Lie Kie Siang v Han Ngum Juan Marcus

• Jurisdiction: Singapore
• Judge: MPH Rubin JC
• Judgment Date: 19 September 1991
• Neutral Citation: [1991] SGHC 130
• Docket Number: Originating Summons No 1212 of
• Date: 19 September 1991
• Published date: 19 September 2003
• Year: 1991
• Plaintiff Counsel: B Ganeshamoorthy (Sai Lim & Ganesh)
• Citation: [1991] SGHC 130
• Defendant Counsel: Gan Hiang Chye (Allen & Gledhill)
• Court: High Court (Singapore)
• Subject Matter: Quantum,Failure to complete,Breach of contract for sale and purchase of flat,Measure of damages,Power of court to assess damages based on market value at date other than date of breach,Contract,Remedies,Determination of market value at date of breach,Damages

Cur Adv Vult

Liability having been admitted by the defendant on the day this matter originally came up for hearing before Goh Joon Seng J on 4 February 1991, what remains to be resolved in the main is the quantum of damages payable to the plaintiff by the defendant on account of the defendant`s breach of contract under a sale and purchase agreement of a flat.

The resolution of the issue could have been less complicated had it not been for the dispute as to the material date on which the value of the subject matter is to be arrived at. It was contended on behalf of the plaintiff that the relevant date should be 23 October 1990. The defendant, on the other hand, maintained that it should be 1 July 1989.

The divergence as to what should be the boundary date is all the more important since the subject matter of the dispute arises from an agreement to sell a residential property and property prices experienced an uptrend between 1 July 1989 and 23 October 1990. The facts which gave rise to this litigation, though made complex by the parties, could be summarized as follows.

On 14 April 1989, the defendant gave the plaintiff an option to purchase his flat at Pandan Valley known as No 4 Pandan Valley, #04-401 Eugenia Court, Singapore (`the flat`). The sale price was $460,000. The option fee was $5,000. The terms of the option required that it be exercised on or before 22 April 1989 by payment to the defendant of a sum of $41,000.

However, before 22 April 1989, prior to exercising the option, the plaintiff learnt that there was a bankruptcy notice issued against the defendant by Singapore Aviation & General Insurance Ltd (`SAGI`) for a principal sum of $78,539.46. The spectre of the bankruptcy proceedings prompted the plaintiff to demand an amendment to the option which was, to require the defendant`s solicitors to hold the sum of $41,000 as stakeholders pending completion of the sale.

The amendment having been agreed, a fresh option dated 22 April 1989, the terms of which were identical to the option dated 14 April 1989 except for the stipulation that the sum of $41,000 should be held by the defendant`s solicitors as stakeholders, was given to the plaintiff. The option was duly exercised on the same date by payment of the sum of $41,000 to the defendant`s solicitors.

At the time the defendant was requested by the plaintiff to agree to the amendment to the option, there were in fact two bankruptcy notices issued against the defendant - one by SAGI in Bankruptcy No 3661 of 1988 and another in Bankruptcy No 3388 of 1988 by another creditor known as Playthings for a principal sum of $70,083.89. The defendant claimed, however, that when the plaintiff or his solicitors made reference to Bankruptcy Notice No 3661/88 issued at the instance of SAGI, the defendant erroneously inferred that it was a reference to the bankruptcy proceedings instituted against him by Playthings. As he was confident during that period that he could settle with Playthings, he conveyed the impression to the plaintiff that he could sort out the bankruptcy notice before completion.

The stipulated date for completion of the sale of the flat was 1 July 1989. The defendant`s liabilities at that material time included a sum of $483,149.25 outstanding to the United Overseas Bank in respect of mortgage, arrears of maintenance owing to the management corporation in respect of the flat amounting to $11,279.52 and an outstanding property tax of $585.60. These sums were in addition to what he had to pay Playthings. The other sum owing to SAGI, for reasons earlier adverted to, did not feature in the defendant`s mind.

It was contended on behalf of the defendant at this hearing that though the defendant was in considerable financial difficulties at about the time of the proposed completion date, the defendant would have been able to settle all his debts except for the debt owing to SAGI.

The defendant became, as he claimed, aware of SAGI`s bankruptcy notice only in June 1989. The SAGI debt was beyond his stretch at that point of time. He was not able to settle the debt owing to SAGI and was plainly not able to persuade SAGI to withdraw the bankruptcy notice issued against him.

A few days before 1 July 1989, the defendant, having been overwhelmed by the burden of his debts, informed the plaintiff (through a telex by his solicitors dated 27 June 1989) that he was unable to settle SAGI`s bankruptcy notice and wanted to know whether the plaintiff would proceed to complete the sale disregarding the pending bankruptcy proceedings against him by SAGI.

It was an endeavour in vain. The plaintiff did not wish to complete without resolving the bankruptcy notice. However, the plaintiff, through his solicitors informed the defendant`s solicitors that the plaintiff had no objection to the purchase of the flat by a mortgagees` sale by the defendant`s mortgagees, United Overseas Bank (`the bank`).1 July 1989 marched past uneventfully whilst the parties were trying to wear each other down by arguments concerning damages and interest charges for late completion.

Noting the defendant`s inability to perform his part of the contractual obligations, the plaintiff`s solicitors wrote to the defendant`s solicitors on 6 July 1989 as follows:

6 July 1989

M/s James & Co,

...

Re: Purchase of 4 Pandan Valley #04-401 Eugenia Court, Singapore

We refer to the above matter which was contracted for completion on 1 July 1989.

We note that your client is not able to complete . Our client hereby serves yours notice under cl 8(b) of the Singapore Law Society`s Conditions of Sale 1981 ie interest for late completion will be payable by your client. Our client also reserves his rights under the contract.

Subject to the above, we would refer to your letter of 4 July 1989. Our client`s stand on the matter is already expressed in our letter of 29 June 1989 (particularly on the last paragraph thereof).

Our client however is agreeable to the third paragraph of your aforesaid letter only after the contract is executed between the mortgagee and our client and upon successful completion of the mortgagee`s sale. The mortgagee`s sale must also take place within seven (7) days from the date hereof . (Emphasis added.)

Yours faithfully,

(Signed)

Ng Yap & Partners

cc Mr Lie Kie Siang

On 7 July 1989, the plaintiff`s solicitors wrote to the bank`s solicitors requesting them to forward the draft sale contract. The said letter, inasmuch as is material to these proceedings, reads as follows:

7 July 1989

M/s Khattar Wong & Partners

...

Re: Mortgagee`s sale of No 4 Pandan Valley #04-401 Eugenia Court, Singapore

We act for Mr Lie Kie Siang, the purchaser of the above-mentioned property and would refer to M/s James & Co`s letter of 6 July 1989 to you and copied to us.

Please forward to us the draft mortgagee`s sale contract together with engrossment thereof for our client`s execution (if there are no substantial amendments to be made thereto).

Yours faithfully

(Signed)

Ng Yap & Partners

cc client

Mr Lie Kie Siang

Fax No 2971644

Unhappily, the issues became a little convoluted when the solicitors started posturing on the question of interest payable to the plaintiff on account of the late completion. All the same, the defendant`s solicitors` letter dated 11 July 1989 made known to the plaintiff that the sale between the defendant and the plaintiff must be deemed abortive. That letter reads as follows:

11 July 1989

Messrs Ng Yap & Partners

...

Re: Purchase/Sale of 4 Pandan Valley #04-401 Eugenia Court

We refer to the above matter and to your letter dated 6 July 1989.

Our client is surprised that your client is giving him notice to complete and that your client intends to charge interest for late completion. Considering the circumstances of this case, your client ought to be fully aware that our client cannot complete not because he does not wish to but because there is a bankruptcy action pending against our client.

In the circumstances, our client is not in a position to complete the sale or give a `clean title`. Consequently, our instructions are to call off the sale and to refund your client the sum of $41,000 being the 10% deposit less $5,000 option moneys paid directly to our client.

We think that this is the best in the circumstances of the case, especially as your client intends to now complete with our client`s mortgagee by way of a mortgagee`s sale.

As regards the sale between our client and yours we give notice that it must now be deemed abortive. In this regard we now enclose herewith our cheque for $41,000 on your undertaking that you will return to us within three days hereof all the title deeds we have sent you earlier.

As regards your client`s desire to press for interest charges, damages, etc our client denies that your client is entitled to such remedies, however your client is at liberty to proceed as he wishes and we shall seek our client`s instructions whether we can accept service of process on his behalf.

Yours faithfully

(Signed)

James & Co

Encl

The purport of the letter put the matter beyond doubt. It was an unequivocal act on the part of the defendant that he was unable to complete the sale. The letter further purported to crystallize his stand. The threat of legal proceedings loomed large and real at this stage. Both parties were openly making reference to the issue of damages.

Yet in another letter by the defendant`s solicitors, again it was made known that the defendant was unable to settle or remove the bankruptcy proceedings against him. Moreover, in that letter, the defendant`s solicitors sought, perhaps vainly, refuge behind cl 5 of the Law Society`s Conditions of Sale 1981 which provides that:

If the purchaser shall make and insist on any objection or

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