Lim Hoe Heng v Poh Choon Kia and another

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 18 October 2012
• Neutral Citation: [2012] SGCA 58
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 18 of 2012
• Published date: 07 November 2012
• Year: 2012
• Hearing Date: 03 September 2012
• Plaintiff Counsel: Jimmy Yap (Jimmy Yap & Co)
• Defendant Counsel: A Thamilselvan (Subra TT Law LLC )
• Subject Matter: Contract,Sale of Land,Breach,Land,Conveyance
• Citation: [2012] SGCA 58

Sundaresh Menon JA:

This appeal arises out of an agreement for the sale and purchase of a Housing and Development Board (“HDB”) flat by the appellant, Lim Hoe Heng (“the appellant”) to the respondents, Poh Choon Kia and Goh Siu Mui (“the respondents”).

Parties

The appellant was the registered sole owner of a HDB flat at Block 121 Potong Pasir Avenue 1 #11-273, Singapore 350121 (“the Flat”). The appellant’s wife, one Kang Weina (“Kang”), was the second defendant in the proceedings below, but she is not party to this appeal.

The respondents were, at the material time, in search of a matrimonial home in anticipation of their wedding on 13 November 2011.

Background

The appellant had been an undischarged bankrupt since 12 June 2008, when his construction business failed. As his mortgage payments on the Flat had fallen into arrears, he was given the option of either selling the Flat on the open market, or surrendering the Flat to the HDB.¹ The appellant opted for the former course and as it transpired, he granted the respondents an Option To Purchase the Flat for $654,000 on 15 January 2011 (“the Option”).² The respondents exercised the Option on 21 January 2011.

The parties were invited by the HDB to, and did attend at, the HDB’s branch office on 25 February 2011 (“the First Appointment”).³ On the same day, the HDB sent a letter to the parties (“the February Letter”),⁴ setting out in tabular form the two stages of the sale process and the “estimated dates” on which each stage would be completed. The letter stated that: The first stage was the “Resale Approval Stage”, and the parties would receive a letter from the HDB advising if it approved the resale. It was estimated that the resale would be approved around 11 March 2011. The second stage was the “Completion of Resale Stage”, and “[o]ne week before the scheduled date for the completion, both sellers and buyers [would] receive a 2nd letter from [the HDB] Resale Office to inform them of the appointment date to complete the transaction”. It was estimated that the resale would be completed around 8 April 2011.

Unfortunately, matters did not proceed as hoped or expected. Shortly after their receipt of the February Letter, the respondents were informed of two impediments to completion of the sale. The first was Kang’s refusal to sign a form known as the Spouse Consent to Resale Form, the appellant’s production of which was one of HDB’s requirements for resale (“the Spouse Consent Requirement”).⁵ Kang’s refusal was conveyed by the HDB to the respondents by a phone call on 29 February 2011,⁶ a letter dated 23 March 2011, and an email on 19 April 2011. The letter stated:⁷

We wish to inform that we are unable to proceed with the processing of your purchase as the seller, Mr Lim is unable to obtain his spouse consent for the sale and we are unable to waive this requirement. Please let us have your written confirmation on whether you are willing to defer the resale transaction till the matter is resolved. Please let us have your letter latest by 4 April 11. Otherwise, we will proceed to cancel the resale.

[emphasis in original]

The respondents did not reply to this letter. On 19 April 2011, the HDB sent a further email to the respondents’ conveyancing executive enquiring to the same effect, as follows:⁸

So are the buyers willing to wait and defer the resale? If we do not receive any confirmation that they are willing to defer the resale, we will have to cancel the case at our end.

On the same day, the respondents’ conveyancing executive replied in an email that “[f]rom what I understand from the buyers yesterday they are very willing to wait until this issue is resolve [sic]”.⁹

As it transpired, this impediment to the sale was only removed on 31 May 2011, when the respondents successfully petitioned their Member of Parliament through whose good offices the HDB’s waiver of the Spouse Consent Requirement was secured in this instance.¹⁰

The second impediment was made known to the respondents through their solicitors in early April. Kang had lodged a caveat¹¹ on the Flat on 8 March 2011 (“the Caveat”). Kang claimed that she had an equitable and proprietary claim to the Flat which would crystallise upon the division of the matrimonial assets pursuant to divorce proceedings. However, no divorce proceedings had been instituted even at the time of the hearing below.

The appellant asserts that he made strenuous efforts to overcome both impediments but to no avail. According to him, Kang was only interested in obtaining for herself as much of the net proceeds of sale as she could, even though she knew that the appellant required the funds for his planned purchase of a replacement HDB flat in Hougang for his family (“the Hougang flat”). According to the appellant, he even offered to allow her to lodge a caveat against the Hougang flat if she withdrew the Caveat but she was unwilling to do so.¹² He also attempted to get the Caveat cancelled under s 127(2) of the Land Titles Act (Cap 157, Rev Ed 2004) but failed as the Registrar of Land Titles considered the matter contentious and hence that it should properly be resolved by the court. The appellant was then unable to secure a third party’s agreement to foot the legal costs involved prior to seeking the Official Assignee’s consent to commence legal proceedings to remove the Caveat.¹³

In these circumstances, the respondents commenced proceedings against the appellant and Kang on 6 September 2011, seeking the following remedies:¹⁴ Specific performance of the contract of sale of the Flat; Payment of late completion interest pursuant to Condition 8.2 of the Law Society of Singapore’s Conditions of Sale 1999 (“the LSCS”); Damages to be assessed by the court by reason of the appellant’s breach of contract; Kang’s withdrawal of the Caveat; and Costs of the application, including, if applicable, the costs of lodging the withdrawal of the Caveat.

The relevant clauses in the Option

The clauses in the Option which are relevant to the present dispute are the following: General 8.1 In this Option —

...

“Completion Date” means the date on which completion of the sale and purchase of the Flat is to take place in accordance with Clause 12;

... Agreement for sale and purchase

9.3 The Flat is sold subject to — (a) the Housing and Development Act (Cap. 129) and any rules and regulations made under the Act; (b) the terms and conditions of resale and purchase of an HDB resale flat as prescribed by the HDB from time to time; (c) the policies of the HDB in force from time to time; (d) the terms and conditions of this Option; (e) the conditions in the Law Society Conditions which — (i) apply to a sale by private contract; and (ii) are not varied by or inconsistent with the terms and conditions in this Option;

... Completion Date

12 Unless extended by the HDB, the Completion Date will be within 8 weeks from the date of the HDB’s first appointment with the Seller and Buyer for the sale and purchase of the Flat. Seller’s obligations 13.1 The Seller must, within 7 working days at the request of the HDB or the Buyer’s solicitor — (a) produce such documents; (b) sign such documents; (c) make such declarations; or (d) provide such information,

to the HDB or the Buyer’s solicitor, as may be required to obtain the HDB’s approval for the sale of the Flat.

...

13.3 The Seller must carry out such acts and sign such documents as the HDB or the Buyer’s solicitor may direct to discharge any existing mortgage, charge, third party caveat or other encumbrance with respect to the Flat on or before completion.

...

13.5 The Seller agrees to take such steps as the Buyer may reasonably request to help the Buyer obtain the HDB’s approval for the purchase of the Flat.

…

Non-approval of sale and purchase 15.1 If the HDB’s approval for the sale and purchase of the Flat is not obtained, is refused or is revoked before the Completion Date, and it is not due to the Seller’s or Buyer’s default in complying with the HDB’s terms of resale or requirements — (a) the sale and purchase will be cancelled; (b) this Option will be rescinded and become null and void and of no further effect; (c) the Seller will immediately, without demand, refund to the Buyer the Option Fee, Option Exercise Fee and any other monies paid by the Buyer to the Seller, without any interest or deduction; (d) each party will bear his own costs in the matter; and

(e)neither party will have any other claim against the other.

15.2 If the HDB’s approval for the sale and purchase of the Flat is withheld, refused, revoked or not obtained before the Completion Date and it is due to the Seller’s or Buyer’s default in complying with the HDB’s terms of resale or requirements, the other party will be entitled to enforce the terms of this Option for specific performance, damages and/or any other remedy.

The relevant conditions from the LSCS, referred to in Clause 9.3(e) of the Option, are as follows: 8.2 Interest Payable by Vendor 8.2.1 If — (a) the sale is not completed on or before the date fixed for completion; and (b) the delay in completion is due solely to the default of the Vendor,

he must pay interest (as liquidated damages) commencing on the day following the date fixed for completion up to and including the day of actual completion. Interest will be calculated on the purchase price at 10% per annum.

...

8.3 No Interest Payable

No interest (as liquidated damages) will be payable if the delay in completion is due to some cause other than the default of the Vendor or the Purchaser or to the default of both the Vendor and the Purchaser.

Notice to Complete 29.1 This Condition applies in...