Tay Theng Khoon and Another v Lee Kim Tah (Pte) Ltd

• Jurisdiction: Singapore
• Judge: L P Thean J
• Judgment Date: 27 March 1989
• Neutral Citation: [1989] SGHC 28
• Docket Number: Originating Summons No 347 of 1988
• Date: 27 March 1989
• Year: 1989
• Published date: 19 September 2003
• Plaintiff Counsel: Loo Choon Chiaw and Loo Choon Hiaw (Loo & Partners)
• Citation: [1989] SGHC 28
• Defendant Counsel: Kan Ting Chiu (Low Yeap & Co)
• Court: High Court (Singapore)
• Subject Matter: Land,Housing developers,Development,Property to be re-zoned for development,Sale of land,Conditions of sale,Subject to development charge,Whether purchaser entitled to rely on contractual clauses to withdraw from purchase,Property required to be re-zoned for development,Unsatisfactory replies to requisitions

Cur Adv Vult

The plaintiffs were at the material time the proprietors of a freehold property which consists of two contiguous lots of land marked on the government resurvey map as lots 414-63 and 414-64 of mukim XVII (the property). Lot 414-63 has an area of approximately 1,505.2sq m on which there is, or was at that time, a house known as No 24, Lorong Biawak, Singapore, and lot 414 is 64 a narrow strip of land fronting the road and has an area of 84.4sq m.

On 23 December 1987, by a document headed `Option` and addressed to one Tan Sim Guan (or nominee) the plaintiffs offered to sell the property at the price of $858,706 on terms and conditions therein set forth. A sum of $9,000 was paid to the plaintiffs as consideration for the offer, and by its express terms the offer was kept open for acceptance till 4pm on 13 January 1988 and was to be accepted by the offeree signing that portion thereof headed `Acceptance Copy` and delivering it together with 10% of the purchase price (less the sum of $9,000) to the solicitors for the plaintiffs. It was clearly intended by the plaintiffs that the benefit of the offer was assignable and that the offer was available for acceptance by an assignee of Tan Sim Guan (Tan). On 13 January 1988, prior to the time of expiry of the offer, the defendants, as the assignees of Tan, accepted the offer in accordance with the terms thereof. Thus, a valid and binding agreement (the agreement) for the sale and purchase of the property was made between the plaintiffs and the defendants on that date.

The agreement on the face of it appears to be simple and straightforward and is not a lengthy document; it incorporates The Singapore Law Society`s Conditions of Sale. However, there are three material terms thereof which unfortunately have led to the present litigation between the parties, and they are cll 5, 7 and 8 and are as follows:

5 The sale price shall be Singapore Dollars eight hundred and fifty-eight thousand seven hundred and six only (S$858,706). The purchaser shall not be entitled to any abatement of the sale price on account of any road-line, road reserve or other road proposal touching or affecting the property.

7 Subject to cl 5 hereof, the property is sold subject to the purchaser receiving satisfactory replies to all requisitions from the relevant competent authorities including that of the traffic manager Mass Rapid Transit Corp. If any such reply shall be unsatisfactory the purchaser shall have the right so long as they produce evidence thereof to the vendor to withdraw from the purchase in which case the vendor shall refund to the purchaser the deposit paid hereunder free of interest and thereupon this agreement shall absolutely cease and determine and be null and void and of no effect and neither party hereto shall have any claim whatsoever against the other provided always that no such reply shall be construed to be unsatisfactory if the property is affected by any notice under any statute which is capable of being complied with by and at the expense of the vendor so long as such notice shall have been served in respect of the property prior to the date of completion hereof nor shall the purchaser be entitled to withdraw from the purchase if the reply discloses that the property is not adversely affected by any drainage or other proposal of government and provided further that if no notice hereunder is received by the vendor from the purchaser within eight (8) weeks from the date hereof the purchaser shall be deemed to have received satisfactory replies and the purchaser shall not be entitled to withdraw from the purchase.

8 Notwithstanding anything herein, the purchaser shall be entitled to withdraw from this purchase if the government shall deny planning permission for the development of the property for residential purposes.

Prior to the issue of the offer there had been negotiations between the plaintiffs and one Clement Low who at the time was interested in purchasing the property. While the negotiations were in progress an application for the development of the property was submitted to the Development and Building Control Division (DBCD) of the Public Works Department, Ministry of National Development. That application was made in the names of the plaintiffs as the owners and of Clement Low as the prospective purchaser, and the layout plan for the proposed development was drawn by Clement Low`s architects, Messrs James Yip & Partners, who actually submitted the application to the DBCD. The proposed development was the construction on lot 414-63 of three units of two- storey terrace houses fronting Lorong Biawak and one unit of two-storey detached house at the rear. Subsequently, negotiations between the plaintiffs and Clement Low became abortive, and neither of them took any steps to withdraw the application. Hence, at the date when the agreement was made, that application was still pending before the DBCD. Following the making of the agreement and pursuant to a discussion with the solicitors for the defendants, the solicitors for the plaintiffs on 2 February 1988 informed DBCD of the sale of the property to the defendants and confirmed that the plaintiffs had no objection to the defendants submitting to DBCD their plans for development. However, on 5 February 1988, the solicitors for the plaintiffs wrote to the solicitors for the defendants stating, inter alia, the following with reference to the pending application:

We have today been contacted by a Miss Heng of the Development and Building Control Division, with regard to the (property). Apparently, the previous intending purchaser of the property had put in a set of plans for planning approval, prior to the expiry of the option. The option was eventually not executed and the sale was aborted. We have been informally advised that it may be quicker to await the outcome on that first application for planning permission, and if in principle approval is given, to subsequently put in your clients` final plans, rather than to now put in your clients` initial plans, as much time will be wasted in the Development and Building Control Division having to consider in-principle approval from scratch.

In response, the defendants` solicitors, by their letter of 13 February 1988, agreed that the application should be proceeded with and sought an extension of time for completion of the purchase, as it was apprehended that approval of the application might not be forthcoming within the time fixed for completion. The defendants in effect, b, that letter of their solicitors, agreed to accept that application which was then pending before DBCD. On the sun day of 13 February the solicitors for the plaintiffs wrote again to the solicitors for the defendants informing them that they had learnt from DBCD that `in-principle planning permission for the development of the property for residential purposes` had been given and suggested that the defendants might wish to proceed with the lodgement of final plans for development. The approval in principle, in fact, was given by DBCD on 15 February 1988 as evidenced by their letter of that date written to Messrs James Yip & Partners. The approval, however, is subject to six conditions, one of which is as follows:

Re-zoning of the portion of the site within public open space to residential zone together with payment of the requisite development charge.

On the same day of 15 February 1988, the defendants, solicitors wrote to the plaintiffs` solicitors stating that they (the defendants` solicitors) had received:

(i) from the Public Works Department, a road interpretation plan showing that the property, ie the whole of lot 414-64 and a part of lot 414-63, would be affected by road improvement; and

(ii) from DBCD a reply to their requisition showing that part of the property was zoned public open space and therefore not available (for development) for residential purposes.

These replies to the requisitions, they said, were unsatisfactory, and on behalf of the defendants they invoked cl 7 of the agreement and gave notice that the defendants reserved their right to withdraw from the purchase. Subsequently, by a letter dated 4 March 1988 written to the plaintiffs` solicitors, they confirmed the defendants` withdrawal from the purchase of the property.

Soon thereafter, negotiations presumably took place between the plaintiffs and the defendants with the view to resolving the differences, but unfortunately they were unsuccessful. In consequence, the plaintiffs took out this originating summons claiming various reliefs against the defendants and the claim is resisted by the defendants At the hearing before me the defendants raised a further defence to the claim. They invoked cl 8 of the agreement and maintained that they were entitled to withdraw from the purchase of the property on the ground that the government had refused planning permission for development of the property for residential purposes. There are, therefore, two main issues before me, namely:

(i) whether by reason of the road interpretation plan and/or the reply from DBCD on zoning, the defendants were entitled under cl 7 of the agreement to withdraw from the purchase of the property; and

(ii) whether there has been a denial or refusal by the government of planning permission for development of the property for residential purposes so as to entitle the defendants under cl 8 of the agreement to withdraw from the purchase.

In connection...