Woo Kah Wai v Chew Ai Hua Sandra

CourtCourt of Appeal (Singapore)
Judgment Date01 August 2014
Docket NumberCivil Appeals Nos 83 and 84 of 2013
Date01 August 2014
Woo Kah Wai and another
Plaintiff
and
Chew Ai Hua Sandra and another appeal
Defendant

Sundaresh Menon CJ

,

Chao Hick Tin JA

and

Andrew Phang Boon Leong JA

Civil Appeals Nos 83 and 84 of 2013

Court of Appeal

Contract—Contractual terms—Formation—Breach—Whether offer to purchase option to purchase legally enforceable—Whether contract to grant option to purchase was formed—Whether issuance of option to purchase on terms not compliant with contract to grant option to purchase amounted to breach of contract to grant option to purchase

Land—Sale of land—Whether there was concluded contract to grant option to purchase which was breached and if so what remedies were available to purchaser

The two appeals related to a sale and purchase of a unit in a condominium (‘the Property’). The purchaser (‘the Purchaser’) made a written offer (‘the Written Offer’) to the Vendors (‘the Vendors’) with the aim of purchasing the Property. The Written Offer dated 10 February 2010 provided a number of terms and conditions, one of which was that the option period was to be ‘three days’. There was a section in the Written Offer for the Vendors to indicate their acceptance or rejection.

The Written Offer was handed over by the Purchaser's estate agent to the Vendors' estate agent on 11 February 2010 together with a cheque for $9,200 being the 1% option money (‘the Option Money’). An option to purchase, prepared by the Vendors' estate agent, was dated and signed by Mr Woo, one of the Vendors, on 11 February 2010 (‘the Option’). Mr Woo also acknowledged on the Written Offer that he had collected the Option Money. He banked in the cheque on the same day.

The exercise date stated in the Option (the last date for exercising the Option) was on or before 13 February 2010, at 4.00 pm. When the Purchaser's estate agent went to collect the Option on 12 February 2010, he told the Vendors' estate agent that there was a mistake because the exercise period was too short. The Option was left with the Vendors' estate agent that night in the hope that the Vendors would agree to amend the exercise period.

On 13 February 2010, the Vendors' estate agent informed the Purchaser's estate agent that the Vendors were not agreeable to amending the Option. By the time the Purchaser's estate agent finally collected the Option that day and handed it to the Purchaser on 13 February 2010, the time for exercising the Option had already expired. The next three days were a Sunday followed by two public holidays. On 17 February 2010, the Purchaser and her estate agent tried, through their solicitor, to exercise the Option but were unable to do so as the Vendors' solicitor's firm was closed. Another attempt to exercise the Option was made on 18 February 2010 but this was rejected by the Vendors' solicitor on the ground that the Option had already expired. Correspondence was exchanged between the two sets of solicitors. Unbeknownst to the Purchaser, the Vendors sold the Property to a third party for a higher price in July 2010.

The Purchaser then commenced these proceedings in June 2011 seeking specific performance of the sale of the Property or alternatively damages for breach of contract as well as misrepresentation. As regards the breach of contract claim, the Purchaser's case was that the Vendors had, by accepting the Written Offer, agreed to provide an option to purchase which had an option period of ‘three working days’ from the date the option to purchase was given to the Purchaser's estate agent (‘the Pre-Option Contract’). The claim for misrepresentation arose out of the Purchaser's estate agent's allegation that the Vendors' estate agent had represented that the Option would be open for acceptance for ‘three working days’ from 13 February 2010 (‘the Representation’). In other words, the last date for exercising the Option ought to have been 19 February 2010.

The Vendors denied that they had accepted the Written Offer, or that a Pre-Option Contract had been formed, or that by stipulating that the Option was to be exercised by 13 February 2010, they had breached the Pre-Option Contract. The Vendors also denied making the Representation.

In the High Court, the learned judge (‘the Judge’) decided, in the main, in favour of the Purchaser. He held that the Written Offer was accepted by the Vendors; it therefore followed that the Pre-Option Contract was formed. However, the Judge held that the option period referred to in the Written Offer meant three calendar days, not three working days. On that basis, and given that the Option was made available to the Purchaser's estate agent on 12 February 2010, the Pre-Contract Option required the Vendors to grant an Option that was open for acceptance or exercise until 15 February, not 13 February 2010. As such, the Vendors in issuing the Option expressed to be exercisable until 13 February 2010 were in breach of the Pre-Option Contract.

As for remedies, the Judge held that specific performance of the sale was inappropriate now as the Property was in the hands of an innocent third party. Hence, the Purchaser was only entitled to damages and for that the Judge ordered a separate assessment. The Judge also ordered the Vendors to return to the Purchaser the Option Money. Both sides appealed various portions of the Judge's decision.

Held, dismissing both appeals:

(1) The Written Offer was an offer to acquire an option to purchase the Property on certain specified terms which was capable of acceptance: at [51] .

(2) On the evidence, the Vendors accepted the Purchaser's Written Offer. First, after the Vendors had orally agreed to the indicated price, their estate agent instructed the Purchaser's estate agent to prepare the Written Offer. Second, the Option was then prepared by the Vendors' estate agent after the Written Offer was presented to them by the Purchaser's estate agent; indeed, the terms of the Option was admitted to be ‘based on’ the Written Offer. Third, although Mr Woo thought that the option expiry date of 13 February 2010 was unusually short, he signed the Option, accepted and banked in the Option Money, and signed on the portion of the Written Offer to acknowledge that he had accepted the Option Money. If the Vendors had wished to introduce terms that were new or different from those of the Written Offer into the option that they were going to issue, they should have rejected the Written Offer by signing the rejection portion or simply returned the Written Offer unsigned together with the cheque for the Option Money: at [58] to [62] .

(3) In principle and in general, a contract to grant an option to purchase a property on certain specified terms would be enforceable as long as the requirements for an enforceable contract were present. Letters setting out offers to purchase a property on certain terms such as the Written Offer could be motivated by an intention to create legal relations: at [73] to [78] , [87] and [88] .

(4) The terms of the Written Offer were not ambiguous. Consequently, there was no uncertainty over the terms of the Pre-Option Contract. Specifically, the Judge was right in interpreting ‘three days’ in the Written Offer as referring to three calendar days: at [80] to [84] .

(5) The Option Money paid by the Purchaser to the Vendors was consideration for the Pre-Option Contract as much as for the Option because the Pre-Option Contract was so inseparably linked to the grant of the Option that the entire transaction had to be viewed as a continuum: at [96] and [97] .

(6) As the Option was made available for collection on 12 February 2010, the Purchaser effectively only had one day to exercise the Option. This was inconsistent with the three-day option period requirement in the Pre-Option Contract. To comply with that three-day requirement, the Option should have been expressed to be valid until 15 February 2010. For the purpose of reckoning the number of days, save where it was expressly provided, it would be generally incorrect to include the first day. Hence, by issuing the Option which expired on 13 February and which gave the Purchaser only one day instead of three days to exercise the Option, the Vendors had breached their obligations under the Pre-Option Contract: at [101] to [105] .

(7) The Judge was right to find that the Representation was not made: at [120] and [121] .

(8) Damages to the Purchaser should be assessed by reference to the difference between the contract price and the market value of the Property as at the putative date of completion, as the Judge had held, as the Purchaser's expectation loss was necessarily the differential value which the Purchaser had lost as a result of her inability to exercise the Option at the putative completion date. Adopting the date of judgment to ascertain damages would not be justified as the Vendors' failure to inform the Purchaser that they had intended to sell the Property in July 2010 was not objectionable, particularly since the Purchaser could have but did not lodge a caveat against the Property and all correspondence had ceased for some time prior to the sale: at [134] to [137] .

[Observation: In the present case, the Written Offer did not provide what was to be the sum payable on the exercise of the Option; accordingly, it might be said that there was no such agreed sum in the Pre-Option Contract. In the absence of such a term, a question might be raised as to whether there could be a valid and enforceable contract to grant an option to purchase (ie, the Pre-Option Contract) in view of this incompleteness. However, as this issue was neither pleaded nor raised to allow it to be canvassed now might cause unfair prejudice to the Purchaser: at [139] to [144] .]

Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd [2013] 4 SLR 409 (refd)

Beckkett Pte Ltd v Deutsche Bank AG [2009] 3 SLR (R) 452; [2009] 3 SLR 452 (refd)

Chai Cher Watt v SDL Technologies Pte Ltd [2012]...

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    ...modern approach in contract law is for courts to be more ready to find the existence of consideration: Woo Kah Wai v Chew Ai Hua Sandra [2014] 4 SLR 166 at [97], citing Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 and Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2 ......
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    ...had elected to affirm the contract in spite of any purported breach (see Woo Kah Wai and another v Chew Ai Hua Sandra and another appeal [2014] 4 SLR 166 at [113]–[114] and Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd [2013] 4 SLR 409 at [41]–[42] on the doctrine of waiver by electi......
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    ...907; [2008] 4 SLR 907 (folld) Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (refd) Woo Kah Wai v Chew Ai Hua Sandra [2014] 4 SLR 166 (folld) Ramachandran Doraisamy Raghunath and Lee Weiming Andrew (Selvam LLC) for the defendant. [Editorial note: The defendant’s appeal to......
  • Ong Keh Choo v Paul Huntington Bernardo and another
    • Singapore
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    ...with the terms of a document he is accepting. The Respondents relied on Woo Kah Wai and another v Chew Ai Hua Sandra and another appeal [2014] 4 SLR 166 (“Woo Kah Wai”) when the Court of Appeal said at [68] that in a normal scenario, a vendor is free to stipulate any term that he likes in a......
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5 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2015, December 2015
    • 1 Diciembre 2015
    ...The learned judge's focus on the contractual language is in line with the Court of Appeal's approach in Woo Kah Wai v Chew Ai Hua Sandra[2014] 4 SLR 166 (noted in Alvin W-L See, ‘Contract for the Grant of a Compliant Option to Purchase’[2015] Sing JLS 241 and discussed in (2014) 15 SAL Ann ......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2016, December 2016
    • 1 Diciembre 2016
    ...Leong gen ed) (Academy Publishing, 2012) at paras 4.059–4.060. 12 [2009] 2 SLR(R) 332 at [117]. 13 See Woo Kah Wai v Chew Ai Hua Sandra [2014] 4 SLR 166 at [97]. 14 See, eg, Gay Choon Ing v Loh Sze Ti Terence Peter [2009] 2 SLR(R) 332 at [72]; Hongkong & Shanghai Banking Corp Ltd v Jurong E......
  • Land Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2014, December 2014
    • 1 Diciembre 2014
    ...at 446449, paras 20.8020.90. Conveyancing Whether contract existed to grant option to purchase 20.60 In Woo Kah Wai v Chew Ai Hua Sandra[2014] 4 SLR 166, the Court of Appeal had to consider, inter alia, whether a pre-option contract came into existence and if so, whether the option period w......
  • Securities and Financial Services Regulation
    • Singapore
    • Singapore Academy of Law Annual Review No. 2020, December 2020
    • 1 Diciembre 2020
    ...in Singapore (Andrew Phang Boon Leong gen ed) (Academy Publishing, 2012) at pp 193–196. See also Woo Kah Wai v Chew Ai Hua Sandra [2014] 4 SLR 166, which extends the concept of consideration in multiple sales and purchase contracts where the same consideration suffices for different promise......
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