Quek Kheng Leong Nicky and Another v Teo Beng Ngoh and Others and Another Appeal

• Jurisdiction: Singapore
• Judge: Chan Sek Keong CJ
• Judgment Date: 21 July 2009
• Neutral Citation: [2009] SGCA 33
• Docket Number: Civil Appeals Nos 121 and 122 of 2008
• Date: 21 July 2009
• Year: 2009
• Published date: 22 July 2009
• Plaintiff Counsel: Murugaiyan Sivakumar Vivekanandan (Madhavan Partnership)
• Citation: [2009] SGCA 33
• Defendant Counsel: Ling Daw Hoang Philip (Wong Tan & Molly Lim LLC) and Fan Kin Ning (David Ong & Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: "Without prejudice" communications,Whether terms of agreement varied by "without prejudice" communications,Admissibility of evidence,Evidence,Whether "without prejudice" communications should be admitted to prove existence and terms of concluded compromise agreement,Negotiations on "without prejudice" basis to delay payment

21 July 2009

Andrew Phang Boon Leong JA (delivering the grounds of decision of the court):

Introduction

1 These two appeals concern the sale and purchase of a property at 13 Jalan Sindor, Singapore (“the Property”). The appellants were Quek Kheng Leong Nicky and his wife, Lee Pheng (“the Purchasers”). The respondents were Teo Beng Ngoh, Teo Yeow Khoon, Teo Yeow Hing and Teo Jean Seng Holdings Pte Ltd (collectively, “the Vendors”).

2 Civil Appeal No 122 of 2008 arose out of Originating Summons No 1833 of 2007, in which the Vendors sued the Purchasers for the repudiatory breach of the sale and purchase agreement for the Property (“the S&P Agreement”). The trial judge (“the Judge”) allowed the Vendors’ claim but granted the Purchasers relief against forfeiture on terms. Civil Appeal No 121 of 2008 arose out of Originating Summons No 72 of 2008, in which the Purchasers sought specific performance of the S&P Agreement. The Judge dismissed the Purchasers’ claim.

3 Having considered carefully the submissions of the parties, we decided to allow both appeals. We now set out the reasons for our decision.

Background facts

4 The facts were not in dispute. The Vendors entered into a joint venture to develop residences at Jalan Sindor (“the Vendors’ JV Agreement”). They bought five houses en bloc and redeveloped them into seven new houses for resale. The titles of these houses were held individually by each of the Vendors. In the process, the lots of the five houses underwent amalgamation and subdivision in three phases (a more detailed account of the facts can be found at [3]–[7] of the High Court decision in Teo Beng Ngoh v Quek Kheng Leong Nicky [2008] SGHC 228 (“the GD”)). Only the third phase was relevant here. In this phase, Lots 16275V, 2754V and 16277T of Mukim 18 were to be amalgamated into a single Lot 16841. This Lot 16841 was then to be subdivided into two new lots, Lot 16842T (11 Jalan Sindor) and Lot 16843A (13 Jalan Sindor, ie, the Property). A semi-detached house was to be built on each lot.

5 The Purchasers signed an option dated 28 May 2007 with the first respondent, Teo Beng Ngoh, to purchase the Property (“the Option”) for $1.36m (“the purchase price”). The terms of the Option also formed the terms of the S&P Agreement. One per cent of the purchase price was paid to secure the Option.

6 On 11 June 2007, the Purchasers exercised the Option by paying a further 4% of the purchase price. Clause 1 of the Option provided as follows:

The balance of the purchase price shall be payable as follows:-

a. within twelve (12) weeks from the date of exercise of the Option, a sum representing 94% of the purchase price shall be given to the Vendor in exchange for vacant possession of the Property to be delivered by the Vendor to the Purchaser;

b the balance 1% shall be on legal completion in accordance with clause 3 hereof.

7 After the Purchasers exercised the Option, they took vacant possession of the Property on 22 July 2007 in order to carry out renovation works. They were later given permission by the Vendors to occupy the Property on 28 August 2007. The Vendors did not request the payment of 94% of the purchase price as required under cl 1 of the Option at this particular point in time.

8 Subsequently, the solicitors for the Central Provident Fund Board (“CPFB”), Aptus Law Corporation (“Aptus”), wrote to the Purchasers’ original lawyers, M/s Heng, Leong & Srinivasan (“HLS”), on 16 August 2007 requesting the child lot/individual subdivided lot number for the Property in accordance with s 54A of the Land Titles Act (Cap 157, 2004 Rev Ed) (“the Act”). HLS forwarded this request to the Vendors’ original lawyers, M/s David Ong & Partners (“DOP”). DOP replied that they could not obtain the subdivided lot number until the Purchasers consented to certain cross-transfers enabling the Vendors to amalgamate the parent lots, ie, Lots 16275V, 2754V and 16277T. The consents to the cross-transfers were signed by HLS sometime on or before 30 August 2007.

9 On 20 August 2007, HLS wrote to DOP^{[note: 1]} stating that it was “impossible” for the Purchasers to obtain the release of the housing loan and the money from the CPFB without the resolution of certain “irregularities”, namely that:^{[note: 2]}

(a) the Vendors had failed to procure an individual subdivided lot number for the Property, thus violating s 54A of the Act (“the First Issue”);

(b) because the Vendors held the title to each of the parent lots individually, there was no assurance or documentation to verify that title to the Property would be duly conveyed to the Purchasers ( “the Second Issue”); and

(c) there were caveats lodged against the Property which conflicted with the Purchasers’ rights to the Property (“the Third Issue”).

10 On the same day, HLS also wrote another letter to DOP marked “without prejudice” (“the First Letter”) that stated:

WITHOUT PREJUDICE

Dear Sirs,

PURCHASE OF 13 JALAN SINDOR SINGAPORE

We refer to your letter today and the telephone conversation between your Mr David Ong and our Amy Cheah this afternoon. We would reiterate the following irregularities as at today:-

(a) despite Section 54A Land Titles Act, your clients issued an option to our clients;

(b) you have asked our clients to consent to a transfer to a third party without any assurance or documentation to verify that the title which relates to the above property will be duly conveyed to our clients. Please let us have the same as soon as possible; and

(c) there are Caveats lodged against the property which conflict with our clients’ rights as purchasers. Please procure their withdrawal immediately.

We understand from your office that if the ‘cross-transfers’ mentioned in your letter are duly registered then the lots will be made available. We stress that these lots numbers should have been made before the issue of the Option and are, in any event, still obtainable immediately by your client’s surveyor from the Chief Surveyor, based on the approved building plans and WP.

Without resolving the above, it is impossible for our clients to obtain the release of the housing loan as well as the CPF [Central Provident Fund] funds, which are required for financing the payment under Clause 1(a) of the option i.e. 94% of the purchase price, in exchange for vacant possession. This is currently due on 3 September 2007.

Without prejudice to our clients’ rights, we are instructed to propose that the payment under Clause 1(a) be postponed to a date falling three (3) weeks from the resolution of all the above issues and, pending the same, that our clients be granted vacant possession forthwith so as not to be unduly prejudiced by the present predicament.

Your early reply would be appreciated.

[emphasis added]

DOP replied to HLS on 27 August 2007 in a letter that was not marked “without prejudice” (“the Second Letter”), stating as follows:^{[note: 3]}

Dear Sirs,

13 JALAN SINDOR SINGAPORE

We refer to your letter dated 20 August 2007 marked without prejudice.

Please be informed that our clients had since 22 July 2007 handed vacant possession of the above property to your clients. A copy of your clients’ undertaking addressed to our clients is enclosed for your information.

We are instructed that our clients are prepared to postpone the payment under clause 1(a) to 2 weeks instead of 3 weeks as proposed in paragraph 4 of your said letter.

[emphasis added]

HLS wrote back to DOP on 28 August 2007 (“HLS’s 28 August Letter”):^{[note: 4]}

Thank you for your letter dated 27 August 2007.

Notwithstanding the postponement we trust that the vendor is attending to all matters necessary to regularize all outstanding issues expeditiously.

Further, we note from your letter that our clients were granted vacant possession with effect from 22 July 2007. However the enclosed letter of undertaking refers specifically to possession for the purposes of renovation works only. Please confirm as soon as possible that our clients may occupy the property henceforth.

As we shall see (below at [25]), these letters were of pivotal importance in the context of the resolution of the present appeal.

11 DOP proceeded to resolve these alleged “irregularities”, although they maintained that they did so out of goodwill and without prejudice to their clients’ rights. The First Issue was resolved when the Vendors obtained the individual subdivided lot number, Lot 16843A, for the Property. When this lot number was made “live” in the lot base system, DOP made the first request for payment to the Purchasers via HLS on 15 October 2007 (“DOP’s request of 15 October 2007”).

12 There was, however, a dispute as to when the Second and Third Issues were resolved. In so far as the Second Issue was concerned, DOP forwarded a copy of the Vendors’ JV Agreement to the Purchasers on 7 September 2007. This proved unsatisfactory to the Purchasers. On 18 October 2007, the Purchasers requested the certificate of adjudication and stamp duty on the Vendors’ JV Agreement as well as a transfer in-escrow pending the issuance of the certificate of title for the Property (“the Transfer In-Escrow”). DOP provided the certificate of adjudication and stamp duty on 18 October 2007. On 19 October 2007, the Purchasers requested that the Vendors provide an undertaking that they would be bound by the Vendors’ JV Agreement (“the Vendors’ Undertaking”). Draft copies of the Transfer In-Escrow and the Vendors’ Undertaking were exchanged on 22 October 2007. The executed copies were given to the Purchasers on 31 October 2007.

13 In so far...