Shiffon Creations (Singapore) Pte Ltd v Tong Lee Co Pte Ltd

• Jurisdiction: Singapore
• Judge: L P Thean J
• Judgment Date: 29 December 1987
• Neutral Citation: [1987] SGHC 53
• Docket Number: Originating Summons No 937 of 1984
• Date: 29 December 1987
• Year: 1987
• Published date: 19 September 2003
• Plaintiff Counsel: Liu Yuen Ming and Trinel Chakraborty (Lim Ganesh & Liu)
• Citation: [1987] SGHC 53
• Defendant Counsel: Tan Kok Quan and Tan Sie Bee (Lee & Lee)
• Court: High Court (Singapore)
• Subject Matter: Delay in obtaining sub-division approval and subsidiary strata title,Whether damages could be awarded,Sale and purchase of property,Claim for damages pursued,Contract,Remedies,Breach of contract,Claim for specific performance abandoned due to supervening events,Damages,Damages at common law could not be awarded due to exemption clause in agreement,Whether Chancery Amendment Act 1858 (Lord Cairns' Act) applied in Singapore

By an agreement dated 16 November 1976 (the first agreement), the defendants agreed to sell to a company, JC Tuin (Pte) Limited (Tuin), a unit of a flatted factory, known as Block A, Unit No 7-8, on the seventh floor of a building called Tong Lee Building, then in the course of construction, on a piece of land, Lot 3142 of Mukim XXIV situate at Kallang Pudding Road. I shall refer to this unit of flatted factory as `the premises` and Tong Lee Building as `the building`. The purchase price for the premises was $162,120 and was payable by instalments progressively at various stages of construction of the building. No dispute arose out of the first agreement; the purchase price was fully paid by way of instalments at the times and in the manner as therein provided, and the building was completed; the architect in charge of the project issued a certificate of completion on 25 February 1978, and on the same day a temporary occupation licence in respect of the building was issued by the Development and Building Control Division. Presumably, Tuin took possession of the premises on or soon after that date.

About 41/2 years later, on 15 June 1982 or thereabout, Tuin agreed to sell the premises to the plaintiffs for a total sum of $607,950, including fittings and furniture therein. The subsidiary strata certificate of title of the premises had not, at that time, been issued, and it was arranged that on completion, amongst other things, Tuin would deliver to the plaintiffs a deed of assignment, assigning to the latter all the former`s rights and interest under the first agreement including their rights and interest in the premises and the defendants would enter into a fresh sale and purchase agreement with the plaintiffs. Accordingly, on 24 September 1982, which appears to be the date of completion, Tuin executed and delivered to the plaintiffs the deed of assignment, and the defendants and the plaintiffs entered into a sale and purchase agreement (the second agreement), whereby the defendants agreed to sell to the plaintiffs the premises at the price and on the terms and conditions in every respect same as those contained in the first agreement. The purchase price of the premises under the first agreement, which had been fully paid by Tuin, was credited to the account of the plaintiffs and the purchase price under the second agreement was treated as having been fully paid. There was no outstanding issue between the plaintiffs and the defendants at that time. The plaintiffs apparently were contented with their acquisition and were not concerned then that the legal title had yet to be transferred to them. No enquiry appeared to have been made by them or their solicitors with the defendants or their solicitors as to when such a transfer was expected to take place.

However, there were two outstanding matters concerning the premises which, at the time of completion of the purchase of the premises by the plaintiffs, those acting for the plaintiffs did not find in any way objectionable or unsatisfactory. First, prior to the plaintiffs entering into the agreement with Tuin for the purchase of the premises, the plaintiffs, solicitors, on 18 May 1982 or thereabout, submitted a legal requisition (exhibit PB 259) to the Development and Building Control Division (DBCD) and in answer to one of the questions therein DBCD stated that a decision on a proposal, namely: `proposed retention of pump house and additional water tank on roof and additional area to approved ten-storey flatted factory` had been deferred for three months as from 7 December 1981. Surprisingly, no further enquiry on this matter was pursued by the solicitors to ascertain whether any decision had since that date been made, as the three months` deferment had by then expired. Secondly, from that and other answers to the legal requisition the solicitors must have known also that no subdivision approval of the building under s 9(3) of the Planning Act (Cap 232, 1985 Ed) had been obtained, and in consequence, no subsidiary strata certificate of title of the premises could have been issued - no such document of title had been issued at the time. Again, no enquiry by the solicitors appeared to have been made with the defendants or their solicitors as to when the sub-division approval and the subsidiary strata certificate of title of the premises would be expected to be obtained by the defendants.

In the construction of the building, the following material deviations from the approved building plans were carried out:

(a) an addition of a pump house and water tank room on the roof, and

(b) an increase of the spacing between the columns by six inches resulting in an increase of the floor area.

These deviations, at the time when they were carried out, had never been approved by DBCD; indeed, that department was not even aware of such deviations initially, and they were only discovered at a later stage when an inspection of the building was carried out. These deviations were drawn to the attention of the defendants` architect in charge of the project, who, on 20 November 1979, submitted an application for the retention of the pump house and the water tank room. On 14 March 1980, DBCD informed the architect that approval in principle of the application was granted subject to certain conditions, and further, as for the increase in the spacing between the columns, the architect was requested to verify the floor area. On 28 August 1980, the architect submitted to DBCD plans for retention of the pump house and the water tank room on the roof and the enlarged floor area of the building, and on 16 January 1981, the architect submitted a set of calculation of the floor areas for verification by DBCD. On 7 August 1981, however, DBCD was instructed by the Ministry of National Development to defer consideration of the application for three months. Subsequently, by a series of extensions, the deferment was extended to 30 September 1983. The reason for such a long deferment was that action was being taken against the architect for making changes to the building without approval of the competent authority. The architect eventually was prosecuted and convicted of the offence and was fined.

After the conviction, DBCD reactivated the proposal, and eventually on 23 July 1984 - nearly four years after the application was first submitted by the architect - DBCD by a letter of that date informed the architect that the application was approved subject to certain conditions. Two of the conditions imposed were the payment of development charge for the increase in the plot ratio which was brought about by the increase in the floor area, and the payment of a penalty of $106,200 for having carried out the deviations without any planning approval. The fulfilment of these two conditions occasioned further delay. Following that letter, a development charge order was issued on 10 October 1984 imposing a charge of $833,812. Against that order, the defendants appealed to the Minister for National Development, who, after consideration thereof, reduced the development charge to $420,000 and the penalty to $21,240. The reduced development charge was duly paid by the defendants. On 8 January 1985, the architect submitted to DBCD for planning approval revised plans incorporating the deviations; these plans were subsequently returned to the architect for certain corrections and were later resubmitted by the architect. On 17 April 1985, approval was granted under s 9(1) of the Planning Act. Thereafter, the architect submitted revised building plans for approval which was given on 5 November 1985.

During this period, while the defendants and their architect were seeking approval for the unauthorized deviations, certain developments took place in the affairs of the plaintiffs. When the plaintiffs purchased the premises in 1982, they obtained the necessary finance from Lee Wah Bank Limited (LWB) and the premises were mortgaged to the bank as security. At that time, as no subsidiary strata certificate of title had been issued only an equitable mortgage of the premises could be created. In early 1984 or thereabout the plaintiffs decided to change their bank: to substitute Overseas Union Bank Limited (OUB) for LWB as their banker. They therefore applied to OUB for overdraft and other banking facilities which were approved subject to certain conditions. One of the conditions was that the premises were to be mortgaged to OUB as security; and this of course involved a discharge of the mortgage then subsisting in favour of LWB and a creation of a mortgage - an equitable mortgage - in favour of OUB. The latter`s solicitors, in the course of preparing the necessary security documents, submitted legal requisitions concerning the premises to various government departments, including DBCD. In answer to a question in the legal requisition whether there is any planning decision, DBCD said:

Proposed retention of pump house additional water tanks on the roof and additional areas to approved ten storey flatted factory. Approved in-principle to expire two months from 23 July 1984 subject to -

(i) 10 March 1984 to be taken as the material date for variation of development charge;

(ii) payment of development charge for the increase in plot ratio from 3.92 (gross) to 4.22 (gross);

(iii) payment of penalty fee for all the works carried out without planning approval, the amount being $106,200, and

(iv) compliance with other technical requirements.

OUB`s solicitors did not find this answer satisfactory. Accordingly, they referred the requisition to the plaintiffs` solicitors, who in turn sought clarification from the defendants` solicitors. No satisfactory replies were furnished by the defendants` solicitors and in turn the plaintiffs` solicitors could not furnish any satisfactory explanation to the solicitors of OUB. Because of this, OUB declined to accept the premises as security with...