor would pay to the developers the maintenance charge on completion, and the purchasers would have to pay their proportionate amount of the charge. However, no payment was made by the vendor on that day, 14 September.

The dispute about the withdrawal of the caveat arose in this way. There were two caveats on the property filed by Overseas Union Trust Ltd, which had to be withdrawn on completion. On 14 September the vendor`s solicitor faxed to the purchasers` solicitor a copy each of the two withdrawals. The latter found two defects in one of the withdrawals, namely: (i) there was an omission to state one of the lots involved, and (ii) although the caveator`s solicitor had not signed the form, it bore the signature of the witness to his signature. These were brought to the attention of the vendor`s solicitor, and he then faxed to the purchasers` solicitor an amended form which contained the lot number which was previously omitted, but still bore the witness`s signature without the signature of the solicitor who was to sign it. The purchasers` solicitor took issue with this.

The third disagreement concerned the receipts of the progress payments made by the vendor to the developers under cl 3(1)(a)-(h) of the original sale agreement. Two days before the contractual date of completion, the purchasers` solicitor asked the vendor to produce either the developers` receipts of the progress payments made, or alternatively, a letter from the developers confirming that no progress payment and/or interest was owing by the vendor. On the date of completion, however, the solicitor required, among other things, the production of the developers` receipts of the vendor`s progress payments made under cl 3(1)(a)-(h). The vendor`s solicitor replied that the developers` solicitor would confirm in the `completion letter` that 85% of the purchase price (ie the total of the progress payments under cl 3(1)(a)-(h)) had been paid and that there were no payments or interests outstanding. The purchasers` solicitor did not appear to accept this and said that his clients would be prepared to proceed to complete on (i) the vendor`s solicitors` undertaking to produce the receipts within 14 days, and (ii) the developers` confirmation that there were no `outstanding progress payments, maintenance charges, GST thereon and payments of any other kind and GST thereon`. In response, the vendor`s solicitor repeated substantially what he had previously said and emphasized that the developers` solicitor would give the confirmation `in no uncertain terms`. This did not appear to be acceptable to the purchasers` solicitor.

By the date of completion nothing was achieved and the sale and purchase was not completed. Immediately thereafter, on 15 September 1995 both solicitors on behalf of their respective clients very promptly issued the 21 days` notices under condition 29(2) of the Law Society`s Conditions requiring completion. On 18 September, the solicitor for the purchasers issued yet another 21 days` notice, the reason being presumably that the earlier one was defective.

Further attempts were made to complete the transaction but were unsuccessful. The 21 days` notice given on behalf of the vendor expired on 7 October 1995, and the vendor`s solicitor informed the purchasers` solicitor that his client was at liberty to forfeit and retain for his own benefit the deposit and resell the property and would initiate an application to court for the release of the deposit held by him as stakeholder. Without further ado, on 10 October, the vendor took out a summons under s 4 of the Conveyancing and Law of Property Act (Cap 61, 1994 Ed), which in due course was heard before Kan Ting Chiu J in chambers.

Decision below

The learned judge considered the three matters in dispute separately. First, in relation to the payment of maintenance charge, he noted that it was governed by condition 6 of the Law Society`s Conditions under which the vendor had to discharge all outgoings by the completion date. On the facts, the vendor was not entitled to have his share of the maintenance charge deducted from the balance of the purchase price payable on completion. The purchasers were entitled to insist that the vendor complied strictly with the terms of the agreement.

Turning to the withdrawals of the caveats, the learned judge accepted that the purchasers were entitled to object to the defect in one of the withdrawals. As the withdrawal was not properly executed, the purchasers were entitled to reject it.

Finally, concerning the production of receipts for the progress payments under the original sale agreement, the learned judge held that the developers` confirmation would be sufficient, for by such confirmation they would be estopped from claiming any other amount from the purchasers. Thus, the purchasers should have accepted the vendor`s offer of the confirmation of the amount received by the developers. The purchasers had no right to demand production of the receipts or an undertaking to produce them.

As a result of his findings, the learned judge was of the view that the vendor was not entitled on 15 September 1995 to issue the 21 days` notice to complete, for he had not then paid the maintenance charge; nor had he produced a properly signed withdrawal of the caveat. The learned judge further held that the purchasers, on the other hand, were also not ready to complete when they issued their notice, for they were not prepared to complete without the receipts. Thus, they had no interest in the property, and could not enforce the agreement; therefore there was no basis for their caveat. He said:

... As both parties had failed to discharge their obligations and the sale was aborted, the purpose for the deposit paid by the purchasers also lapsed. I therefore ordered the purchasers to withdraw their caveat upon the vendor refunding their deposit to them.

At the end of the matter the vendor had to return the deposit he wanted to forfeit, and the purchasers had to withdraw their caveat. This came about because the sale and purchase failed as both parties were only prepared to complete on their own terms.

The appeal

Against this decision the purchasers have now appealed. On the basis of the respective cases filed by the parties, the issues raised are as follows:

(i) the scope of the summons taken out under s 4 of the Conveyancing and Law of Property Act (Cap 61, 1994 Ed);

(ii) whether the 21 days` notice to complete given by the vendor was valid;

(iii) if it was not valid, whether the 21 days` notice to complete given by the purchasers was valid; and

(iv) whether the agreement was terminated and how it was terminated.

Preliminary point

Before we consider the substantive issues, we should dispose of a preliminary point raised by Mr Hwang for the purchasers. The vendor in this case has argued that his notice to complete was valid on the ground that he was ready able and willing to complete on 15 September 1995 when his notice was given, and that as the purchasers thereafter failed to complete, the vendor was entitled to determine the agreement on 7 October 1995, as he did. Counsel submits that it is not open to the vendor to put forward this argument, because if this...