V Damodharan Pillai v Chen Yock Siong and Another

JurisdictionSingapore
JudgeMPH Rubin J
Judgment Date03 December 1996
Neutral Citation[1996] SGHC 278
Docket NumberSuit No 2161 of 1995
Date03 December 1996
Year1996
Published date19 September 2003
Plaintiff CounselRavindra Samuel and R Kalamohan (Niru & Co)
Citation[1996] SGHC 278
Defendant CounselTan Cheng Han and Thio Shen Yi (Drew & Napier)
CourtHigh Court (Singapore)
Subject MatterExpress terms,Whether plaintiff could repudiate without giving 21-day notice,Contractual terms,Time for completion subject to Law Society's Conditions of Sale and obtaining of TOP,Defendant unable to complete on time,Sale of land,Plaintiff repudiated contract,Whether time for completion of the essence,Whether time was of the essence,Contract,Land,Sale of property under Law Society's Conditions of Sale and subject to obtaining TOP,Conditions of sale
Synopsis

On or about 16 June 1995, the defendants, the owners of the premises known as 28 Buffalo Road, Singapore, (the property) in consideration of an option fee of $33,000 paid by the plaintiff, granted to the latter or his nominees an option to purchase the property for S$1,650,000 on the terms and conditions set out in the said option.

The option was duly exercised by the plaintiff on 30 June 1995 with the tender of the requisite payment (ie, $132,000 being the balance of 10% of the purchase price after deducting the option fee which was earlier paid).
Under the terms of the option the completion of the sale was to take place on or before three months from the date of the exercise of the said option or two weeks from the date of notification of an approval from the Urban Redevelopment Authority (URA) or of the issuance of a temporary occupation permit (TOP) whichever was the later. This meant that in the normal course of events, barring the contingency in relation to URA approval and the issuance of the TOP, the sale was due for completion on 30 September 1995 - which was three months from 30 June 1995, the date on which the option was exercised.

As it turned out, the defendants were unable to obtain the TOP by 30 September 1995 and in the result the plaintiff purported to rescind the agreement and demanded repayment of the 10% deposit from the defendants.
The defendants refused and hence this action.

Issues and arguments

A broad issue in this case was whether under the terms of the contract between the parties, ie the duly exercised option, the defendants/vendors were bound to complete the sale on or before 30 September 1995. An allied question that sprang from the foregoing issue was whether time was of the essence in relation to the issuance of the TOP in the overall context as well as within the express provisions of the option document.

Clauses 2, 3, 6 and 7 of the contract hold the key to the resolution of the dispute in this case.
They provide as follows:

2 The sale is with vacant possession to be given on completion.

3 The sale and purchase is subject to `The Singapore Law Society`s Conditions of Sale 1994` so far as the same are applicable to a sale by private treaty and are not varied by or inconsistent with any of the terms herein contained.

6 The sale and purchase herein shall be subject to:

(i) the written consent of the Urban Redevelopment Authority (hereinafter called `URA`) being given to the sale and purchase of the property herein on or before completion. If the said consent is not obtained by the completion date, then the vendor and the purchaser may mutually agree to an interest free extension of two (2) months from the completion date. In the event that upon the expiry of the extended period of two (2) months, the written consent of the URA has still not been obtained, then the sale and purchase herein shall be deemed wholly cancelled and abortive and this agreement shall be rescinded and become null and void and of no further effect whatsoever. In such an event, the vendor shall forthwith refund to the purchaser the deposit of $33,000 (sic: q `$165,000`) paid by the purchaser but without any interest, compensation or deductions whatsoever and each party shall bear their own solicitors` costs in the matter and neither of the parties shall have any claim or demand against the other for damages, costs or otherwise whatsoever; and

(ii) the issuance of the temporary occupation permit (`TOP`) for the property on or before the completion date. If the TOP has not been issued on or before the completion date, then the vendor and the purchaser may mutually agree to an interest free extension of two (2) months from the completion date. In the event that upon the expiry of the extended period of two (2) months, the TOP has still not been obtained, then the sale and purchase herein shall be deemed wholly cancelled and abortive and this agreement shall be rescinded and become null and void and of no further effect whatsoever. In such an event, the vendor shall forthwith refund to the purchaser the deposit of $33,000.00 (sic: q `165,000`) paid by the purchaser but without any interest, compensation or deductions whatsoever and each party shall bear their own solicitors` costs in the matter and neither of the parties shall have any claim or demand against the other for damages, costs or otherwise whatsoever.

7 The sale shall be completed on or before three (3) months from the date of exercise of this option or two weeks from the last of the dates of notification of approval from the URA and/or date of issuance of the TOP referred to in cl 6 above whichever shall be the later date.



After learning that the TOP was not issued by the relevant authorities by 30 September 1995, the plaintiff by his letter dated 3 October 1995 (PB42) wrote to the defendants in the following terms:

...

I refer to the option dated 16th June 1995 granted by you to me.

I have been informed by our solicitors that the temporary occupation permit has not [been] issued as at the completion date of the purchase ie 30 September 1995.

Pursuant to cl 6(ii) of the said option, I do not agree to an extension of two (2) months from the completion date wherein to complete the above purchase.

I wish to exercise my right of recission (sic) of the option and hereby give you notice of the same.

Kindly return the deposit of $165,000 which I had paid to you within seven (7) days from the date hereof upon which the option shall be deemed null and void.

...

(signed V Damodharan)

...



Following the foregoing purported letter of rescission, parties met on 20 October 1995 to discuss the matter but were unable to resolve their differences.
In the event, the plaintiff advised the defendants by his letter dated 27 October 1995 (PB44) that he would agree to grant the defendants an extension until 30 November 1995 to complete the sale only if the defendants were to reduce the sale price by $50,000 or in the alternative to refund the deposit of $165,000 by 30 November 1995. He gave them five days to respond to the proposals. The defendants admittedly chose to ignore the plaintiff`s letter and the matter stood in abeyance for a brief period.

In the meantime, the TOP in respect of the property was issued by the relevant authorities on 20 November 1995 (PB45) and thereupon the defendants forwarded the same to Chong Yeo & Partners, the firm of solicitors then acting for both parties.
However, the plaintiff was unwilling to yield unless the sale price was reduced by $50,000. Consequently on 27 November 1995, the defendants informed the plaintiff in the following terms:

Chong Yeo & Partners [have] discharged themselves from the conveyancing of 28 Buffalo Road, Singapore.

As you know, we have provided the relevant documents to them on 20 November 1995. As such completion is to take place two weeks from 20 November 1995. However we understand that you do not wish to proceed. Please confirm.

(Signed Kwek Peck Ying)



On 30 November 1995, the plaintiff`s present solicitors Messrs Niru & Co, wrote to the defendants as follows:

We act for V Damodharan Pillai and have been handed your letter to him of 27 November 1995 with instructions to reply.

Our [client] disagrees with the contentions that you make in your letter. Completion was to take place on 30 September 1995. You were however unable to obtain the temporary occupation permit by this date as required by cl 6 of the option.

Our client has therefore rescinded the agreement. In view of your stand, our client has commenced legal proceedings against you for the recovery of the sum of S$165,000 you are wrongly withholding from him.

The writ of summons will be served on you [in] due course.

May we suggest that you appoint a firm of solicitors to act for you in this matter.



On 1 December 1995, the plaintiff filed the present action against the defendants for refund of the deposit sum of $165,000 on the ground that he had validly rescinded the contract.
The writ of summons however was not served on the defendants until 3 January 1996. In the meantime on 6 December 1995, before the service of the writ, the defendants` current solicitors wrote to the plaintiff`s solicitors stating that the plaintiff had wrongfully repudiated the contract and the defendants having accepted the said repudiation had forfeited the deposit of $165,000.

The plaintiff`s position in plain terms was that the appointed time of completion of the sale under the contract was 30 September 1995.
He maintained that as long as the TOP had not been issued by that date and in the absence of any agreement on his part to extend the time for completion, time became the essence of the contract and he was entitled to rescind the same by giving immediate notice, which he did on 3 October 1995.

The defendants, not surprisingly, took a contrary position.
They maintained that time was not of the essence in relation to the completion date and consequently the purported rescission was not only deemed invalid but a repudiation of the contract which, according to them, was accepted by their letter dated 6 December 1995.

Conclusion

It must be stated at the outset that the contract as drafted and...

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