Yeo Brothers Co (Pte) Ltd v Atlas Properties (Pte) Ltd

• Jurisdiction: Singapore
• Judge: Lai Kew Chai J
• Judgment Date: 23 September 1987
• Neutral Citation: [1987] SGHC 38
• Docket Number: Originating Summons No 1178 of 1985
• Date: 23 September 1987
• Published date: 19 September 2003
• Year: 1987
• Plaintiff Counsel: Roderick E Martin and Teo Ching Leun (Ramdas & Wong)
• Citation: [1987] SGHC 38
• Defendant Counsel: Gordon Pollock QC and Richard Tan (Lee & Lee)
• Court: High Court (Singapore)
• Subject Matter: Whether shortfall substantial,Housing Developers (Control and Licensing) Act (Cap 130),Shortfall in area,Deficiency of 10.77%,cl 11 Singapore Law Society's Conditions of Sale,Conditions of sale,Housing Developers (Control and Licensing Act) (Cap 130),Whether substantial,Misdescription of area of flat purchased,Claim by purchasers for abatement in purchase price,Contract,Contractual terms,Land,Sale of land,Principles applied,Equity

Cur Adv Vult

In 1982 the defendants, who were duly licensed housing developers under the Housing Developers (Control and Licensing) Act (Cap 130) (hereinafter referred to as the Act), were developing for sale a residential condominium comprising two blocks of nine-storey apartments, three blocks of four-storey apartments and two blocks of four-storey maisonettes with certain communal facilities. The condominium estate was and is known as the `Goodluck Garden`. Titles to the individual residential units and the common property of the condominium were as in the ordinary way to be issued under the Land Titles (Strata) Act (Cap 158, 1985 Ed). By an agreement of sale and purchase dated 21 September 1982, which was in the statutorily prescribed form, the plaintiffs agreed to purchase a flat on the sixth storey `estimated to contain a floor area of 177.07 sq m (1,906 sq ft)`. On 13 March 1986, the Chief Surveyor approved the final survey plans of the condominium and the area of the flat was duly determined to be 158 sq m. There was therefore a shortfall in area of 19.07 sq m and the deficiency was 10.77%.

In September 1985, the defendants through their solicitors purported to give notice under the agreement for sale and purchase to the plaintiffs to complete the sale and purchase without offering compensation by way of an abatement in the purchase price. The plaintiffs declined to complete without an abatement in the price and they took out these originating summons for the following reliefs:

1 A Declaration that

(a) ... (since abandoned)

(b) The tender by the defendant to the plaintiff of a subsidiary strata certificate of title showing that the property as comprised therein contains a floor area of 158 sq m is a breach by the defendant of the agreement and the terms and conditions thereunder and the defendant is not entitled to oblige the plaintiff to complete the sale and purchase, alternatively the defendant shall be entitled to do so only upon the defendant giving the plaintiff

(i) an abatement in the purchase price amounting to $40,810.56 being compensation for the deficit in floor area such sum to be deducted from the balance of the purchase monies which would otherwise be payable to the defendant; and

(ii) a further abatement in the purchase price comprising a sum of $2,522.80 and the further sum of $95.23 for every calendar month from 1 October 1985 until the date of actual completion of the sale and purchase being reimbursement of the interest incurred alternatively lost by the plaintiff on the sum of $28,568.06, such abatement sum to be deducted from the balance of the purchase price monies which would otherwise be payable to the defendant.

It will therefore be noted that the declarations sought under para 1(b) are in two parts which are sought in the alternative; namely, that the defendants, as vendors, could not compel the plaintiffs, as purchasers, to complete the purchase since the shortfall in the area is substantial which in law and equity would disentitle the defendants to an order for specific performance or, alternatively, the defendants could not ask for specific performance without an offer of the compensation as stipulated if the shortfall is not substantial.

It should also be noted, and I stress, that in these proceedings, there is no suggestion that any misrepresentation, innocent or fraudulent, was made by the defendants, their servants or agents This is a case of misdescription and the effect of this particular misdescription is considered here, and no more. Misrepresentation, if asserted and borne out by the facts in other cases, will of course entail very different consequences in law.

Before I consider the submissions of learned counsel for both parties, I will set out the factual matrix and the relevant terms of the agreement of sale and purchase. In marketing the residential units, the defendants advertised the sales in newspapers in both Chinese and English. The prices of individual units were quoted in lump sums. Price lists were made available to interested parties and these mentioned that the floor areas as described were `approx gross area per unit (sf)`. There was no suggestion that any unit within the condominium was to be sold on a per square foot or per square metre basis.

On 26 August 1982 and in response to the advertisements of the defendants, the plaintiffs obtained from the defendants, again in the statutorily prescribed form, an option in writing to purchase at the price of $378,937.00 a flat which was then under construction and was briefly described as Unit No 06-03, 6th storey, Plot 2, Goodluck Garden, Singapore (which, as well as when built, is hereinafter referred to as the flat). The plaintiffs paid the booking fee which was 10% of the purchase price as consideration for the option. The option was issued in accordance with the statutory form pursuant to r 10B(1) of the Housing Developers Rules 1976. These 1976 Rules were revoked and replaced by the Housing Developers Rules 1985 with effect from 4 January 1985. The plaintiffs were also handed a document headed `Purchaser Form` of the same date and, in the description of the flat, it contained the statement `Estimated Floor Area: 1,906 sf`.

The plaintiffs duly exercised the option and on 21 September 1982 a sale and purchase agreement in Form B as statutorily prescribed under r 11(1) of the Housing Developers Rules 1976 was signed between the parties to these proceedings for the sale and purchase of the flat.

The relevant clauses and provisions of the sale and purchase agreement are as follows:

Clause 1

The Vendor shall sell and the Purchaser shall purchase free from encumbrances all that estate in perpetuity in part of the land comprising the flat described in the First Schedule hereto (hereinafter referred to as `the housing unit`) to be comprised in a Subsidiary Strata Certificate of Title under the provisions of the Land Titles (Strata) Act (Cap 277) being one of the strata units in the condominium project now being erected or erected by the Vendor upon the land described in the First Schedule hereto and known as Goodluck Garden (hereinafter known as the building project) subject to the following special conditions and to the Singapore Law Society Conditions of Sale 1981 as far as the name are applicable to a sale by private treaty and are not varied by or inconsistent with the special conditions herein. (Emphasis added.) ...

The first schedule above referred to all that

Flat on the 6th Storey of the Building known as Plot 2, Goodluck Garden now being erected or erected on part of the land in the District of Pandan in the Republic of Singapore estimated to contain a floor area of 177.07 sq m (1,906 sq ft) being part of the Government Resurvey Lot 1864 of Mukim V forming part of the land comprised in a Statutory Grant No 38771 which said housing unit is provisionally known as Unit No 06-03, Type A, 6th Storey, Plot 2, Goodluck Garden, Singapore. (Interposed here.)

...

Clause 8

(1) The housing unit and the building project together with all the common property thereto shall be constructed in a good and workmanlike manner in accordance with the specifications described in the Second Schedule hereto and in accordance with the plans approved by the Assistant Director, or other Competent Authority, which specifications and plans have been accepted and approved by the Purchaser as the Purchaser hereby acknowledges.

(2) No changes thereto or deviations therefrom shall be made without the consent of the Purchaser except as may be required by the Competent Authority or...