Mohamed Amin bin Mohamed Taib and Others v Lim Choon Thye and Others

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 03 March 2009
• Neutral Citation: [2009] SGHC 48
• Docket Number: Originating Summons No 17 of 2008
• Date: 03 March 2009
• Year: 2009
• Published date: 12 March 2009
• Plaintiff Counsel: Hri Kumar SC, Gary Low and Benedict Teo (Drew & Napier LLC)
• Citation: [2009] SGHC 48
• Defendant Counsel: Ranvir Singh (UniLegal LLC),Vijay Kumar (Arbiters' Inc Law Corporation),Cheong Yuen Hee, Cheong Aik Chye (A C Cheong & Co)
• Court: High Court (Singapore)
• Subject Matter: Whether "proceeds of sale" meant only purchase price,Purpose of ss 84A(7) and 84A(8) Land Titles (Strata) Act,Purchaser offering to compensate minority subsidiary proprietors for loss,Strata Titles Board,Minority subsidiary proprietors suffering loss from en bloc sale,Land,Land Titles (Strata) Act (Cap 158, 1999 Rev Ed),Strata titles,Whether Strata Titles Board could consider compensation in calculating "proceeds of sale" under s 84A(7) Land Titles (Strata) Act (Cap 158, 1999 Rev Ed)

3 March 2009

Judith Prakash J:

Background

1 The plaintiffs brought this application as the authorised representatives of the consenting subsidiary proprietors who held at least 80% of the share values in the condominium development known as Regent Court (Strata Title Plan No. 866) comprised in Land Lot Mukim 17-5574T, Singapore (“Regent Court”).

2 Regent Court is a residential development consisting of 49 apartments. As at June 2005, it was more than 20 years old. On 30 June 2005, at an extraordinary general meeting of the subsidiary proprietors of Regent Court, a resolution was passed approving the collective sale of the development at a reserve price of $31m. A Sale Committee was also elected at the meeting. At a subsequent general meeting held on 16 February 2006, the reserve price was increased to $34m. By 25 August 2006, a collective sale agreement had been signed by the subsidiary proprietors of 42 out of the 49 units in Regent Court and this represented 82.53% of the total share value in the development.

3 The collective sale first proceeded by way of a public tender. However, no bids were received within the period of the tender. Subsequently, on 24 January 2007, a company called Landquest Pte Ltd (“LPL”) offered to purchase Regent Court at the price of $34m. This offer was accepted by the Sale Committee and a sale and purchase agreement was entered into on 3 April 2007 with a company named Regent Development Pte Ltd (“the Purchaser”) as the nominee of LPL.

4 By a written resolution of the Sale Committee dated 10 July 2007, the plaintiffs were appointed representatives for the purpose of applying to the Strata Titles Board (“the Board”) under s 84A of the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) (“the Act”) for its approval of the collective sale. This application (the “STB Application”) was filed on 20 July 2007.

5 The defendants, who are also subsidiary proprietors of units in Regent Court, have not consented to the collective sale. They filed various objections to the application. For the purposes of these proceedings before me, the only relevant objection was that filed by the ninth and tenth defendants. Although the ninth and tenth defendants put forward four grounds of objection, in these proceedings, I was only concerned with the first objection. This was that the collective sale would cause the ninth and tenth defendants to incur a financial loss as the proceeds of sale of their lot, after any deduction allowed by the Board, would be less than the price paid for the lot. They quantified their loss as being $93,935.75.

6 In the light of the estimated financial loss, the Sale Committee approached the Purchaser for an undertaking to make good the alleged financial loss. On 31 December 2007, the Purchaser furnished an undertaking to pay the ninth and tenth defendants the sum of $93,935.75 being the difference between the proceeds of sale under the collective sale of Regent Court and the price that the ninth and tenth defendants paid for their unit together with the stamp fees and legal costs claimed by them. By a written document (“the Undertaking”), the Purchaser further undertook to pay such additional sums as may be allowed by the Board as deductions under s 84A(8)(a) of the Act. Additionally, on 10 December 2007, the Sale Committee entered into a supplemental agreement with the Purchaser whereunder the Purchaser agreed to pay the ninth and tenth defendants, on completion of the collective sale, the sum of $93,935.75 and such additional deductions as the Board may allow.

7 The hearing of the STB Application commenced on 3 December 2007. On 11 December 2007, the Board heard arguments on the ninth and tenth defendants’ objection on the ground of financial loss. Thereafter, the Board found that this objection had been made out and gave an oral decision dismissing the STB Application. Written grounds for the Board’s decision were delivered on 24 December 2007.

8 On 7 January 2008, the plaintiffs filed this appeal and asked the Court for, inter alia, the following reliefs:

(a) A Declaration that the whole of the order of the Board made on 11 December 2007 dismissing the STB Application be set aside; and

(b) An Order that the STB Application be remitted back to the Board for a continuation of the Board’s proceedings, with all evidence adduced thus far standing as part of the record.

The ground of the appeal was that the Board was wrong in law to have dismissed the STB Application based on its reasons as set out in its Grounds of Decision dated 24 December 2007 (the “Grounds”).

9 I heard the appeal on 30 October 2008. I ordered that the whole of the order of the Board made on 11 December 2007 should be set aside and remitted the STB Application back to the Board for a continuation of the Board’s proceedings. I also ordered that the Board was to decide who should bear the costs of the hearing before it on 11 December 2007 after it had completed its proceedings.

10 I now give the reasons for my decision.

The statutory provisions and the Board’s decision

11 The relevant provisions of the Act that were in issue before me were ss 84A (7) and (8). These read:

(7) Where one or more objections have been filed under subsection (4), the Board shall, subject to subsection (9), after mediation, if any, approve the application made under subsection (1) and order that the lots and common property in the strata title plan be sold unless, having regard to the objections, the Board is satisfied that —

(a) any objector, being a subsidiary proprietor, will incur a financial loss; or

(b) the proceeds of sale for any lot to be received by any objector, being a subsidiary proprietor, mortgagee or chargee, are insufficient to redeem any mortgage or charge in respect of the lot.

(8) For the purposes of subsection (7) (a), a subsidiary proprietor —

(a) shall be taken to have incurred a financial loss if the proceeds of sale for his lot, after such deduction as the Board may allow (including all or any of the deductions specified in the Fourth Schedule), are less than the price he paid for his lot;

(b) shall not be taken to have incurred a financial loss by reason only that his net gain from the sale of his lot will be less than the other subsidiary proprietors; and

(c) shall not be taken to have incurred a financial loss by reason that the proceeds of sale for his lot, after such deduction as the Board may allow (including all or any of the deductions specified in the Fourth Schedule), are less than the price he paid for his lot if he had purchased the lot after a collective sale committee had signed a sale and purchase agreement to sell all the lots and common property to a purchaser.

12 From para 18 of the Grounds, the Board appeared to have proceeded on the basis of a preliminary point in respect of the ninth and tenth defendants’ financial loss objection because two conditions had, it considered, been met:

(a) all parties had agreed that the Board should rule on that preliminary point; and

(b) the plaintiffs and the ninth and tenth defendants had agreed to a set of facts and that the Board would decide that preliminary point based only on those agreed facts which did not include any reference to the additional payment offered by the purchaser.

13 The basis of the Board’s decision to dismiss the STP Application are set out in paras 24 to 28 of the Grounds . These read:

24. By section 84A(8), the Board has to conclude that a subsidiary proprietor has “incurred a financial loss” if the proceeds of sale for his lot, after any deduction allowed by the Board, are less than the price he paid for his lot.

25. By applying the above formula to the agreed facts as set out below:

(a) the gross proceeds of sale under the collective sale being S$932,191.00; and

(b) the purchase price for lot being S$993,000.00;

there would already be a financial loss of S$60,809.00. This mathematical fact is not disputed by the Applicants.

26. The Applicants’ position is that the Board should look at the evidence showing the purchaser’s undertaking to make good any financial loss of the [ninth and tenth defendants] after the Board has made the Order under the Act. It is the Applicants’ position that this arrangement would be a valid answer to the [ninth and tenth defendants’] objection based on the Gong Ing San case and would empower the Board to dismiss the [ninth and tenth defendants’] objection based on financial loss.

27. The Board is not persuaded by the Applicants for the following reasons:

(a) the Board should not look at the said evidence relating to the purchaser’s undertaking as the Board is limited to looking at the set of facts agreed between the Applicants and the [ninth and tenth defendants] since this procedure had been agreed by all the parties;

(b) even if the Board is not so limited, the Board should not look at the said evidence relating to the purchaser’s undertaking as the Board is bound to look at what have been prescribed by section 84A(8), that is, the proceeds of the sale, any deduction allowed and the price paid by the [ninth and tenth defendants] for their lot and the amount that the purchaser has undertaken to pay does not fall into any one of the prescribed categories;

(c) even if the Board is to stretch the meaning of section 84A(8) as interpreted by the Applicants relying on the Gong Ing San case, the Board should not look at the said evidence relating to the purchaser’s undertaking as, unlike the topping agreement in the Gong Ing San case which is enforceable by the respondent when the Board was making its decision in that case, the purchaser’s undertaking in this case is not in the form of an agreement and that is therefore neither enforceable now nor after the Board has made its decision. However, to ensure that this observation is not misconstrued, the Board is not saying one way or the other the outcome of the Board’s decision had the purchaser entered into an agreement with the...