Yeo Yoke Mui v Ng Liang Poh

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 29 June 1999
• Neutral Citation: [1999] SGCA 44
• Docket Number: Civil Appeal No 312 of 1998
• Date: 29 June 1999
• Year: 1999
• Published date: 19 September 2003
• Plaintiff Counsel: Howard Cashin and Lim Khoon (Lim Hua Yong & Co)
• Citation: [1999] SGCA 44
• Defendant Counsel: Woo Tchi Chu and Jinny Tan (Robert WH Wang & Woo)
• Court: Court of Appeal (Singapore)
• Subject Matter: Legal Profession,Whether solicitor's breach of duty causing loss to client,Breach,Professional conduct,Standard of care of a reasonably competent conveyancing lawyer

Judgment:

LP THEAN JA

(delivering the judgment of the court): This appeal concerns the claim by the appellant against the respondent, who at the material time was her solicitor, for damages for professional negligence in respect of the aborted sale and purchase of a property known as 93 Cashew Terrace (`the property`). The claim was dismissed by the court below, and the appellant now appeals against that decision.

2. The facts

The property which is at the centre of this dispute is a corner terrace house situated at the junction of Cashew Terrace and Cashew Road. It was owned at the material time by Kong Hoo (Private) Ltd (`Kong Hoo`).

3.On 11 March 1997, Kong Hoo in consideration of a sum of $19,600 granted to the appellant an option to purchase the property (`the option`). Prior to this, the appellant had viewed the property several times accompanied by her estate agent, Lee Keng Song (`Lee`), and Kong Hoo`s representative, Wong Wee Keong (`Wong`). Kong Hoo initially wanted $2m for the property. However, as the property was affected by a splay corner of 6 x 6 metres, which had to be set aside for road widening (`the splay corner`), the appellant negotiated for a reduction of the purchase price to $1,960,000. In view of this splay corner, Wong insisted that an additional clause, namely, cl 16, be inserted in the terms of the sale as contained in the option, which provided as follows:

Purchaser is fully aware of the road reserve shown on the PWD plan provided by the vendor.

During the negotiations, Wong showed the appellant a copy of a road interpretation plan relating to the property, but no copy of such plan was annexed to the option.

4.There were two terms of the option which were unclear. First, the option provided that the deposit of 10% of the purchase price less the option fee already paid (`the balance of the 10% deposit`) was to be paid to Kong Hoo`s solicitors, M/s Salehah & Co, who were authorised to acknowledge receipt of it, but this provision went on to say that the solicitors were authorised (i) to `hold the same as stakeholders pending completion of the sale` or (ii) to `release the same to [Kong Hoo] forthwith`. Secondly, cl 7 of the terms of the sale as contained in the option provided:

The property is sold with vacant possession to be delivered on completion/sold subject to existing tenancy.

5.After receipt of the option, the appellant instructed Lee to hand it to the respondent, as she intended to instruct the respondent to act for her in the purchase of the property. On 14 March 1997, Lee handed the option to the respondent, without any accompanying road interpretation plan, and the appellant instructed the respondent to act for her. The following day, the respondent wrote to the appellant informing her that he had received the option. In his letter, he alluded to the inclusion of cl 16 in the option, and stated that pending his perusal of the road interpretation plan, he was unable to comment on the extent of the road reserve disclosed to her.

6.The respondent applied to the Land Transport Authority for a road interpretation plan concerning the property and in due course received the plan with explanatory notes pertaining to it. The respondent on or about 26 March 1997 wrote to the appellant enclosing a copy of the road interpretation plan. In the letter, the respondent informed her that the property was `affected by Categories 4 and 5 Road Proposal` but did not say anything as to the extent to which the property would be so affected. There was a dispute as to whether in his letter of 26 March 1997 the respondent included the explanatory notes pertaining to the road interpretation plan. The appellant maintained that the explanatory notes were not enclosed in the respondent`s letter of 26 March 1997, whilst the respondent insisted that these notes were included in the letter. The trial judge found that such notes were included in the letter.

7.On 23 April 1997, the respondent, acting on the appellant`s instructions, wrote to M/s Salehah & Co seeking an extension of the deadline for exercising the option from 30 April 1997 to 3 May 1997. M/s Salehah & Co indicated that Kong Hoo would agree to this request provided the balance of the 10% deposit was released to the company immediately upon the exercise of the option. The respondent informed the appellant of M/s Salehah & Co`s reply in a letter dated 25 April 1997. He drew her attention to the ambiguity in the option as to how the balance of the 10% deposit was to be disposed of and asked for her instructions on Kong Hoo`s insistence that the money be paid to them directly. According to the appellant, she agreed to the condition laid down by Kong Hoo.

8.On 2 May 1997, the appellant went to the respondent`s office and signed the option. What occurred there at that time was in dispute. The respondent alleged that before the appellant signed the option, he reminded her of the existence and effect of the Categories 4 and 5 road reserves (`the road reserves`), and pointed out the uncertainty as to the treatment of the balance of the 10% deposit. The appellant, on the other hand, denied having received any such advice. The appellant signed the option and the respondent sent the completed option and the balance of the 10% deposit to M/s Salehah & Co. Thus a sale and purchase agreement was made between Kong Hoo and the appellant. In sending the option back to M/s Salehah & Co, the respondent did not stipulate in his letter that the money was to be held by M/s Salehah & Co as stakeholders pending completion. In due course, this sum was released to Kong Hoo.

9.Towards the end of May 1997, the appellant found out from her architect that the property was affected by Cashew Road being a Category 4 road, as a result of which a buffer zone of 7.6m between the building and the side of the road was required to be set aside, such that the proposed extension or redevelopment of that part of the house facing Cashew Road would not be approved. She then sent a facsimile message to the respondent on 28 May 1997 complaining that `no one informed` her about the Category 4 road and indicated her wish to `cancel` her purchase of the property. Accordingly, the respondent informed M/s Salehah & Co by a letter dated 30 May 1997 stating that the appellant was annulling the transaction on the ground that the property was affected by the road reserves and splay corner. M/s Salehah & Co replied that the appellant was fully aware that the property was affected by the splay corner and that Cashew Road is a Category 4 road, and therefore she was not entitled to annul the purchase of the property.

10.The appellant subsequently commenced proceedings against both Kong Hoo and the respondent. As against Kong Hoo, she sought a declaration that the agreement for the sale and purchase of the property had been rescinded, and an order that the 10% deposit be returned to her. As against the respondent, she claimed that the latter had been negligent in two respects, first, in failing to explain to her the effect and significance of the road reserves affecting the property, and, second, in failing to advise her of the risk involved in releasing the balance of the 10% deposit to Kong Hoo instead of having it held by M/s Salehah & Co as stakeholders pending completion. She asserted that if the implications of the road reserves had been explained to her, she would not have exercised the option as she had intended to buy the property with a view to redeveloping it, and that if she had been warned of the danger of releasing the balance of the 10% deposit to Kong Hoo upon the exercise of the option, she would not have agreed to M/s Salehah & Co`s release of that amount to Kong Hoo.

11. The decision below

In dealing with the claim of the appellant against Kong Hoo, the trial judge held that on the terms of the sale agreement as contained in the option and in the events that had occurred, the appellant was not entitled to annul the sale and purchase agreement. The learned judge therefore dismissed the appellant`s claim and allowed the counterclaim of Kong Hoo against her for damages for breach of contract. The appellant did not appeal against this part of the learned judge`s decision.

12.Turning to the claim of the appellant against the respondent, the learned judge considered first her complaint that the respondent did not advise her of the risk of releasing the balance of the 10% deposit to Kong Hoo. The learned judge was of the opinion that it was not clear from the sale agreement whether that amount was to be paid to Kong Hoo or to be held by their solicitors as stakeholders and that the respondent should have clarified that point on receipt of the option, which he did not. The learned judge appeared to be of the view that the respondent had failed to advise the appellant...