Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng and another

• Jurisdiction: Singapore
• Judgment Date: 19 October 2007
• Date: 19 October 2007
• Docket Number: Originating Summons No 180 of 2007
• Court: High Court (Singapore)

Ong Chay Tong & Sons (Pte) Ltd

Plaintiff

and

Ong Hoo Eng and another

Defendant

[2007] SGHC 182

Kan Ting Chiu J

Originating Summons No 180 of 2007

High Court

Land–Caveats–Wrongful lodgment–Caveator having right of first refusal pursuant to directors' resolution–Terms of directors' resolution subsequently varied–Whether caveator still having caveatable interest when it lodged caveat

This action arose from the sale of a property from the plaintiff, a family company, to members of the family. The patriarch of the family was “OCT”.

The directors of the plaintiff passed a resolution (“the first resolution”) authorising the plaintiff to sell six flats developed by the plaintiff to OCT's sons on condition that the latter were not to resell the flats to any party other than the plaintiff at the price of $100,000 per flat. Subsequently, OCT's sons, including the first defendant, each bought a flat. The sale and purchase agreements which they executed all contained a provision (“Special Condition 3”) that in compliance with the first resolution the buyer would not transfer or resell his flat to anyone other than the plaintiff at the price of $100,000.

Subsequent to OCT's death, the plaintiff's directors passed a resolution (“the second resolution”) to amend the first resolution such that,inter alia, OCT's sons could sell their respective flats to their respective male lineal descendants bearing the surname “Ong”. The first defendant, who was a director of the plaintiff at that time, was aware of the second resolution and neither objected to it nor challenged its effect.

After the relationship between the first defendant and the other directors and shareholders of the company, who were his half-brothers, broke down, the first defendant sold his shares in the company and resigned as a director. The plaintiff's directors then passed a resolution (“the third resolution”) rescinding the second resolution and approving the lodgment of a caveat against, inter alia, the first defendant's flat.

The plaintiff claimed that it was entitled to lodge the caveat pursuant to Special Condition 3. The first defendant objected, whereupon the plaintiff commenced this action for an order that it was entitled to lodge the caveat.

Held, dismissing the application:

(1) Special Condition 3 gave the plaintiff a right of first refusal in respect of the first defendant's flat. That right was a caveatable interest for the purposes of s 115 of the Land Titles Act (Cap 157, 2004 Rev Ed): at [11] and [12].

(2) The right of first refusal in Special Condition 3 was created pursuant to the first resolution. The plaintiff renounced that right when its directors passed the second resolution authorising OCT's sons to sell their respective flats to their respective lineal descendants bearing the surname “Ong”. As such, the plaintiff no longer had a caveatable interest when it lodged its caveat: at [13] to [18].

[Observation: The third resolution did not revive any right which the plaintiff had given up in passing the second resolution. Further, the third resolution could not be invoked against the first defendant without his consent as he was no longer a director or shareholder of the plaintiff at the time that resolution was passed: at [19].]

Gabriel Peter & Partners v Wee Chong Jin [1997] 3 SLR (R) 649; [1998] 1 SLR 374 (refd)

Ho Seek Yueng Novel v J & V Development Pte Ltd [2006] 2 SLR (R) 742; [2006] 2 SLR 742 (refd)

Land Titles Act (Cap 157, 2004 Rev Ed)s 115

Lee Eng Beng and Ryan Loh (Rajah & Tann) for the plaintiff

Albert Teo (PKWA Law Practice LLC) for the first defendant.

Judgment reserved.

Kan Ting Chiu J

1 This action is, on its face, a dispute over whether a caveat lodged in the Registry of Land Titles against a property under s 115 of the Land Titles Act (Cap 157, 2004 Rev Ed) (“LTA”) should remain on the land register. The real cause of the dispute was disharmony between the children of the two wives of a patriarch.

Background

2 The patriarch was the late Ong Chay Tong...