Teo Teo Lee and Another v Top Chance Properties Pte Ltd

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 22 December 2004
• Neutral Citation: [2004] SGHC 272
• Court: High Court (Singapore)
• Published date: 22 December 2004
• Year: 2004
• Plaintiff Counsel: Joan Lim Pheck Hoon (Chan Kam Foo and Associates)
• Defendant Counsel: Sham Sabnani and Chan Wei Meng (Drew and Napier LLC)
• Subject Matter: Land,Sale of land,Completion,Purchaser refused to complete,Vendor's summons filed by vendors,Statutory notice to complete subsequently served on purchaser,Whether leave should be granted to vendors to withdraw summons,Section 4 Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed),Contract,Property sold subject to tenancy,Tenant evinced intention to terminate tenancy prematurely,Whether vendors in breach of warranties in option to purchase property
• Citation: [2004] SGHC 272

22 December 2004

Choo Han Teck J:

1 The plaintiffs are the joint owners of a Housing and Development Board (“HDB”) shophouse known as Block 449 Ang Mo Kio Avenue 10 #01-1733. They granted an option to purchase dated 5 July 2004 to one Chua Hian Hee and/or his nominee. Unknown to the plaintiffs at that time, Chua was, in fact, the agent of the defendant. Nothing turned on this fact. The purchase price was agreed at $1,680,000. The option fee of $16,800 was paid directly to the plaintiffs. A further sum of $151,200 was being held by the plaintiffs’ solicitors as stakeholders.

2 The property was sold subject to tenancy. At the material time (5 July 2004), the property was tenanted to GK Departmental Store. A copy of the tenancy agreement between the plaintiffs and the tenant was annexed to the option to purchase. The relevant term of the option was cl 5, which reads as follows:

The Property is sold subject to tenancy and a copy of the Tenancy Agreement between the Vendor and GK Departmental Store (“Tenant”) dated 16 April 2004, (“Tenancy Agreement”) is attached hereto. The Vendor warrants that the Vendor and the Tenant are not in breach of any of the terms and conditions of the Tenancy Agreement, that no variation of the Tenancy Agreement has been entered into and that no rental rebate has been granted to the Tenant. On completion, the Vendor shall, at its own cost, assign in favour of the Purchaser, all the Vendor’s rights, title, benefits and interests under and in respect of the Tenancy Agreement and any renewal thereof, including all security deposits paid thereunder and shall furnish and deliver to the Purchaser the original duplicate stamped copies of the Tenancy Agreement and any renewal thereof duly executed by the Vendor and the Tenant.

3 The defendant exercised the option on 16 July 2004. The tenant defaulted in payment of rent for the month of September. The plaintiffs’ solicitors served a letter of demand dated 15 September 2004 on the tenant, who replied that it was unable to pay and asked if it could terminate the tenancy agreement. The plaintiffs notified the tenant of the sale to the defendant and suggested that it should seek the defendant’s consent for the intended premature termination. In my view, however, since the tenancy agreement expressly provided for the event of a premature termination, neither the consent of the plaintiff-vendor nor the defendant-purchaser was, in fact, required, but in the light of Chen Con-Ling Tony v Quay Properties Pte Ltd [2004] 2 SLR 181, it was probably a prudent thing to do although the facts here are different. In Chen’s case, there were conditions attached to the right to terminate. Hence, the landlord there was in a position to dispute the termination and on that basis, his views might differ from the views of the purchaser. Returning to the present case, the tenant contacted the defendant. The plaintiffs’ solicitors also notified the defendant’s solicitors by way of a letter dated 27 September 2004 informing them of the tenant’s intention to terminate the tenancy.

4 The defendant replied by a letter of 28 September 2004, alleging that the plaintiffs had breached cl 5 of the option to purchase and asked for a refund of the $168,000 deposit consisting of the option fee and stakeholding sum. The plaintiffs denied that they were in breach, and on 15 October 2004, their solicitors rendered the completion...