Mun Hean Realty Pte Ltd v Fu Loong Lithographer Pte Ltd

• Judge: Goh Joon Seng J
• Judgment Date: 31 August 1992
• Neutral Citation: [1992] SGCA 54
• Citation: [1992] SGCA 54
• Defendant Counsel: Cheong Yuen Hee and Andrew Chua (Tan Kim Seng & Partners)
• Published date: 19 September 2003
• Plaintiff Counsel: Tan Tee Jim (Allen & Gledhill)
• Date: 31 August 1992
• Docket Number: Civil Appeal No 22 of 1989
• Court: Court of Appeal (Singapore)
• Subject Matter: Agreement for sale and purchase of commercial property,Whether application contrary to statute,Applicability of doctrine of estoppel,Conditions,Conduct amounting to waiver of strict enforcement of date for notice of completion,Sale of land,s 5 Sale of Commercial Properties Act 1979,rr 6 & 7 Sale of Commercial Properties Rules 1979,Completion date inserted by solicitor arbitrarily,Completion date acceptable to parties,Land

Cur Adv Vult

The defendants were the developers of a flatted factory building (`the building`) known as Mun Hean Building on Lots 243-2 and 244-2 Mukim 17 at No 53 Kim Keat Road, Singapore. The development was one to which the Sale of Commercial Properties Act 1979 (`the Act`) and the Sale of Commercial Properties Rules 1979 (`the Rules`) applied.

By an agreement dated 8 October 1980 (`agreement I`) the defendants agreed to sell to the plaintiffs and the plaintiffs agreed to purchase from the defendants the mezzanine floor subsequently known as #02-01 and #02-02 of the building with a floor area of 7,830sq ft. The material terms of agreement I were:

(i) cl 3 which provided that the area of the property as described in the schedule was only an estimate. In the event of a difference between the estimated and the actual area, there was to be an adjustment of the purchase price on the date of completion of the sale and purchase;

(ii) cl 4(2) which provided that the sale was in respect only of all the property described in the schedule thereto and the plaintiffs should have no claims or objections to another building to be erected on the said Lot 243-2 and 244-2 or any extension of the building;

(iii) cl 16(1) which provided that the defendants were to deliver possession of the property sold within 14 days of the issue of the temporary occupation licence (`TOL`). If TOL was not issued by 28 February 1981, the defendants would pay interest on all moneys by then paid by the plaintiffs at the rate of 9%pa; and

(iv) cl 19 which provided that completion of the sale and purchase was to take place 14 days after the receipt by the plaintiffs or their solicitors of the notice to complete served by the defendants` solicitors. The clause contained no date by which such notice to complete had to be served.

Miss Jeanny Ng (`Miss Ng`), an advocate and solicitor, acted for both parties. She also acted for the plaintiffs in their proposed mortgage of the said property to DBS Finance Ltd (`DBS Finance`) to secure a loan of $1.5m. For that purpose, on 13 January 1981 she forwarded all relevant documents including agreement I to DBS Finance. Thereafter DBS Finance`s solicitors drew Miss Ng`s attention to the fact that agreement I was not in accordance with the prescribed form and did not comply with the requirements of the Act in that, inter alia, it did not contain a date for service by the defendants of the notice to complete. With the agreement of both parties, Miss Ng thereupon prepared a second agreement (`agreement II`) in accordance with the prescribed form and the parties executed agreement II on 25 February 1981 but backdated it to 8 October 1980 as it was meant to replace agreement I of 8 October 1980.

So far as is material agreement II differed from agreement I as follows:

(i) it provided by cl 14(2) for notice to complete to be given by or on behalf of the defendants to the plaintiffs or their solicitors on or before 31 December 1983 failing which the defendants would pay liquidated damages at the rate of 9 percent (9%) per annum on a sum equal to 85 percent (85%) of the purchase price;

(ii) it contained no date by which the defendants had to procure the issue of TOL;

(iii) it contained no provision for adjustment in the price in the event of a difference between the estimated area stated in the First Schedule to agreement II and the actual area on completion; and

(iv) it contained no provision similar to cl 4(2) of agreement I.

Although agreement II did not contain any stipulation on the date of issue of TOL and for possession of the property to be delivered to the plaintiffs, the defendants undertook to deliver to the plaintiffs possession of the property sold by 7 May 1981, failing which they would pay damages for delay. This undertaking was confirmed in writing by Miss Ng in her letter of 25 February 1981 addressed to the plaintiffs. The letter which was confirmed by the plaintiffs read:

Dear Sirs,

Re: Purchase of mezzanine floor, Mun Hean Building, Singapore

Please be informed that we have taken our clients [sic] Mun Hean Realty Pte Ltd instructions and they have agreed on the following:

(a) that the temporary occupation licence date will be scheduled as at 7 May 1981 failing which the vendors will pay you interest at 9% per annum on the 85% or whatever amounts you have already paid to date.

(b) the vendors will not charge you further interest on whatever sums outstanding from you to them after 28 February 1981; and the balance of the purchase price will be disbursed by DBS Finance to the vendors direct.

Please be further informed that should the vendors elect [sic] any other building or structure on the said land you will have no legal interest on them whatsoever, save what you have purchased, ie mezzanine floor, Mun Hean Building.

Yours faithfully

(signed: Jeanny Ng)

At all material times, the plaintiffs were represented by their directors, Lim Eng Hwa, Pang Ah Keuw, Lim Meow Hwa and William Tan Boon Toon (`William Tan`). Miss Ng dealt mainly with William Tan who was the plaintiffs` executive director and the only one who could converse in English. The defendants` managing director, Mok Wing Kee, represented the defendants.

As the prescribed form required a completion date to be inserted in cl 14(2) (whatever that date might be), 31 December 1983 was inserted by Miss Ng as the completion date somewhat arbitrarily. On this William Tan confirmed in evidence as follows:

Q: Why was there no discussion or query concerning 31 December 1983?

A: We were very anxious to obtain possession of the premises, to start our business. There was no discussion about date of legal completion. We were much more concerned about TOL because we wanted physical possession.

Q: Did the defendants inform you of their intention to construct phase II of the project?

A: Yes, we were informed of that.

William Tan is corroborated by Miss Ng:

Q: The completion date which you inserted in agreement II - how did you pick it, according to Mok`s instructions?

A: No. Nor the plaintiffs. I picked the date arbitrarily, and informed both parties. They did not object. The date was not related to any estimate on my part as to when phase II would be completed.

On the evidence there is no doubt that had the problems of the possible delay in the strata subdivision, application for and issue of subsidiary strata certificates of title caused by the phase II project been better appreciated, Miss Ng would no doubt have inserted a completion date well after 31 December 1983. Such later date would have been equally acceptable to William Tan on behalf of the plaintiffs and Mok Wing Kee on behalf of the defendants.

In the events that followed, TOL was not issued until 27 July 1981. In compliance with the letter of 25 February 1981, the defendants paid to the plaintiffs the sum of $12,742.40 for the delay in the issue of TOL calculated from 7 May 1981 according to Miss Ng`s letter of 25 February 1981.

On 12 October 1983, some ten weeks before the defendants were to give notice to complete under cl 14 of agreement II, one Tan Han Yong acquired the whole of the issued share capital of the plaintiffs.

On 4 December 1985 the defendants through Miss Ng gave notice to complete enclosing a completion statement for:

(i) $125,280 being the balance 10% of the purchase price;

(ii) $38,939.20 for the excess by 243.37sq ft in the area in the subsidiary strata certificate of title over the area stated in agreement II at $160 per sq ft for the said excess;

(iii) $5,455.75 being maintenance/service charges for the months of July to November 1985.

The plaintiffs through Tan Han Yong thereupon instructed Tan Kim Seng & Co to act for them in place of Miss Ng.

A claim for liquidated damages amounting to $184,587.86 for delay in the service of the notice to complete was made. The plaintiffs also denied that the defendants were entitled to payment of $38,939.20 for the excess area and the sum of $5,455.75 for the maintenance and service charges. The plaintiffs subsequently paid the said sum of $5,455.75 pursuant to an order of court in Suit No 7702 of 1986. In the meantime as litigation became imminent, Miss Ng withdrew from acting for either party.

On 17 February 1986 the plaintiffs filed proceedings by way of originating summons claiming, inter alia, for the following reliefs:

(a) a declaration that pursuant to cl 14 of agreement II liquidated damages amounting to $184,587.86 were payable by the defendants to the plaintiffs, the defendants having served the notice to complete only on...