See Bee Hoon v Quah Poe Hoe and Another

• Jurisdiction: Singapore
• Judge: L P Thean J
• Judgment Date: 31 May 1989
• Neutral Citation: [1989] SGHC 54
• Docket Number: Suit No 743 of 1987
• Date: 31 May 1989
• Year: 1989
• Published date: 19 September 2003
• Plaintiff Counsel: Shriniwas Rai (Hin Rai & Tan)
• Citation: [1989] SGHC 54
• Defendant Counsel: Leslie Netto (Ang Netto Rama & Wilson)
• Court: High Court (Singapore)
• Subject Matter: Purchasers,Conveyance,Whether purchasers in default under condition 8 of Law Society's Conditions of Sale 1981,requirement that vendors performed certain acts before completion,Requirement that vendors perform certain acts before completion,Effect of bankruptcy notice issued but not served on debtor,Completion,Land,Effect of bankruptcy notice not served on vendor on completion,Insolvency Law,Failure to complete on time due to default of both purchasers and vendors,Effect on conveyancing transaction,ss 52 & 54 Bankruptcy Act (Cap 20),Whether purchaser entitled to interest by way of liquidated damages for late completion,Bankruptcy

Cur Adv Vult

The facts in this case are not in dispute. On 21 August 1986 the defendants offered in writing to sell to the plaintiff the property known as 56, Holland Road, Dragon Court, Singapore 1025, at the price of $223,500 on terms and conditions therein setforth. A sum of $5,000 was paid to the defendants as consideration for the offer which was kept open for acceptance until 29 August 1986. The offer was duly accepted by the plaintiffs on 27 August 1986, and in accordance with the terms thereof a sum of $17,350 was paid to the solicitors for the defendants to be held by them as stakeholders; thus, a valid and binding agreement (the agreement) for the sale and purchase of the property was made between the defendants and the plaintiff on that date. The agreement is simple and straightforward and incorporates `The Singapore Law Society`s Conditions of Sale 1981` (Law Society`s Condition of Sale), and under cl 6 of the terms of sale, the purchase was to be completed at the office of the solicitors for the defendants on or before 20 October 1986.

At the material time the property was mortgaged to Citibank NA (Citibank) and was subject to a charge in favour of Central Provident Fund Board (CPF) to secure the amounts owing to them respectively. On the date of completion, as fixed by the agreement, the defendants found they did not have sufficient funds (together with the purchase moneys) to redeem the property from Citibank and CPF and were therefore unable to complete the sale of the property. On 21 October 1986 the defendants` solicitors telexed to the plaintiff`s solicitors informing the latter of this fact and intimating that the defendants would like to meet the plaintiff `to work out the damage` the plaintiff had sustained and, in mitigation of damages, offered to allow the plaintiff to occupy the property, free of rent, until she found alternative accommodation, subject to a maximum period of six months. Apparently, pursuant to this offer, possession of the property was given to the plaintiff on 31 October 1986. The defendants did meet the plaintiff on 5 November 1986 at the latter`s solicitors` office, but nothing appeared to have been worked out between the parties in terms of damages or otherwise. The defendants` solicitors subsequently on 26 November 1986 in a letter to the plaintiff`s solicitors reiterated that the defendants were unable to complete the sale of the property and requested for the return of the title deeds previously forwarded to the plaintiff`s solicitors. This was soon followed by a further letter from the defendants` solicitors dated 9 December 1986 by which they returned the sum of $17,350, which they had held as stakeholders, plus interest accrued. That letter intimated that the defendants would also refund to the plaintiff the sum of $5,000 (which was the consideration for the offer) together with interest and that they, the defendants, had `no intention of selling the property to anyone else`. It seems to me that the defendants had there by repudiated the agreement; but the plaintiff did not appear to have accepted such repudiation, though, strangely enough, the plaintiff`s solicitors on 5 March 1987 demanded from the defendants` solicitors the refund of the sum of $5,000. That sum, however, was never refunded to the plaintiff.

The next event that took place was on 13 March 1987 when the plaintiff took out a writ against the defendants claiming for specific performance of the agreement, damages and refund of the $5,000 with interest and other reliefs. After the writ had been served on the defendants, the plaintiff took out an application under O 81 of the Rules of the Supreme Court 1970 seeking an order for specific performance of the agreement, interlocutory judgment against the defendants for damages in lieu of or in addition to specific performance and costs. On 22 May 1987, the application was heard before the assistant registrar who made an order for specific performance of the agreement and for interlocutory judgment to be entered against the defendants with damages to be assessed for breach of contract in lieu of or in addition to specific performance and for costs. After the order was obtained, the plaintiff`s solicitors on 29 June 1987 wrote to the defendants` solicitors requiring the defendants to complete the sale within 14 days and requesting for a completion account and certain documents. In response, the defendants` solicitors on 7 July 1987 by telex suggested that the completion be scheduled to take place on 31 July 1987. Subsequently, exchanges of correspondence by telexes or letters took place between the defendants` solicitors and the plaintiff`s solicitors, in which various difficulties were raised by the latter which appeared to have impeded the completion taking place on 31 July l987 as fixed by the defendants` solicitors. I shall deal with these difficulties shortly, but for the moment it is sufficient to mention that one of them was the issue of a bankruptcy notice by one Cheang Wai Yew against the first defendant. No completion took place on 31 July 1987.

Thereafter ensued a period of about four and a half months in which neither of the parties appeared to have communicated with the other. Certainly there was no exchange of correspondence between the two firms of solicitors with regard to completing the sale and purchase of the property. Then on 18 December 1987, the plaintiff`s solicitors resurrected the matter by their telex to the defendants` solicitors. Again, further exchanges of correspondence took place between the two firms of solicitors, which continued for about two and a half months, and, eventually, only on 16 March 1988 was the sale and purchase completed. On 5 October 1988 the question of assessment of damages came on for hearing before the assistant registrar. Before him, no viva voce evidence was given and the parties relied wholly on two bundles of documents produced before him. Both the bundles were agreed. They consisted mainly of correspondence - mostly telexes - passing between the plaintiff`s solicitors and the defendants` solicitors. The plaintiff relied on cond 8 of the Law Society`s Conditions of Sale and computed the amount of damages in the sum of $10,492.65. At the conclusion of the hearing, the assistant registrar accepted the computation submitted on behalf of the plaintiff, and awarded to the plaintiff damages in the sum of $10,492.65 and costs. Against that order, this appeal is now brought.

Before me, as it was before the assistant registrar, the plaintiff`s entitlement to damages is founded solely on cond 8 of the Law Society`s Conditions of Sale and is disputed by the defendants also on the basis of that condition. It is therefore convenient at this stage to set out cond 8 which is as follows:

If the sale shall not have been completed on or before the date fixed for completion, then

(a) If the delay in completion is attributable solely to the default of the purchaser, he shall pay interest on the amount of the purchase price (less the deposit and any sum paid to account) at the rate of 10% per annum from and including the date fixed for completion until the date of actual completion of the sale.

(b) If the delay in completion is attributable solely to the default of the vendor, he shall pay to the purchaser by way of liquidated damages interest at the rate of 10% per annum on the purchase price of the property from and including the date fixed for completion until the day of actual completion: Provided that if possession of the property sold has been delivered by the vendor to the purchaser before the date of actual completion then such damages shall be abated by a sum equal to the rent received by the purchaser or in case the property is delivered with vacant possession by the equivalent of a rent calculated on the annual value of the property fixed under the Property Tax Act.

(c) If the delay in completion is attributable to some cause other than the default of the vendor or the purchaser or to the default of both the vendor and the purchaser, no interest or damages shall be payable.

It is the contention of counsel for the plaintiff that the delay in completing the sale and purchase was attributable solely to the default of the defendants, and therefore they were obliged to pay to the plaintiff by way of liquidated damages interest at the rate of 10% pa on the purchase price of the property from the date fixed for completion (inclusive of that date) until the day of actual completion less a sum equivalent to the amount of rent calculated on the annual value of the property as determined under the Property Tax Act. Counsel for the defendants accepted that up to 31 July 1987 the delay in completing the transaction was attributable solely to the default of the defendants. However, he argued that for the period thereafter the delay was not attributable solely to the default of the defendants; it was attributable in part to the default of the plaintiff. Accordingly, under para (c) of cond 8, for the period after 31 July 1987, no interest by way of liquidated damages should be awarded to the plaintiff. The issue is one of fact and also turns on the true construction of paras (b) and (c) of cond 8, and, in particular, the term `default` therein.

As the defendants accepted that the period of delay up to 31 July 1987 was attributable solely to their default, it is only necessary to examine the relevant correspondence passing between the plaintiff`s solicitors and the defendants` solicitors from July onwards to determine whether the subsequent period of delay was attributable solely to the default of the defendants or to some cause other than the default of the defendants or the plaintiff or to the default of both of them. For this purpose, the letter of 29 June 1987 written by the plaintiff`s solicitors to the defendants` solicitors is a convenient starting point; that was the first...