[1998] SGHC 129

In the High Court of the Republic of Singapore

[1998] SGHC 129

OS 1399/1997, 153/1998

Between

Coastland Properties Pte Ltd

… Plaintiff

And

Ho San Kong Hoey and another action

… Defendant

grounds of decision

Contract — Breach; Land — Caveats

This judgment is subject to final editorial corrections approved by the court and/or redaction pursuant to the publisher’s duty in compliance with the law, for publication in LawNet and/or the Singapore Law Reports.

Coastland Properties Pte Ltd v Ho San Kong Hoey and another action

[1998] SGHC 129

OS 1399/1997, 153/1998
Christopher Lau JC
21 April 1998

1 CHRISTOPHER LAU JC

4 2.2. The option was duly exercised by the plaintiffs on 10 July 1997 by payment of the sum of S$882,000, being the balance of the 10% deposit.

5 2.3. Clause 6 of the contract provided as follows:

The title to the property shall be properly deduced and free from encumbrances. The purchaser shall not investigate into or call for evidence of any earlier title or require the production or delivery of any deeds or documents not in the vendor`s possession nor make any requisitions or objections whatsoever in reference thereto.

6 2.4. Clause 11 of the contract further provided:

The sale is subject to `The Singapore Law Society`s Conditions of Sale 1994` in so far as the same are applicable to a sale by private treaty and are not varied by or inconsistent with the conditions herewith.

7 2.5. Condition 29(3) of the Law Society`s Conditions of Sale 1994 provided:

Upon service of an effective notice pursuant to the preceding clause it shall be an express term of the contract that the party to whom the notice is given shall complete the transaction within twenty-one days after the day of service of the notice (excluding the day of service) and in respect of such period time shall be of the essence of the contract but without prejudice to any intermediate right of rescission by either party. [Emphasis added.]

8 2.6. By a letter dated 30 June 1997, the plaintiffs` solicitors requested for the defendants` confirmation that all caveats lodged against the property would be withdrawn or removed on completion.

9 2.7. The contract was scheduled to be completed on 16 October 1997.

10 2.8. On the date of completion, there were two caveats subsisting on the property, namely, caveat at Vol 2589 No 192 by RMC Investment Pte Ltd (whose solicitors are M/s Tan Kim Seng & Partners) and caveat at Vol 2664 No 25 by Chng Chai Lan (whose solicitors are M/s Lee & Lee).

11 2.9. By a letter dated 21 October 1997, the plaintiffs` solicitors agreed to give reasonable time to enable the defendants to remove the caveats.

12 2.10. On 27 October 1997, caveat Vol 2589 No 192 by RMC Investment Pte Ltd was removed by their solicitors.

13 2.11. By a letter dated 27 October 1997, the defendants` solicitors wrote to M/s Lee & Lee requesting the removal of the caveat Vol 2664 No 25 by Chng Chai Lan (the caveat).

14 2.12. By 10 November 1997, the caveat was still not removed and there was no confirmation from the caveator that the caveat related only to the freehold reversionary interest.

15 2.13. On 10 November 1997, the plaintiffs served on the defendants a 21 days notice to complete.

16 2.14. On 15 November 1997, the defendants commenced legal proceedings in OS 1251/97 against Chng Chai Lan to remove the caveat. As of the date of the hearing the proceedings against Chng Chai Lan were still pending.

17 2.15. On 21 November 1997, the defendants also served on the plaintiffs a 21 days notice to complete.

18 2.16. On 2 December 1997, the plaintiffs` 21 days notice expired.

19 2.17. On 12 December 1997, the defendants` 21 days notice expired.

20 2.18. Upon the expiration of both 21 days notices to complete, the defendants failed to have the caveat removed and to deliver the property free from the caveat.

23 Huang Ching Hwee v Heng Kay Pay [1993] 1 SLR 100 , at p111:

The rule allowing a purchaser to rescind in the case of a defective title is based on an express or implied term in the contract of sale that the vendor has to show good title, that he is selling the property contracted to be sold free from encumbrances.

24 Contract and Conveyance (4th Ed) (at p 87) referred to the oft-cited test propounded by Wilberforce J in Re Stirrup`s Contract; Stirrup v Foel Agricultural Co-operative Society Ltd [1961] 1 WLR 449, at p 454 as follows:

The answer which lies to that is that what a purchaser is entitled to is to be satisfied that his vendor is seised of the estate which he is purporting to sell, in this case the fee simple, and that he is in the position, without the possibility of dispute or litigation, to pass that fee simple to the purchaser.

25 Re Trustees of Hollis` Hospital and Hague`s Contract [1899] 2 Ch 540, the purchaser sought a declaration that a good title had not been shown because of a reverter clause in the title deeds. Byrne J first held that the clause constituted a common law condition subsequent which was void for remoteness but because the point was `one of some obscurity and difficulty` and because `the purchaser, if he completes, will be in danger of immediate litigation` he concluded that the title was not such as ought to be forced upon an unwilling purchaser.

26 (ii). In Horton v Kurzke [1971] 1 WLR 769, where land had been sold with vacant possession, an agricultural grazing right tenancy had been claimed but eventually the claim was effectively rejected by an arbitrator. Before this rejection the vendor served a notice to complete. Goff J said (at p 772):

It is a fundamental part of a vendor`s obligation to prove his title, and the defendant is not, in my judgment, able to complete when she is not in a position to discharge that duty. Now, when she served the notice, and when it expired, the position was that there was an adverse claim to the property which was either a question of fact or of mixed law and fact, the facts being - apart from a matter which I shall mention later - within the knowledge of the defendant and the claimant to clear her title, either by a vendor and purchaser summons, or probably more aptly by awaiting the determination of the arbitration, but she chose to claim to be able to perform her contract without taking either of those courses, and in my judgment that was something she was not entitled to do and she did not bring herself within condition 22.

33 Re Heaysman`s and Tweedy`s Contract [1893] 69 LT 89 (at p 91):

It is a general principle that a purchaser ought not to be forced to accept a doubtful title or buy a law suit. In applying that principle, however, we must exercise our common sense, and see if the supposed law suit has any basis whatever. We must see if there is the slightest reasonable chance of any such law suit being instituted. If we come to the conclusion that the supposed law suit exist only in the imagination of the purchaser, we ought to disregard it, giving him the advantage of every reasonable doubt.

34 Horton v Kurzke (at p 773):

Here the vendor chose neither to have the matter determined so as to bind all parties by awaiting the result of the arbitration nor to have a vendor and purchaser summons as between herself and the purchaser, but said `You must buy a lawsuit. You must either comply with this notice without any protection if the claims turns out to be good, or you must refuse to comply with it at the risk of forfeiting your deposit if the claim turns out to be bad.` That in my judgment, was a position in which she was not entitled to put the plaintiff, and condition 22 did not help her to do so.

Christopher Lau JC

Lim Joon Toon (Cheong Hoh & Associates) for the plaintiffs
Low Chai Chong and Lauw Yaan Ching (Rodyk & Davidson) for the defendants