Muharrem Unsal v M K Sivalingam Jaganathan

• Jurisdiction: Singapore
• Judge: Shaun Leong Li Shiong AR
• Judgment Date: 18 August 2010
• Neutral Citation: [2010] SGHC 241
• Court: High Court (Singapore)
• Docket Number: Suit No 162 of 2010 (Summons No 2462 of 2010)
• Year: 2010
• Published date: 11 July 2014
• Hearing Date: 02 August 2010,11 August 2010
• Plaintiff Counsel: Siraj Omar, Dipti Jauhar (Premier Law LLC)
• Defendant Counsel: Kanthosamy Rajendran (Raj Prasanna & Partners)
• Subject Matter: Civil Procedure,Summary Judgment,Treatment of assertions in affidavits,Consistency with undisputed contemporaneous documentary evidence,Land,Option to Purchase,Housing and Development (Agreements for Sale and Purchase) Rules,Contract,Estoppel by Convention
• Citation: [2010] SGHC 241

Shaun Leong Li Shiong AR: Introduction

This was an application for summary judgment pursuant to Order 14 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules”), where the Purchaser sought specific performance of a contract (for the sale and purchase of a Flat) entered into between the Vendors and the Purchaser. The Vendors refused to perform the contract. They attempted to raise triable issues based on allegations that there was total failure of consideration, and that the sale and purchase agreement was void. I awarded summary judgment in favour of the Purchaser. Before I state the grounds of my decision, I will revisit the pertinent facts below.

The Undisputed Facts

The defendants in this action, M K Sivalingam Jaganathan (“D1”) and Thangaveloo Thenmolee (“D2”) (collectively referred to as ‘the Vendors”) are the registered owners of a Housing and Development Board (“HDB”) apartment addressed at Block 657 Jalan Tenaga #02-110 Singapore 410657 (“the Flat”). The Vendors granted the plaintiff, Muharrem Unsal (“the Purchaser”) an option to purchase the Flat for the price of $426,000 (“the Option”). The Option was dated 9 December 2009¹, and the agreed Option fee and Option exercise fee was $1,000 and $4,000 respectively². It was not disputed that the Vendors signed on the Option. The stated Option expiry date was 23 December 2009³. Clause 5.2 of the Option provides that the Option and Acceptance signed by the Purchaser will form a binding contract for the sale and purchase of the Flat (“the Contract”)⁴. Notably, the Vendors and Purchaser had affirmed this clause by signing against it⁵. The Completion Date was stated to be within 8 weeks from the date of the first HDB appointment⁶.

It is undisputed that the Vendors had appointed HSR Property Consultant (“HSR”) as the property agency to facilitate the sale and purchase of the Flat⁷. One Fion Chia (“Chia”) from HSR assisted the Vendors in the sale and purchase. This was confirmed by Chia’s evidence⁸. It is also undisputed that a HDB resale application was submitted by HSR on 11 December 2009⁹ to apply for HDB approval. The resale application was submitted to HDB via Chia’s email address¹⁰. In reply, HDB wrote a letter to the Vendors dated 14 December 2009 to inform them that they have received the HDB resale application on 12 December 2009 sent on behalf of the Vendors by their housing agent (“HDB letter”)¹¹. The HDB letter informed the Vendors that a HDB appointment date (being 5 March 2010) has been booked by the Vendors’ housing agent. The same letter informed that a technical officer will be conducting an inspection of the Flat on 21 December 2009 to check for any unauthorised renovation works in the Flat.

The Option granted was in the prescribed standard form with a sale and purchase agreement (‘SPA’), as found in the Schedule section of the Housing and Development (Agreements for Sale and Purchase) Rules (Cap 129, R 11, 2004 Rev Ed) (hereinafter referred to as ‘HDASPR’). The HDASPR provides that there shall be no additions or variations of the SPA, non-compliance of this rule would render the SPA void: 2. In these Rules, unless the context otherwise requires –

“agreement for sale and purchase” means any contract, agreement or other document relating to the sale and purchase of an HDB flat between the owner of the HDB flat and a buyer thereof…

Form of agreement for sale and purchase

3.-(1) Subject to paragraph (2), every agreement for sale and purchase shall be in the Form in the Schedule. (2) No agreement for sale and purchase shall contain any addition to, deletion from or variation of the Form in the Schedule unless the addition, deletion or variation is made with the authorisation of the Board.

Void agreement

4. Any agreement for sale and purchase which does not comply with rule 3 shall be void

[emphasis added]

The Vendors requested to remain in possession of the Flat for another 3 months after completion to facilitate their personal arrangements¹². The Purchaser agreed to this request and an agreement on extension of stay was entered into between the Vendors and the Purchaser on 21 November 2009 (hereinafter referred to as the “collateral agreement’) which allowed for the Vendors to stay in the Flat for 3 months upon the completion date¹³. The collateral agreement stated that no rent was to be charged for the duration of the extended stay¹⁴.

The Vendors, in their attempt to discharge themselves from the Option and SPA, argued that the collateral agreement is a variation of the SPA, because Clause 19 of the SPA mandates that the Flat be sold with vacant possession on completion. The Vendors argued that, as a variation of the SPA, this contravenes rule 3 of the HDASPR, which rendered the SPA void under rule 4 of the same.

The Vendors further made the assertion that there was a total failure of consideration as they have only received the cheques for the Option fee and Option Exercise fee at as late as 14 January 2010. The Vendors’ solicitors wrote a letter dated 12 February 2010¹⁵ to the Purchaser, stating that Chia handed over 2 cheques to the Vendors only as late as 14 January 2010, and because of this, there was no consideration for the sale and purchase of the Flat. No issue was raised in this letter in relation to the collateral agreement rendering the SPA void. The Purchaser’s solicitor wrote a letter dated 24 February 2010 in reply asking for the Vendors to confirm that they would perform their obligations under the Contract¹⁶. There has been to date no reply to this letter¹⁷.

The Purchaser’s case

According to the Purchaser, the Vendors were “contriving means and ways to get out of the Contract”¹⁸. The Purchaser claimed that the option fee was paid when the Purchaser handed over a cheque of $1,000 to the Vendor’s agent, Chia, on 21 November 2009¹⁹. Chia at that time informed the Purchaser that she would pass the cheque to the Vendors. Chia gave evidence to support the Purchaser’s version²⁰. Chia further stated that the cheque was handed over to D1 soon after she had collected it from the Purchaser²¹.

Subsequently, the Purchaser met Chia on 10 December 2009, where the Option dated 9 October was handed to the Purchaser already signed by the Vendors; this was not disputed by the Vendors²². In addition, I note that the Vendors did not dispute that the signatures on the Option were made by them. The Purchaser paid the Option exercise fee when he handed a cheque of $4,000 to Chia on 10 December 2009. Chia again at that time informed the Purchaser that she would pass the cheque to the Vendors²³. This version was supported by Chia’s evidence²⁴. Chia further claimed that the cheque was handed over to D1 very shortly after having received the cheque from the Purchaser, before the Option expiry date of 23 December 2009²⁵.

Given the above, there was no contractual basis for the Vendors to refuse to perform the Contract as shown in their solicitors’ letter dated 12 February 2010; the Vendors were therefore in repudiatory breach of contract and the Purchaser is seeking specific performance of the Contract.

The Vendors’ case

The Vendors gave two main arguments to justify their refusal to perform the Contract. The first was based on the argument that the collateral agreement had varied the terms of the SPA, thus rendering the latter void by way of rule 3(2) read with rule (4) of the HDASPR (see above at [4]-[6]).

The second argument was that there was a total failure of consideration. D1 explained that the Vendors signed the Option on 21 November 2009²⁶. After D1 had signed the Option, he was informed by Chia that the Purchaser have not handed her the Option fee²⁷. D1 further claims that when he received the HDB letter dated 14 December 2009, Chia informed D1 that she had not received the cheques but will collect them from the Purchaser soon²⁸. According to D1, the cheques for the Option fee and Option exercise fee (at $1,000 and $4,000 respectively) were received by D1 only as late as 14 January 2010²⁹. D1 claims that he informed Chia on two occasions that he no longer wished to sell the Flat since he did not receive the cheques from Purchaser: the first occasion was in December 2009 after the Vendors received the HDB letter, and the second occasion after he had received the allegedly late cheques in 14 January 2010³⁰.

Subsequently, D1 proceeded to HDB to inform that he had received the cheques only on 14 January 2010, and that he wished to cancel the first HDB appointment³¹.

Whether there were triable issues raised in the Defence Relevant principles governing summary judgment – The Court will not accept uncritically all assertions made in affidavits

Before I proceed to review the evidence, it is apposite to visit some general principles governing summary judgment relevant to the decision in the present case. Some general points of guidance have been laid down by the Court of Appeal in the decision of Habibullah Mohamed Yousuff v. Indian Bank [1999] 3 SLR 650 at [21]:

Under O 14 r 3(1) of the Rules of Court, summary judgment should not be given where the defendant "satisfies the Court ... that there is an issue or question in dispute which ought to be tried". The power to give summary judgment under O 14 is intended only to apply to cases where there is no reasonable doubt that a plaintiff is entitled to judgment, and where it is inexpedient to allow a defendant to defend for mere purposes of delay; Jones v Stone [1894] AC 122. Where a defendant shows that he has a fair case for defence or reasonable grounds for setting up a defence, or even a fair probability that he has a bona fide defence, he ought to have leave to defend; Ironclad (Australia) Gold Mining Co v Gardner (1887) 4 TLR 18, Ward v Plumbley (1890) 6 TLR 198.

[emphasis added]

In an application for summary judgment, the plaintiff has to show that he is entitled to judgment...