Lim Bio Hiong Roger v City Developments Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 16 December 1999
• Neutral Citation: [1999] SGCA 86
• Docket Number: Civil Appeal No 67 of 1999
• Date: 16 December 1999
• Year: 1999
• Published date: 19 September 2003
• Plaintiff Counsel: Davinder Singh SC and Tan Cheng Yew (Tan Cheng Yew & Partners)
• Citation: [1999] SGCA 86
• Defendant Counsel: K Shanmugam SC and Muralidharan Pillai (Allen & Gledhill)
• Court: Court of Appeal (Singapore)
• Subject Matter: Discharge,Sale of land,Words and Phrases,Relevance of expert evidence in determining industry usage and practice,'Built-in area',Land,Meaning of 'built-in' area,Contract,Rules governing construction of contract,Whether different from 'built-up' area,Meaning of 'built-in' area of property,Whether developer in breach for shortfall in 'built-in' area of property,Contract for sale of land,Breach

(delivering the grounds of decision of the court): This appeal arose out of the decision of Rubin J (`the trial judge`) in which he dismissed the appellant`s claim against the respondent (`CDL`) for damages on account of breach of contract/warranty or misrepresentation as to the size of the `built-in` area of the house which the appellant (`Lim`) had bought from CDL. At the conclusion of the hearing, we dismissed the appeal and we now give our reasons.

The facts

CDL is a large, public-listed company whose primary business is that of property development. Lim is a computer engineer holding a degree in physics. Up to the time of the trial, he had owned, at one time or another, at least eight properties. His wife was and is a real estate agent and he was and is a director in his wife`s real estate agency.

In 1994, CDL was developing a site at Fifth Ave/Sixth Ave, off Bukit Timah Road. It was named `Avenue Villas` (`the project`) and consisted of eight detached houses. At the time, the construction of the project had yet to begin. CDL marketed the project by way of a sales brochure. To enable potential buyers to perceive what they were buying, they were also invited to view miniature models of the houses at its marketing office.

On 3 October 1994, Lim viewed the miniature models of the project at CDL`s marketing office. He was handed a copy of the sales brochure, together with a price list which was enclosed therein.

On 11 November 1994, Lim decided to purchase the house which was numbered as No 28 Avenue Villas (`the property`). The property was indicated as a `Type A` bungalow in the brochure. He paid a 10% booking fee and was granted an option to purchase the property for $8,648,000. He was given a 5% discount on the listed price. The option identified the property by reference to the brochure. The appellant`s wife acted as broker for the transaction. She received the commission for the same.

The floor plan of the property was set out in the brochure and the `built-in` area of each floor was stated in square metres. The total `built-in` area of the property was stated to be 873 sq m. However, in the price list, it was stated that the `built-up` area of the property was 873 sq m; there was no mention of any `built-in` area.

Lim subsequently exercised the option by executing a sales and purchase agreement (the `S & P agreement`) on 6 December 1994. The appellant contended that since the brochure was incorporated into the option, the contract would include the term that the `built-in` area of the property would be 873 sq m. This point was not in dispute.

The project was completed sometime in early January 1997. On 25 January 1997, Lim took possession of the property. He said he was immediately struck by the smallness of the interior of the house as one of the considerations that made him buy the house was that the `built-in` area was to be 873 sq m. However, he did nothing about that but complained about other things. Sometime later, his conveyancing solicitors engaged an architect (not known who he was) to measure the `built-in` area of the property based on the architect`s plans given to Lim on handing over. Subsequently, he was informed by his solicitors that there was a shortfall of 11% in the built-in area of the property.

On 17 April 1997, Lim`s solicitors wrote to CDL`s solicitors, informing them of the shortfall of 11% in the `built-in` area, and also stating that while he would complete the transaction, it was without prejudice to his rights to claim for damages for the same. On 29 May 1997, Lim wrote to CDL and asked for an explanation for the shortfall. On 1 July 1997, CDL`s solicitors replied, enclosing their surveyor`s letter which stated that the `built-up` area of the property was 866.9 sq m.

On 10 October 1997, Lim wrote to CDL`s solicitors asking for the joint appointment of a neutral surveyor to determine the exact `built-in` area with a view to entering into a discussion for a solution. On 29 October 1997, the CDL`s solicitors replied stating, inter alia:

Any representation as to the total built-in area made in our clients` brochure is subject to the disclaimer clause in the said brochure ... We are instructed that in practice the terms `built-up` and `built-in` are used interchangeably to denote the area of a building built for exclusive usage and enjoyment of the owner.

CDL stated that it could not agree to the proposal for a joint appointment of a surveyor at that stage but asked Lim to furnish the results of the final survey which was then being carried out by his surveyor.

Two surveys were commissioned and carried out on behalf of Lim. The first was done sometime in September 1997 by Mr Anthony Lim who reported that the built-in area of the property was only 570.3 sq m, and that included only the floor areas covered by a roof and enclosed by four walls. We ought to add that in fact Lim directed Anthony Lim to measure `built-in` in that manner. The second was by Mr Wang Yu Yang (Wang) of M/s Wang Surveyors. In his report, Wang stated that the `built-in` area of the property was 571.56 sq m. He excluded ancillary areas such as terraces, balconies and patios from the computation of the `built-in` area. At that time, none of those reports were furnished by Lim to CDL.

On 20 November 1997, Lim instituted this action to claim for damages on account of the shortfall in the `built-in` area.

The decision below

In the court below, the trial centred on the issue of the meaning of the term `built-in`. [See [1999] 4 SLR 451.] Lim contended that the phrase `built-in area` referred only to that area built or constructed within four walls, with a roof. It would not include areas such as terraces, patios, verandas and car porch which were not enclosed by four walls and covered with a roof.

On the other hand, CDL took the position, inter alia, that:

(a) the phrase `built-in area` meant the same as `built-up area` and both these phrases meant the area of a building built for exclusive usage and enjoyment of the owner; it did not mean only an area enclosed by four walls and covered with a roof;

(b) the terms `built-in` and `built-up` area were used interchangeably to mean the same thing by registered surveyors, architects, developers of land and generally those involved in the real estate industry;

(c) alternatively, the phrase `built-in area` meant an area forming an integral part of the building and/or forming part and parcel of the building; and

(d) alternatively, there was no one clear and accepted definition of the phrase `built-in area`.

Expert witnesses were called by both sides. Evidence was also adduced by CDL to show that the term `built-in` first appeared in a mock-up brochure prepared by CDL`s advertising agents, M/s Hagley & Hoyle. The mock-up was sent to its architect, Mr Goh Peng Thong of M/s Alfred Wong & Partnership, for verification. Mr Goh vetted the contents of the mock-up and approved of the use of the phrase `built-in`. The marketing people of CDL also approved the mock-up.

In dismissing Lim`s claim, the trial judge found, inter alia, that:

(a) There was no consensus in the property industry as to the meaning of the term `built-in` and the meaning ascribed to that term by Lim was not substantiated by applicable industry practice. The trial judge could see no justification for excluding a patio or a terrace, walled on three sides from the term `built-in`. He found that the industry had been using the two terms `built-in` and `built-up` loosely.

(b) The trial judge could not accept Lim`s assertion that he thought he was going to get a house with an area of 873 sq m of floor area within four walls and covered by a roof. He saw the price list where the reference to 873 sq m was in relation to the `built-up` area. He said he knew there was a difference between `built-in` and `built-up`. Yet he made no enquiries to clarify matters, which he obviously should, when the sales brochure referred to the `built-in` area and the price list the `built-up` area.

Appeal

Before us, Lim pursued his claim based purely on the ground that CDL had failed contractually to deliver the property with a `built-in` area of 873 sq m. An ancillary issue was whether, if CDL was in breach, it was entitled to rely on a disclaimer in the sales brochure, which reads:

While every reasonable care has been taken in preparing this brochure, the developer and its agents cannot be held responsible for any inaccuracies. All statements are believed to be correct but are not to be regarded as statements or representations of fact. All

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