Phoenix Heights Estate (Pte) Ltd v Lee Kay Guan and Another

• Jurisdiction: Singapore
• Judge: Lord Brightman
• Judgment Date: 26 May 1982
• Neutral Citation: [1982] SGPC 4
• Docket Number: Privy Council Appeal No 15 of 1979
• Date: 26 May 1982
• Year: 1982
• Published date: 19 September 2003
• Plaintiff Counsel: Desmond Wright QC and Howard Cashin (Le Brasseur & Burry)
• Citation: [1982] SGPC 4
• Defendant Counsel: Stewart N Mckinnon QC and Stephen Auld (Thomas Cooper & Stibbard)
• Court: Privy Council
• Subject Matter: reg 34(1) Local Government (Building) Regulations 1966,Date of completion stipulated in agreement,Purchaser's refusal to occupy house unless title issued,Land,Contract,Contractual terms,Sale of land,Conditions of sale,s 9 Planning Act (Cap 279),Liquidated damages not a penalty,Liquidated damages for delay from agreed date of completion to date of issue of certificate of title,r 9A Housing Developers Rules 1965,Failure to give notice to complete,Express terms

This appeal from the Court of Appeal of Singapore raises a short point on a contract for the sale of land: whether a provision in the contract for the payment of liquidated damages in the event of the vendor`s delay in completion is valid, and if so, to what extent it applied on the facts of the instant case.

In or about 1971 the appellant (the vendor) started to develop a building estate in Singapore known as the Phoenix Heights Estate. Phase 2 of the development consisted of the erection of some 100 buildings for use as houses, flats and shops.

Such a development is governed by certain ordinances and regulations, to some of which it is necessary to refer. Under s 9(1) of the Planning Act, the development of land requires the permission of the competent authority. Under sub-s (3) of that section the `Subdivision` of land requires a similar permission. `Subdivision has a defined meaning in the Act, but for present purposes, it is sufficient to say that this sale, being a part disposal of the vendor`s estate, involved a subdivision.

The Local Government (Building) Regulations 1966 deal with fitness for occupation. Under reg 34(1) a certificate of fitness for occupation of a building is to be given when (shortly stated), the Chief Building Surveyor or his authorized officer has inspected the building and is satisfied that it conforms with the approved plans. Under sub-r (3) it is unlawful for a person to occupy a building, or to permit it to be occupied, unless a certificate of fitness for occupation has been issued. There is, however, a proviso `that the Chief Building Surveyor may in his discretion grant a licence for the temporary occupation of such building for a period not exceeding six months, in cases where only minor deviations from the approved building plans in respect thereof have been made and pending full compliance with the requirements of the Chief Building Surveyor before the issue of a certificate of fitness`.

Lastly it is necessary to refer to the Housing Developers Rules 1965, which were made under the Housing Developers (Control and Licensing) Ordinance 1965, and were amended by the Amendment Rules of 1967. Rule 9(A) of the amended Rules provides (sub-r 1) that an agreement for sale between a housing developer and a purchaser shall be in the form prescribed in a schedule thereto, and (sub-r 2) that no amendment, deletion or alteration to any such form shall be made except with the approval of the Controller of Housing.

On 6 January 1973 a written agreement (the sale agreement) was made between the vendor and the respondents (the purchasers) for the sale to the purchasers of a plot forming part of the Phoenix Heights Building Estate, and for the erection thereon of a detached dwelling house which came to be known as No 8 Phoenix Garden. The sale agreement followed the prescribed form.

The purchase price was $180,000, payable by instalments as the building advanced. The payment of the final instalment was regulated by cl 3(h) in the following terms:

On completion of the sale and purchase herein as hereinafter provided and on delivery to the purchaser of vacant possession of the property sold the balance of 10% of the purchase price, 5% of which shall forthwith be paid to the vendor and the remaining 5% shall be paid to the purchaser`s solicitors as stakeholders to be paid to the vendor only on production of the certificate of fitness for occupation of the chief building surveyor in respect of the building.

Clause 10 of the sale agreement provided that the vendor should at its own expense obtain the approval of the competent authority to the necessary subdivision.

Clause 11 of the sale agreement is the crucial one. In reading the clause it will be convenient to divide it into its component parts.

(A) The sale and purchase herein shall be completed at the office of the vendor`s solicitor 14 days after the receipt by the purchaser or his solicitors of the notice to complete of the vendor`s or of its solicitors such notice to be accompanied by the vendor`s architects` certificate that the building and road drainage and sewerage works have been completed in accordance with the relevant approved plans and that sewerage, water and electricity and/or gas services have been duly connected to the building and that the said approval of the competent authority for subdivision has been obtained.

(B) On completion, the vendor shall make and execute to the purchaser an assurance of the property sold such assurance to be prepared by and at the expense of the purchaser.

(C) The said notice to complete shall be given by the vendor on or before 30 June 1973 or such other subsequent date or dates as may after the date hereof be appointed by the Controller of Housing.

(D) If the...