Tay Ah Poon and Another v Chionh Hai Guan and Another

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 29 July 1996
• Neutral Citation: [1996] SGHC 148
• Docket Number: Suit No 2020 of 1995
• Date: 29 July 1996
• Year: 1996
• Published date: 19 September 2003
• Plaintiff Counsel: Leong Chooi Peng (Leong & Gay)
• Citation: [1996] SGHC 148
• Defendant Counsel: Lim Kwang Min (Sim Hill & Wong)
• Court: High Court (Singapore)
• Subject Matter: Land,Agreement providing for return of deposit and payment of 10% of purchase price upon breach by vendor,Whether liquidated damages exclusive remedy,Whether vendors could refuse to complete sale,Frustration,Whether purchasers entitled to compensation,Subject property compulsorily acquired by government,Conditions of sale,Breach,Whether purchasers entitled to specific performance and/or compensation,Liquidated damages,Sale and purchase of HDB flat,No claims to be made by either party upon payment of stipulated damages,Discharge,Sale of land,Whether contract frustrated,Flat became part of redevelopment scheme and compulsorily acquired,Contract

The facts

The plaintiffs signed a contract with the defendants on 21 March 1995 (the agreement) whereby the plaintiffs agreed to purchase and the defendants agreed to sell, a Housing and Development Board (HDB) flat situated at Block 14 Tiong Bahru Road #01-132, Singapore (the flat) for a consideration of $228,000 (the purchase price).

The agreement contained, inter alia, the following terms:

(a) the plaintiffs would pay to the defendants a deposit of $5,000 upon signing the agreement;

(b) the plaintiffs would call at the office of the HDB between 22 March and 29 April 1995 to register their purchase;

(c) in the event the plaintiffs breached the agreement, their deposit would be forfeited and in addition, they had to pay to the defendants compensation equivalent to 10% of the purchase price; if the defendants breached the agreement, they had to refund the deposit to the plaintiffs and similarly compensate the plaintiffs 10% of the purchase price (cl 5).

The plaintiffs paid the deposit on 22 March 1995 which was duly acknowledged by the housing agent (Chio Cheng Keng) who had negotiated the sale, on the defendants` behalf.

On 22 July 1995, the plaintiffs attended at the office of the HDB and paid $17,905.15 towards the resale proceeds, the legal and incidental fees. The HDB scheduled completion for 15 September 1995.

On 23 August 1995 there was a press announcement by the Minister of National Development on the en-bloc redevelopment scheme for Tiong Bahru. This was followed by compulsory acquisition of block 14 Tiong Bahru Road on 12 September 1995 which was gazetted on 14 September 1995.

On 13 September 1995 the defendants` solicitors wrote to the plaintiffs stating that their clients did not wish to proceed with the sale and enclosed a cheque for $27,800 being the refund of the deposit ($5,000) together with the agreed 10% ($22,800) liquidated damages stipulated under the agreement. On 15 September 1995 the defendants failed to turn up at the HDB for completion.

On 16 September 1995 the plaintiffs` solicitors served a notice to complete on the defendants (which they subsequently amended). By then the plaintiffs had paid a total of $22,800 towards the purchase price. On 20 September 1995 the plaintiffs` solicitors replied to the defendants` solicitors` letter of 13 September 1995 (which they received on 18 September 1995) stating that the plaintiffs refused to accept the unilateral repudiation of the agreement and would be returning the defendants` cheque.

Further correspondence ensued between the parties` solicitors with no result as each side refused to compromise on the stand it had taken. All correspondence was carbon copied to the HDB`s resale unit.

On 14 November 1995 the plaintiffs commenced these proceedings claiming inter alia, specific performance of the agreement, alternatively damages and a declaration that they are entitled to compensation from the Collector of Land Revenue for the compulsory acquisition of the flat.

After the defendants` solicitors had entered an appearance to the writ, the plaintiffs` solicitors filed an application for summary judgment (the application) pursuant to O 14A of the Rules of the Supreme Court.

The application

In her affidavit filed in support of the application, the second plaintiff, who is the daughter of the first plaintiff, deposed to the following additional facts:

(a) the plaintiffs took a long time to select a flat as the first plaintiff has a heart condition and they wanted a ground floor unit which was near a MRT station - the flat met their requirements;

(b) they were presently residing with the second plaintiff`s sister (the sister), who, upon learning that the plaintiffs had found alternative accommodation, sold her flat which completion was in November 1995. Because the defendants repudiated the agreement, the plaintiffs were obliged to rent the sister`s flat from its purchaser at $2,000 per month, which sum they can ill afford;

(c) the government`s compulsory acquisition of Block 14 Tiong Bahru Road (including the flat) came with a very attractive compensation package which included:

(i) an award of $140,000 - $175,000 for 3-room units and $200,000- $255,000 for 4-room units plus an ex gratia payment;

(ii) an assured allocation of a new flat in the redeveloped estate which came with a fresh 99-year lease;

(iii) 20% discount on the price of a new flat subject to a maximum sum of $30,000;

(iv) exemption from the resale levy.

(d) the defendants decided to renege on the agreement because of the attractive compensation package offered by the government for compulsory acquisition of the flat but, the beneficial ownership thereof having passed to the plaintiffs immediately upon the signing of the agreement, the plaintiffs are entitled to the compensation award;

(e) the agreement made no provision for compulsory acquisition and therefore cl 5 providing for agreed liquidated damages in the event of breach by either party has no application.

On 24 January 1996 the application came up for hearing before the learned assistant registrar who dismissed it; she upheld the validity of cl 5 of the agreement providing for fixed liquidated damages. She ordered the defendants to refund to the plaintiffs the deposit of $5,000 and pay them another $22,800 after which the plaintiffs would not be entitled to any other reliefs whatsoever under the agreement and their action would be dismissed.

The plaintiffs appealed against the decision of the learned assistant registrar praying for it to be reversed. The defendants filed a cross appeal asking for a reversal of her decision only in so far as she should have made a declaration that the agreement was frustrated.

The appeals came up for hearing before me whereupon I dismissed both appeals with costs. The plaintiffs have appealed against my decision.

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