Re 41B Lorong 17 Geylang, Singapore 388564

JurisdictionSingapore
JudgeJudith Prakash J
Judgment Date11 July 2007
Neutral Citation[2007] SGHC 112
Docket NumberOriginating Summons No 785 of 2007
Date11 July 2007
Published date17 July 2007
Year2007
Plaintiff CounselTan Siew Tiong (Lawhub LLC)
Citation[2007] SGHC 112
Defendant CounselPrabhakaran Narayanan Nair (Ong Tan & Nair)
CourtHigh Court (Singapore)
Subject MatterRelevant considerations,Land,Conveyance,Sale of land,Property said to be affected by road reserve,No intention to purchase property,Whether reply unsatisfactory,Option to purchase,Whether term to refund option moneys if legal requisitions unsatisfactory ought to be implied,Whether exercise of option effective,Recovery of option moneys,Legal requisitions

11 July 2007

Judith Prakash J:

Background

1 The defendant (“the vendor”) is the owner of the land and premises known as 41B Lorong 17 Geylang, Singapore (“the property”). On 2 September 2006, in consideration of the payment of $5,000, the vendor granted the plaintiffs (“the purchasers”), who are husband and wife, an option to purchase the property.

2 The option document was a rather clumsily drafted one. The first page contained the vendor’s offer to sell the property to the purchasers and stated that this offer could be accepted by the purchasers signing at the foot of the copy of the option that was marked “Acceptance Copy” and delivering the same duly signed together with five percent of the purchase price less the option money of $5,000 to the vendor’s solicitors on or before 4pm on 17 September 2006.

3 The next two pages of the document bore the heading “Terms of Sale” and contained 16 clauses. In the context of the present application, the relevant clauses were cll 7, 8, 9 and 14. These provided as follows:

7. The property is sold subject to the Purchaser’s Solicitors receiving satisfactory replies to their requisitions sent or to be sent by them to the various Government Departments including the MRTC, the Road Interpretation Plan from the Development Control Division and the Drainage Interpretation Plan from the Drainage Department and in the event of any of the replies to such requisitions being found unsatisfactory the Purchasers may annul the sale in which event all the monies paid by the Purchasers to the Vendors shall forthwith be refunded to the Purchasers without any interest or deduction whatsoever and neither party shall have any claims against the other for costs damages or compensation whatsoever (sic) each party to pay his/their own legal costs in respect of the abortive sale and purchase Provided that the Purchasers shall not raise any objection or be entitled to annul the sale if the property is affected by a Category 5 Road which may be shown on the Road Interpretation Plan and the Purchasers shall be bound to complete the purchase in accordance with and subject to the terms and conditions herein contained.

8. The option money Dollars Five Thousand Only (S$5,000.00) shall be treated as part payment towards the 5% deposit of the purchase price which shall be paid on the exercise of the option as aforesaid.

9. If this option is not exercised on or before the date hereby stipulated, this option herein contained shall lapse and the option money paid shall be forfeited.

14. This option when exercised shall constitute a binding contract.

4 It would be noted therefore that although there was only one document, it was capable of giving rise to two distinct contracts, a rather odd situation which, however, is commonly encountered in relation to real property transactions in Singapore. The first contract would be the unilateral contract (the option) constituted by the offer (for valuable consideration) by the vendor to sell the property to the purchasers if they signed the Acceptance Copy and paid the deposit by a certain date. The second would be the actual synallagmatic contract for the sale and purchase of the property (the sale contract) which would come into existence upon the proper exercise of the option by the purchasers. Which of the clauses of the Terms of Sale applied to which distinct contract would really be a matter of construction of each individual clause because the presentation of the document as a whole did not clearly differentiate between the two contracts. From my reading, it would appear that of the clauses under the Terms of Sale, only cl 9 related exclusively to the option. The other clauses, apart from cl 16 which dealt with payment of commission to the vendor’s agent and cl 1 which specified that the sale price was $285,000 (and therefore was applicable to both the option and the sale contract), related only to the sale contract. Clause 14 which read “this Option when exercised shall constitute a binding contract” must be interpreted as meaning that when the option was exercised, a binding sale and purchase contract in respect of the property would come into existence, rather than as meaning that there was no contract of any sort in existence before the exercise of the option.

5 After the option was granted, the purchasers’ solicitors, M/s K K Yap & Partners (“KKY”) sent out legal requisitions to the usual government bodies. On 15 September 2006, KKY received a reply from the Land Transport Authority (“LTA”), which reply took the form of the Road Interpretation Plan or Road Line Plan (“the RIP”). The RIP indicated that the property was affected by lines of road reserve as marked on that plan. These reserves were to allow the widening of Lorong 17 Geylang and the two back lanes that ran along the boundary lines of the property. The purchasers were concerned that the road reserves might adversely affect the property. Therefore KKY wrote to the vendor’s solicitors, M/s Ong Tan & Nair (“OTN”) asking for an extension of the deadline for the exercise of the option from 17 September 2006 to 25 September 2006 so that the purchasers could investigate the situation. On 18 September 2006, OTN replied to state that the vendor would not agree to any extension of the option and that the option had to be exercised by 18 September itself. It was made clear to KKY that there was no question of the vendor returning the option moneys paid if the purchasers did not exercise the option as the vendor did not accept that there had been an unsatisfactory reply to the LTA requisition.

6 The purchasers were in a dilemma. They wanted the option money back. They were afraid that if they did not exercise the option, the option money would be forfeited. They considered that to get the money back, they had no choice but to exercise the option. They therefore signed the Acceptance Copy of the option and their solicitors returned it to OTN together with a cheque for $9,250 being the balance of the five percent of the purchase price payable on exercise of the option. The contents of the cover letter sent by OTN are important and I will therefore quote it in full. The letter read:

We refer to the matter above and your letter to us dated 18 September 2006, indicating that today is the last day in which the Option is to be exercised.

We also refer to the teleconversation between your Mr Nair and our Miss Loke today and understand that your clients are not prepared to consider refunding to our clients the Option Money of $5000 prior to our clients exercising the Option to Purchase, notwithstanding that we have notified you that the property is affected by lines of road reserve and land required as road reserve according to the Road Interpretation Plan conducted on 15 September 2006.

Pursuant to our clients’ instructions, we will proceed and hereby exercise the Option to Purchase today, without prejudice to our clients’ rights under the Option, especially with regards to Clause 7 of the Option.

We enclose herewith:-

(a) Duly signed Option To Purchase dated 18 September 2006;

(b) Our clients’ cheque for the sum of $9,250.00 issued in favour of ONG TAN & NAIR being 4% of the purchase price to be held by you as stakeholders; and

(c) a copy of the title search.

We also enclose for your clients’ attention an original copy of the Road Interpretation Plan dated 15 September 2006, showing the extent of the property that is affected by the lines of road reserve and the extent of the area of the land required as road reserve. We are of the view that the Road Interpretation Plan is unsatisfactory.

Pursuant to our client’s instructions, we write to inform you that in view of the unsatisfactory Road Interpretation Plan, our clients have decided to exercise their right to annul the sale and purchase of the property pursuant to Clause 7 of the Option to Purchase.

Consequently please arrange for all monies for the sum of $14,250.00 paid by our clients to your clients to be returned to us forthwith.

7 It would be noted that although the purchasers had purported to exercise the option, they were asserting at the same time that they had the right to cancel the sale and purchase of the property because cl 7 of the Terms of Sale gave them that right when there was an unsatisfactory reply to their requisition, and they were also demanding that the sum of $14,250 paid by them (being the original option money of $5,000 plus the subsequent sum of $9,250) be returned to them forthwith. This was even before the vendor’s solicitors had had a chance to encash the cheque for $9,250.

8 On 29 September 2006, KKY wrote again to OTN. This time they forwarded a copy of the LTA’s letter of 18 September 2006 together with the explanatory notes to the RIP and the scaled dimensions on the plan, showing the extent to which the road reserves affected the property. The letter stated that in view of the situation, KKY had the purchasers’ instructions that they would not purchase the property. The letter ended by demanding full repayment of the deposit paid by the purchasers. OTN responded on 3 October 2006. They stated that they had looked at the documents sent over by KKY and...

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1 cases
  • Law Society of Singapore v Dhanwant Singh
    • Singapore
    • High Court (Singapore)
    • 20 décembre 2019
    ...Liew Boon KweeandBenedict Tan Yixun (Essex LLC) for the respondent. Case(s) referred to 41B Lorong 17 Geylang, Singapore 388564, Re [2007] 3 SLR(R) 729; [2007] 3 SLR 729 (folld) Angliss Singapore Pte Ltd v PP [2006] 4 SLR(R) 653; [2006] 4 SLR 653 (refd) Aqua Art Pte Ltd v Goodman Developmen......
1 books & journal articles
  • Land Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2007, December 2007
    • 1 décembre 2007
    ...to be removed, it was, accordingly, unnecessary to address the issue. Conveyancing 18.26 In Re 41B Lorong 17 Geylang, Singapore 388564[2007] 3 SLR 729, the court employed the device of an implied term, among others, to enable the purchasers to obtain the return of the option moneys. The pur......

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