Lim Lay Bee and Another v Allgreen Properties Ltd

Judgment Date04 November 1998
Date04 November 1998
Docket NumberCivil Appeals Nos 88 and 89 of 1998
CourtCourt of Appeal (Singapore)
Lim Lay Bee and another
Plaintiff
and
Allgreen Properties Ltd
Defendant

[1998] SGCA 80

Yong Pung How CJ

,

M Karthigesu JA

and

L P Thean JA

Civil Appeals Nos 88 and 89 of 1998

Court of Appeal

Contract—Contractual terms—Construction of statutory Form E prescribed by Housing Developers Rules (Cap 130, R 1, 1990 Ed) for sale of strata-title properties—Breach by purchaser—Failure to pay balance of first instalment—Termination of contract—Rights of parties—Whether developers’ rights acquired before termination of contract surviving its termination—Contract—Discharge—Recission—Whether developers’ rights accrued before recission extinguished—Equity—Relief—Against forfeiture—Financial hardship—Whether basis for relief against forfeiture—Whether administrators entitled to plead provisions of agreement in standard statutory form extravagant and unconscionable

The respondent, Allgreen Properties Ltd, was a housing developer who granted Loh an option to purchase a unit in its condominium. Loh paid 5% of the purchase price as the booking fee. The parties signed the sale and purchase agreement which was in the prescribed Form E of the Housing Developers Rules (Cap 130, R 1, 1990 Ed) for the sale of strata-title properties. Loh failed to pay the balance 15% of the purchase price. The developer gave notice for the second instalment of a further 10% of the purchase price. Loh then tendered a cheque for payment of the 15% and 10% of the purchase price. The cheque was dishonoured. The developer served on Loh the 21 days’ notice pursuant to cl 5 (3). Loh failed to pay and the agreement was annulled. The developer sued to recover all outstanding sums. Loh passed away. The appellants, his administrators, were substituted as defendants. The developer applied for summary judgment. The assistant registrar decided that it was only entitled to forfeit whatever amount Loh had paid and allowed its claims for interests. She gave leave to amend its statement of claim to include damages. The developer appealed. The High Court held that the first instalment was a deposit and ordered the administrators to pay the balance of the 15% plus interests for late payment. The administrators appealed.

Held, dismissing the appeals:

(1) The developer’s right to the balance of 15% accrued before the agreement was terminated. This balance of the first-instalment payment was a part payment of the purchase price and not a deposit. Reading cll 3 (1) (a) and 5 (3) (c) of the agreement together, the right survived its termination. The developer was entitled to recover the amount and forfeit it. Loh’s financial hardship could not be the basis for relief against forfeiture: at [22], [27], and [33].

(2) A contract in a statutory form would not have all the incidents of an ordinary contract. It was not open to the administrators to argue that certain provisions of the agreement were “extravagant and unconscionable? and to invoke the equitable jurisdiction of the court to grant relief against the forfeiture as provided: at [34].

[Observation: On a true construction of cl 3 (1) (a) of the agreement, the first instalment was a part payment of the purchase price and not a deposit. Clause 3 was explicit and clear in providing that the purchase price was to be paid by multiple instalments in the manner set out thereunder. As such the first instalment was therefore no different from the ensuing instalments: at [27].]

Damon Cia Naviera SA v Hapag-Lloyd International SA [1985] 1 WLR 435; [1985] 1 All ER 475 (refd)

Dewar v Mintoft [1912] 2 KB 373 (refd)

Gold Pine Development Pte Ltd v Lee Poi Sam [1993] 1 SLR (R) 456; [1993] 2 SLR 366 (not folld)

Golden Bay Realty Pte Ltd v Orchard Twelve Investments Pte Ltd [1991] 2 SLR (R) 222; [1991] SLR 18 (folld)

Hyundai Heavy Industries Co Ltd (formerly Hyundai Shipbuilding and Heavy Industries Co Ltd) v Papadopoulos [1980] 1 WLR 1129 (folld)

Indian Overseas Bank v Cheng Lai Geok [1993] 1 SLR (R) 32; [1993] 1 SLR 470 (folld)

Johnson v Agnew [1980] AC 367 (folld)

MacDonald v Dennys Lascelles (1933) 48 CLR 457 (distd)

Mayson v Clouet [1924] AC 980 (distd)

Millichamp v Jones [1982] 1 WLR 1422 (refd)

Pacific Rim Investments Pte Ltd v Lam Seng Tiong [1995] 2 SLR (R) 643; [1995] 3 SLR 1 (refd)

Housing Developers (Control and Licensing) Act (Cap 250, 1970 Rev Ed)

Housing Developers Rules (Cap 130, R 1, 1990 Ed)r 12 (3)

Housing Developers Rules1976 (S 182/1976)

Rules of Court (Cap 322,R 5, 1997 Rev Ed)O 14r 12

Low Chai Chong and Lauw Yann Ching (Rodyk & Davidson) for the appellants

B Vijayan Peter and Julia Eng (Ramdas & Wong) for the respondent.

Judgment reserved.

L P Thean JA

(delivering the judgment of the court):

The agreement

1 The appellants are the administrators of the estate of one the late Loh Siok Hong (“Loh?). The respondents are the housing developers of a condominium known as “Springdale? at Hindhede Walk. On 27 March 1996, Loh was granted an option by the respondents to purchase a unit in the condominium, namely, #03-11 in Block 51 (“the property?) at the price of $959,000, and pursuant to the terms thereof paid a booking fee of $47,950, which represented 5% of the purchase price. On the same day, he exercised the option; but the formal sale and purchase agreement was executed by the parties a month later, on 27 April 1996 (“the agreement?).

2 The agreement is in a statutory form, which is Form E then prescribed by the Housing Developers Rules 1990 for the sale of strata-title properties. Under the agreement, the purchase price was payable by instalments, with the first instalment consisting of 20% thereof amounting to $191,800 (which included the booking fee of $47,950) being payable upon the signing of the agreement or within eight weeks from the date of the option, whichever was the later. Clause 3 (1) (a) of the agreement, so far as material, provides as follows:

  1. 3 (1) … the purchase price shall be paid by the Purchaser to the Vendor by instalments in the following manner:

    1. (a) immediately upon the signing of this agreement or within eight (8) weeks from the date of the Option to Purchase, whichever is the later, a sum equal to twenty (20) per cent of the purchase price; such sum to include the booking fee (if any) paid;

The second instalment under cl 3 (1) (b) was payable:

  1. (b) within fourteen (14) days after receipt by the Purchaser of the Vendor’s notice in writing that the foundation work has been completed, a sum equal to ten (10) per cent of the purchase price;

3 Clause 3 (1) (a) of the agreement is in fact a slight variation of the equivalent subclause provided for in Form E. Paragraph (a) of the subclause in Form E reads:

  1. 3 (1) Subject to paragraph (4), the purchase price shall be paid by the Purchaser to the Vendor by instalments in the following manner:

    1. (b) immediately upon the signing of this agreement a sum equal to 20% of the purchase price; such sum to include the booking fee (if any) paid;

The words “or within eight (8) weeks from the date of the Option to Purchase, whichever is the later? were added by the respondents. We assume that approval for this variation had been obtained from the Controller of Housing pursuant to r 12 (3) of the Rules, as there was no challenge or dispute on the validity of cl 3 (1) (a) of the agreement.

4 As Loh had paid the booking fee of 5% at the time of the grant of the option, the balance of the 15% amounting to $143,850 was payable, at the latest, on 22 May 1996. However, he failed to pay the amount on that day. Soon thereafter, the notice for payment of the second instalment of 10% of the purchase price,ie $95,900, was given and that payment became due on 3 July 1996. On 28 June 1996, Loh tendered a cheque for $239,750 in payment of the balance of the first instalment and also the second instalment. However, the cheque was dishonoured and was returned marked “Refer to Drawer? on 3 July 1996. Thereafter, Loh did not make, or attempt to make, any payment, and no further payment was made.

Termination of the agreement

5 In the event, the respondents proceeded to exercise their rights under cl 5 of the agreement. It is convenient at this stage to set out that clause in full, which reads as follows:

  1. 5 (1) If any of the instalments referred to in clause 3 remains unpaid by the Purchaser at the expiration of the relevant period for payment referred to in that clause, interest on any such unpaid instalment or instalments shall commence to run from the day following the expiration of such period and shall be payable by the Purchaser until —

    1. (a) such time as the unpaid instalment is paid; or

    2. (b) the expiration of the notice to repudiate this agreement is given by the Vendor pursuant to paragraph (3),

whichever is the earlier.

  1. (2) The interest payable under paragraph (1) of this clause shall be calculated from day to day at the rate of two (2) per cent above the average of the prevailing prime rates of the four major local banks (ie DBS, OCBC, OUB and UOB) rounded downwards to the nearest one-eighth of one (1) per cent.

  2. (3) If any such unpaid instalments and interest remain unpaid for any period in excess of fourteen (14) days after its due date, the Vendor shall be entitled at its option on giving to the Purchaser or his solicitors not less than twenty-one (21) days’ notice in writing to treat this agreement as having been repudiated by the Purchaser and (unless in the meanwhile the unpaid instalments and interest shall have been paid) this agreement shall at the expiration of such notice (and in this respect time shall be of the essence) be annulled and in such an event, without prejudice to any other rights available to him at law or in equity, the Vendor shall be entitled:

    1. (a) to resell or otherwise dispose of the building unit as the Vendor shall see fit as if this agreement had not been entered into;

    2. (b) to...

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11 cases
  • Lee Chee Wei v Tan Hor Peow Victor
    • Singapore
    • Court of Appeal (Singapore)
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    • 9 November 2017
    ...the category of forfeitable deposits and is neither designed nor intended to secure performance (Lim Lay Bee v Allgreen Properties Ltd [1998] 3 SLR(R) 1028 (“Lim Lay Bee”)). This is underscored by the premise that the vendor is already amply protected by the recovery of damages he has susta......
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    ...the category of forfeitable deposits and is neither designed nor intended to secure performance (Lim Lay Bee v Allgreen Properties Ltd [1999] 1 SLR 471 (“Lim Lay Bee”)). This is underscored by the premise that the vendor is already amply protected by the recovery of damages he has sustained......
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1 books & journal articles
  • Restitution
    • Singapore
    • Singapore Academy of Law Annual Review No. 2007, December 2007
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