Woo Kah Wai and another v Chew Ai Hua Sandra and another appeal

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 01 August 2014
• Neutral Citation: [2014] SGCA 41
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeals Nos 83 and 84 of 2013
• Published date: 15 August 2014
• Year: 2014
• Hearing Date: 25 February 2014,12 March 2014
• Plaintiff Counsel: Edmund Kronenburg and Alicia Zhuang (Braddell Brothers LLP)
• Defendant Counsel: Christopher Anand Daniel and Harjean Kaur (instructed) and Lawrence Lim Cheng Hock (Matthew Chiong Partnership)
• Subject Matter: Contract,Contractual Terms,Breach,Formation,Land,Sale of Land
• Citation: [2014] SGCA 41

Chao Hick Tin JA (delivering the judgment of the court): Introduction

These two related appeals, Civil Appeal No 83 of 2013 (“CA 83/2013”) and Civil Appeal No 84 of 2013 (“CA 84/2013”), arise from the High Court’s decision in Chew Ai Hua Sandra v Woo Kah Wai and another (Chesney Real Estate Pte Ltd, third party) [2013] 3 SLR 1088 (“the Judgment”) concerning the legal effect of a written offer to purchase a unit in a condominium (“the Property”). Enclosed with this written offer (“the Written Offer”) was a cheque for 1% of the offer price as the money for the joint owners of the Property, Mr Woo Kah Wai (“Mr Woo”) and Mdm Lum Pic Yee Joyce (“Mdm Lum”), to issue an option to purchase (“OTP”) to the interested purchaser, Mdm Chew Ai Hua Sandra (“the Purchaser”). Mr Woo and Mdm Lum (collectively referred to hereafter as “the Vendors”), who were the defendants in the action below (“the Originating Suit”), are the appellants in CA 83/2013 and the respondents in CA 84/2013. The Purchaser, who was the plaintiff in the Originating Suit, is the respondent in CA 83/2013 and the appellant in CA 84/2013.

The heart of the dispute relates to the question of whether, in the events which occurred, the Vendors evinced an intention to accept the Written Offer, such that what we shall hereafter term “the Pre-Option Contract” – ie, a contract between the Vendors and the Purchaser under which the Vendors were to issue to the Purchaser an OTP which complied with the terms set out in the Written Offer (referred to in this judgment as a “compliant OTP” where appropriate to the context) – came into being. If the Pre-Option Contract did indeed come into being, the secondary issue is whether the option period (ie, the period of time during which an OTP is open for acceptance) stipulated in the OTP eventually issued by the Vendors (“the Option”) was in compliance with the terms of the Pre-Option Contract.

In view of the diametrically different positions taken by the parties in relation to the construction of the Written Offer, the sale and purchase of the Property did not materialise. This led the Purchaser to commence the Originating Suit against the Vendors for specific performance or, alternatively, damages for breach of the Pre-Option Contract. However, in the meantime, the Vendors had already sold the Property to an innocent third party at a higher price.

CA 83/2013 is the Vendors’ appeal against the main ruling of the Judicial Commissioner (“the Judge”) that they were in breach of the Pre-Option Contract, while CA 84/2013 is the Purchaser’s appeal against certain other rulings by the Judge.

Background facts The Purchaser’s offer to purchase the Property

Unless otherwise stated, all the dates referred to in this judgment are dates in 2010. In January, the Vendors decided to sell the Property and engaged the services of a real estate agency (“Chesney”) to assist in the sale. On or about 9 February, the Purchaser was informed by her estate agent, one Adrian Thoo (“Adrian”), that the Property was on sale. The Purchaser offered to buy the Property at the price of $920,000. This offer was conveyed by Adrian to Cindy Lim (“Cindy”), a director of Chesney, who in turn conveyed the offer to the Vendors. The Vendors were agreeable, and this information was conveyed by Cindy to Adrian.

Adrian then, in accordance with his understanding with Cindy, proceeded to prepare the Written Offer, and had it signed by the Purchaser. Dated 10 February, the operative part of the Written Offer reads:¹

We the undersigned hereby offer to purchase [the Property] … at the purchase price of S$920,000/- … subject to the following terms and conditions:

1. Option Period: 3 days 2. Completion Period: 12 weeks 3. The sale of [the Property] is subject to signing the Option to Purchase. 4. Within three (3) Days (i.e. by 4p.m. 13th February 2010), the Owner of [the Property] must either accept or reject this offer failing which this offer shall lapse. If rejected, the option money tendered herewith will be refunded to us within the time stipulated above without any interest thereon and thereafter neither party shall have any claim against each other. If accepted, the Owner shall deliver to the undersigned the Option duly signed by the Owner within the stipulated time above.

…

Enclosed herewith [cheque] for the amount of S$9,200/- … made payable to Woo Kah Wai … being Option money for the purchase of [the Property].

[underlining in original]

On 11 February, the Written Offer was handed by Adrian to Cindy’s personal assistant, one Masila binte Kamis (“Masila”), together with a cheque for $9,200, being the “Option money for the purchase of [the Property]” (“the Option Money”). On Cindy’s instructions, Masila then prepared a draft OTP to be issued by the Vendors. That draft was sent via e-mail to Mr Woo at 4.53pm on the same day (ie, 11 February).² Sometime after 5.00pm that day, Mr Woo went to Chesney’s office to sign the draft OTP (which then became the Option as defined at [2] above).

The key terms of the Option, which was dated 11 February, were the mode of acceptance and the option period.³ Essentially, to accept the Option, the Purchaser had to sign it and deliver it, together with 5% of the purchase price of $920,000 (less the Option Money), to the Vendors’ solicitor “on or before the 13th [of] February 2010, 4.00 p.m.”.⁴

Delivery of the Option to the Purchaser

It is undisputed that when Mr Woo went to Chesney’s office on 11 February to sign the draft OTP prepared by Masila, he also collected the cheque for the Option Money, which he deposited into his bank account that same evening. It was only at Chesney’s office that Mr Woo was told of the Written Offer, which he duly acknowledged and signed.⁵

It is also undisputed that Adrian went to Chesney’s office at around 6.00pm on 12 February to collect the Option, although the parties disagree as to the precise time at which Adrian was informed on that day that the Option was available for collection. (We should add here that only Adrian was informed when the Option was available for collection; the Purchaser herself was not notified.) On receiving the Option, Adrian noticed that it stated that the option period would expire at 4.00pm the following day (13 February), which happened to be a Saturday as well as the eve of the Chinese New Year holidays. Upon Masila’s attention being drawn to this, she arranged for Adrian to speak to Cindy. What happened after this point remains very much in controversy.

According to Adrian, when he pointed out to Masila that the option period of three days mentioned in the Written Offer (see [6] above) meant three working days, Masila admitted that the deadline specified in the Option was not in accordance with the terms set out in the Written Offer. This assertion was denied by Masila.

According to Cindy, Adrian admitted to her over the telephone that he made a mistake in specifying three days as the option period in the Written Offer and requested that it be changed to the industry norm of 14 days. Cindy said that she asked Adrian to leave the Option with Masila so that she (Cindy) could speak to the Vendors about the proposed amendment. Adrian agreed and the Option thus remained in Chesney’s office that evening (ie, the evening of 12 February).

On the same evening, Cindy telephoned Mdm Lum to inform her of the problem. According to Cindy, Mdm Lum said that she was agreeable to amending the option period to 14 days, but added that any agreement would have to wait until after she had discussed the matter with her husband, Mr Woo. Mdm Lum denied that that was what she told Cindy. Her evidence was that she only told Cindy that she and Mr Woo would consider the request.

A flurry of telephone calls took place between Cindy and Mdm Lum as well as between Adrian and Cindy at around 12.00 noon the following day (13 February), which was also the day on which the option period stipulated in the Option was due to expire. In summary, the different accounts adduced in evidence are as follows: Adrian claimed that at around 11.55am, Cindy informed him that although the Option would not be amended, the Vendors had agreed that it would be exercisable within three working days from the date on which it was delivered to him. The Vendors claimed that they informed Cindy that morning that they were not going to amend the Option. However, they offered to return the Option Money as a gesture of goodwill. Cindy subsequently called Mdm Lum to tell her that the Purchaser would try to beat the 4.00pm deadline for exercising the Option. Cindy claimed that Mdm Lum called and informed her that she could notify the Purchaser that the Vendors were not going to amend the Option. Upon Cindy’s inquiry as to whether the Vendors had already deposited the cheque for the Option Money, Mdm Lum replied in the affirmative. Cindy also claimed that Mdm Lum mentioned that although the cheque for the Option Money had already been banked in, she and Mr Woo were open to refunding the Option Money if it came down to that. However, Cindy did not regard that as something which Mdm Lum wanted her to convey to the Purchaser.⁶

There is also some controversy as to the precise time at which Adrian finally collected the Option (which was left unamended) on 13 February. Adrian claimed that he collected it from Masila at 3.00pm at a bus stop in Toa Payoh,⁷ while Masila averred that she handed it to Adrian at that bus stop shortly after 5.22pm.⁸ It is, however, undisputed that Adrian handed the Option to the Purchaser sometime after 6.00pm that day. Of course, by then, the deadline for exercising the Option had already expired (see [8] above).

The Purchaser’s attempted exercise of the Option

Over the next three days, 14 February being a Sunday as well as the first day of the Chinese New Year and 15 and 16 February being public holidays,...