Ng Swee Lang and Another v Sassoon Samuel Bernard and Others

CourtCourt of Three Judges (Singapore)
JudgeChan Sek Keong CJ
Judgment Date29 February 2008
Neutral Citation[2008] SGCA 7
Citation[2008] SGCA 7
Defendant CounselChristopher Yong Shu Wei and Joshua Chai Kok Keong (Legal21 LLC)
Subject MatterPurposive interpretation of s 84A(1) read with s 84A(3) Land Titles (Strata) Act (Cap 158, 1999 Rev Ed),Construction of statute,Section 6(d) Civil Law Act (Cap 43, 1999 Rev Ed),Definitions,Sale of land,Non-compliance with requirement,Whether application to Strata Titles Board for approval incompetent and whether Board having jurisdiction to hear application for collective sale,Statutory Interpretation,Strata Titles Board,Whether agreements operating independently or sequentially,Statutory requirement that method of distribution of sale proceeds be stated in sale and purchase agreement,Purposive approach,Land,Contract,Price of individual unit not specified in sale and purchase agreement,Strata titles,Omission to specify in sale and purchase agreement proposed method of distribution of sale proceeds under s 84B(1)(b),Whether sale and purchase agreement valid,Contractual terms,Collective sales,Land Titles (Strata) Act (Cap 158, 1999 Rev Ed),Administrative Law,Collective sale agreement expressed to terminate within period of validity of sale and purchase agreement
Published date03 March 2008
Plaintiff CounselMichael Hwang SC and Fong Lee Cheng Jennifer (Michael Hwang), Yip Shee Yin and Leong Why Kong (Ascentia Law Corporation)

29 February 2008

Judgment reserved.

Chan Sek Keong CJ (delivering the judgment of the court):

1 This appeal concerns the collective sale of the freehold condominium development (comprised in Land Lot No 559X TS 21 under Strata Title Plan No 287) at 70 St Thomas Walk known as Phoenix Court which comprises three penthouses on the highest floor and 44 apartment units on the lower floors.

2 The application for the collective sale of Phoenix Court (“the Application”) was made pursuant to a sale and purchase agreement dated 27 October 2006 (“the S&P Agreement”) entered into between the owners of 46 out of the 47 residential units in Phoenix Court (“the Majority Owners”) and Bukit Panjang Plaza Pte Ltd (“the Purchaser”). The Application was approved by the Strata Titles Board (“the Board”) despite the objections of the appellants, who are the joint subsidiary proprietors of unit No 07-70. The appellants’ appeal against the Board’s decision to the High Court in Originating Summons No 1089 of 2007 was dismissed by Andrew Ang J (“the Judge”) in Ng Swee Lang v Sassoon Samuel Bernard [2008] 1 SLR 522 (“the GD”).

3 The Application was made by the respondents in this appeal on behalf of the Majority Owners, who hold 97.92% of the total share value of Phoenix Court (“the Share Value”). The appellants, who are also the sole dissenting owners, hold 2.08% of the Share Value. The total area of the lots held by the Majority Owners well exceeded 80% of the total area of the lots in Phoenix Court.

4 In this appeal, the appellants contend that the decision of the Judge is wrong on a number of grounds, which may be summarised as follows:

(a) the respondents had no locus standi to make the Application to the Board as the S&P Agreement did not specify the proposed method of distributing the proceeds of sale (“the distribution method”), in violation of s 84A(1) of the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) (“the Act”);

(b) the S&P Agreement was not valid and/or enforceable as, the distribution method not being stated therein, the price in respect of each lot in Phoenix Court could not be ascertained;

(c) the respondents had no locus standi to make the Application as they were not the authorised representatives of the Majority Owners for the purposes of s 84A(2) of the Act; and

(d) there was no valid collective sale application for the Board to approve as the S&P Agreement was extended only after the termination of the collective sale agreement entered into among the Majority Owners (“the CSA”) (see [10] below) and therefore, or alternatively, the S&P Agreement had terminated pursuant to cl 3 thereof.

The policy on collective sales

5 Before we deal with these grounds of appeal, we should understand the policy considerations applicable to the collective sale of condominiums and flats in Singapore. The collective sale, under which all the units and the common property in a condominium development or a block of flats (“subject property”) may be sold if a sufficient number of subsidiary proprietors agree to it (for ease of exposition, we will refer to the requisite body of consenting subsidiary proprietors as “majority owners” in this judgment), notwithstanding the objections of dissenting subsidiary proprietors (“minority owners”), is a peculiar feature of the property market in Singapore. It is a statutory construct to give effect to the Government’s policy to facilitate urban renewal by enabling old apartment blocks to be redeveloped by the private sector. Initially, a collective sale could take place only if the subsidiary proprietors of all the lots in the subject property consented to the sale. However, due to rapid changes in the economic and environmental landscape of Singapore, the Government decided to modify its policy on collective sales by relaxing the strict statutory conditions applicable to such sales. At the second reading of the Land Titles (Strata) (Amendment) Bill (Bill 28 of 1998) (“the Bill”) to enact these changes (“the Second Reading”), the Minister of State for Law said (see Singapore Parliamentary Debates, Official Report (31 July 1998) vol 69 (“Singapore Parliamentary Debates”) at col 601):

I had informed this House on 19th November last year [ie, 1997] that [the] Government would be amending the law to make it easier for en-bloc sales to take place. The current position is that a single owner, for whatever reason, can oppose and thwart a sale. [The] Government has received many appeals and feedback from frustrated owners whose desires to sell their flats or condominiums en-bloc have been so thwarted. As a result, these buildings cannot take advantage of enhanced plot ratios to realise their full development potential, which would have created many more housing units in prime 999-year leasehold or freehold areas for Singaporeans. A secondary benefit is that these developments, especially in the older ones, could have been rejuvenated through the en-bloc process.

I said that the law would be amended to remove the need for unanimous consent. … [I]n land-scarce Singapore, such an approach was even more imperative as it would make available more prime land for higher-intensity development to build more quality housing in Singapore. … I highlighted the fact that safeguards would be put in place to protect the interests of the minority owners.

6 The new scheme outlined above was enacted by the Land Titles (Strata) (Amendment) Act 1999 (Act 21 of 1999) (“the 1999 Amendment Act”). It modified two main qualifying conditions for a collective sale. The first concerns the age of the subject property; the second concerns the proportion of the subject property’s share value and the total area of the lots held by majority owners. These two conditions are reflected in s 84A(1) of the Act as follows:

(a) if the subject property is less than ten years old, the majority owners must hold not less than 90% of the share values and not less than 90% of the total area of all the lots in the subject property;

(b) if the subject property is ten years old or more, the majority owners need only hold not less than 80% of the share values and not less than 80% of the total area of the lots in the subject property.

7 The 1999 Amendment Act also introduced a large number of procedural steps and substantive safeguards to protect the interests of minority owners, such as ensuring that they are kept fully informed by the subject property’s collective sale committee of the progress of the sale and any developments in relation thereto. We will consider the adequacy of these safeguards later in this judgment. The basic idea of the collective sale scheme is to enable majority owners to sell the subject property to a purchaser without the consent of the minority owners, subject to the approval of the Board. Once the Board has approved the collective sale application, the Board’s order binds all the minority owners and they, together with the majority owners, are under an obligation to transfer their respective lots and the common property to the purchaser in accordance with the terms of the sale and purchase agreement (see s 84B(1)(b) of the Act). The sale takes effect by virtue of the Board’s order, and not by virtue of the sale and purchase agreement. In short, the collective sale is not a contractual sale, but a new form of statutory sale.

8 The Act does not prescribe the form of the sale and purchase agreement to be entered into between the majority owners and the purchaser, but s 84A(1) implicitly requires it to specify the distribution method. The collective sale scheme assumes that only the majority owners are parties to the sale and that the minority owners need not be parties. The reason for this procedure is a practical one – namely, it would be virtually impossible to get a minority owner to sign the sale and purchase agreement since he is objecting to the sale. In the present appeal, there is a dispute between the appellants and the respondents as to the legal nature of the sale and purchase agreement under the collective sale scheme. The appellants argue that the sale and purchase agreement is the aggregation of all the individual sale and purchase contracts entered into between the various subsidiary proprietors and the purchaser, whereas the respondents assert that it is a single collective agreement with the purchaser. If the appellants’ argument is correct, it would have an effect on the validity of the S&P Agreement. But, in our view, the argument is not correct. The legislative amendments made to the collective sale scheme in 1999 are intended to facilitate – and not to place unnecessary obstacles in the way of – collective sales, as can be seen from the ministerial speech quoted earlier (at [5] above).

9 Although the collective sale scheme is relatively straightforward, unfortunately, the legislation giving effect to it – viz, Pt VA of the Act – is not free from difficulty. The provisions of Pt VA have given rise to much litigation between minority owners and majority owners, and even among majority owners themselves. In this appeal, the meaning and effect of s 84A of the Act is contested by both parties. The wording of this section has enabled the appellants to advance a plausible argument that s 84A(1) is a jurisdictional provision, and that because the S&P Agreement did not specify the distribution method, the respondents did not have locus standi to make the application.

The relevant facts

10 The relevant facts of this appeal, which are largely undisputed, are as follows:

(a) On 26 February 2006, an extraordinary general meeting of the management corporation of Phoenix Court was held, at which ten subsidiary proprietors were elected as members of the sale committee (“the SC”) to effectuate the collective sale of Phoenix Court. At this meeting, only the third respondent was elected as a member of the SC.

(b) On 16 April 2006, the Majority Owners (who, as stated at [2] above, own 46 out of the 47 units in Phoenix...

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