Professional Documents
Culture Documents
- Students are requested to print out copies of Forms B & D used by the Housing Developers for sale of
residential properties and bring them for the Conveyancing (4) & (5) Lecture. Students can get it from the
Housing Developers Rules through LawNet.)
Objectives
- Describe what a title search is
- Extract relevant information from a title search
- Explain why a title search is important
- Explain the significance of a solicitor’s undertaking for title deeds
- Explain how legal requisitions relate to title
When:
- Action happens at beginning when contract being negotiated – instructions – series of corresp bet vendor’s
sol and purchaser’s sol – agreement on terms of sale
- Searches – some at beginning and some along the way after contract concluded
- You should make a title search when you are instructed to act
- BUT … you must
• Get client’s consent first, especially if deal is not closed yet. – tell client why search needs to be
done
• Because if deal not closed deal may be aborted and client may turn around and bite you.
• Explain the importance of search and let client instruct you to make the search.
• Why? Money – if deal not closed yet and one aprty decides to walk away fr deal, clients
wnt to pay as little as possible, will not pay for the search. So must get consent first/ Avoids
resentment at having to pay abortive costs and search fees if deal falls through.
- Restrictive covenants
- Especially relevant if P intends to buy property for particular purpose e.g. to develop highrise block of
flats and restrictive covenant specifies that only detached house may be built on land.
- If such restrictive covenants are present and are against P’s wishes, must try to discharge them.
- If rights of easement over land exist, developer may have to plan development in such manner so as to
preserve rights of occupiers of dominant tenement(s). Would-be P should check to ensure that Planning
Department would allow such a development on the land
- other examples that that the conveyancer has to take note of
- if the property is the subject of a trust, require 2 trustees to give a valid receipt for the proceeds of
sale – Section 18 Trustees Act
- However for an exception see Wee Poh Neo’s case (1936) MLJ 266.
Facts:
The powers under which an executor sells for the purpose of paying debts & c, do not constitute "an immediate
binding trust for sale" within the meaning of the Trustees Ordinance.
If a sale is effected to produce funds to pay funeral or testamentary expenses or the debts of the deceased, then a
single executor may give a valid receipt. If the proceeds of sale are to be employed as capital moneys impressed
with the objects of the trust then they must be paid to no less than two trustees and no receipt given by only one
trustee will be a good discharge to a purchaser.
If a single executor purports in selling to be acting as such and to be selling for the purpose of paying the
testator`s debts or his funeral expenses, the purchaser is not put further on enquiry and is safe if he has no notice
that the vendor`s representations are untrue, at any rate during a period of six years after the testator`s death.
Re Tambi bin Osman, [1929] SSLR 186 considered and followed.
Held:
This is a vendor and purchaser`s summons taken out under the provisions of s 4 of the Conveyancing and Law of
Property Ordinance.
The declarations asked for in the summons are "that the requisition and objection in respect of the ability of the
said Wee Poh Neo to give a valid receipt for the proceeds of sale of the land and premises comprised in the
abovementioned contract of sale have been sufficiently answered by the applicant the vendor" and "that a good
title to the said land and premises has been shown in accordance with the particulars and conditions of sale
contained in the abovementioned contract."
An executor has always been regarded by the Courts of Equity as holding the property of the deceased in a
fiduciary capacity and as being in effect a trustee.
The primary duty of the executor is to realise so much of the assets of the deceased as will pay the debts and
funeral and testamentary expenses of that deceased. Thereafter he holds the property in trust for the beneficiaries
under the will.
….Now the first observation I have to make on these provisions, read together, is that the expressions "sole
trustee" and "sole personal representative" should not in my view ordinarily be used as meaning or including one
trustee surviving out of several or one executor who alone, out of two or more nominated by the testator, has
proved the will. "Sole trustee" and "sole personal representative" should ordinarily be taken to indicate only a
person in respect of whom the settlor or testator has expressed the wish that he shall alone carry out the trust
imposed upon the property in question.
I think, however, that the use of the word "sole" in the Ordinance must, in order to give effect to the intention of
the legislature, be construed as including a surviving trustee who has power to act or one of several executors
who alone has proved.
What then is the effect of the section? I think it is that no single trustee (including in that term an executor who
alone has proved) can receive monies which arise under a trust for sale and which then constitute capital monies
for the purposes of the trust.
If the sale is effected in order to produce funds with which to pay funeral or testamentary expenses or the debts
of the deceased then a single executor may give a valid receipt.
If the proceeds of the sale are themselves to be employed as capital money impressed with the objects of the trust
then those monies must not be paid to less than two trustees and no receipt given by only one trustee will be a
good discharge to the purchaser.
….
Although at first sight it might appear that the ordinary duties of executors are included in the trust itself I think
the true view is that the word "trustees" is merely descriptive and includes "executors," that the executors are to
carry out first their duties as executors, and that it is only afterwards that the residue of the testator`s property is
to be applied for the purposes of the trust.
In any case the sale of any part of the testator`s property in order to pay funeral and testamentary expenses and
debts would not produce "capital money" under the trust and could be properly considered as the exercise of the
duties of executors rather than of trustees under the trust.
What then is the position of the purchaser?
He calls for a probate copy of the will to ascertain its provisions in respect of the property to be sold. He
ascertains that probate has been registered in respect of the property in the Registry of Deeds but this tells him
very little.
The purchaser is not put further on enquiry. The Ordinance exonerates the purchaser from seeing to the
application of the purchase money, and as Warrington LJ said in Re Kemnal and Still`s Contract , [1923] 1 Ch at
p 310:- "It is well settled that no purchaser is liable to have his title called in question unless he has actual notice
of the impropriety of the transaction."
[268] If, therefore, a single executor purports, in selling to be acting as such and to be selling for the purpose of
paying the testator`s debts or his funeral and testamentary expenses, the purchaser is safe if he has no notice that
the vendor`s representations are untrue.
The result may be largely to vitiate the object the legislature. An executor remains an executor indefinitely, even
though he be also nominated under the will to be a trustee of trusts created by that will. A dishonest person who
is both executor and trustee under the will, by falsely alleging to an innocent purchaser that he is selling qua
executor, may therefore be enabled, at any rate during a period of six years after the testator`s death, to sell all the
trust property and to pocket the proceeds unimpeded by any necessity of abetment by a second trustee.
That, however, is the law as I understand it.
In the present case I was informed that the purchaser was satisfied that the sale was in fact being made in order to
provide for the payment of funeral and testamentary expenses and debts.
I therefore make the declarations and the order as to costs prayed for by the vendor.
- it is not sufficient to look at the RODA register and check that the names were correct; you should have to look
into the documents themselves
- Sometimes, the option may include a clause pertaining to title
- a title search may be essential for you to decide what clauses you want to incorporate in the option
- For uncompleted units, is project licensed/unlicensed?
- Your attention is drawn to Philip Hoalim’s Case (1977) 1 MLJ 88 (PC)
- Piece of land granted by state to A subject to term that land would be surrendered should require land for
public purpose
- Land sold from A to B 18 years later
- B sold it to C some 90 years later from time government land grant given
- Conveyance from A to B would constitute good root of title since no intervening dealing with land
- Issue: Whether C had to investigate into original land grant since AB conveyance had endorsed
government land grant?
- Held:
- Not bound by covenant in original land grant though he had constructive notice because AB
conveyance had identified land completely and perfectly ‘in a manner upon which no survey plan could
improve’
Facts:
This was an appeal from the decision of the Court of Appeal of Singapore ( [1975] 1 MLJ 231). The respondent
in this case owned an island off the coast of Singapore. The Collector of Land Revenue gave notice of
compulsory acquisition of the island for public purposes. The original Crown or state grant of the island to one
Angus in 1860 contained a provision enabling the State , if it should be required for public purposes, to reacquire
the island, paying therefor the latest purchase price plus any money that had been expended on the land by the
owner. The Collector of Land Revenue did not proceed under that provision but he set in motion the ordinary
processes of compulsory acquisition for public purposes. But in ascertaining what a notional purchaser in the
market would pay for the island it was relevant to consider whether the 1860 reacquisition provision was still
enforceable at the date of the publication of the notice of compulsory acquisition. The Appeals Board constituted
under the Land Acquisition Act stated a case for consideration by the Court of Appeal setting out a number of
questions of law upon which guidance was sought. On appeal to the Privy Council, three questions remained
outstanding for the determination by the Privy Council: (1) whether the Registration of Deeds Ordinance 1886,
which required registration of conveyances of land in default of which the document was (in broad terms) not to
be recognized by law, applied to all original state grants of land as distinct from subsequent assurances by
subjects; (2) whether the Court of Appeal was right in holding that the provision for reacquisition in the 1860
grant amounted not only to a covenant by Angus but also to a condition of the grant; (3) whether, if the provision
for reacquisition was of the nature of a covenant only conferring upon the State an equitable interest in the land,
the respondent had constructive notice thereof when he bought the land in 1951.
Holdings:
Held, allowing the appeal and cross-appeal:
(1).The Registration of Deeds Ordinance 1886 did not apply to a grant by the Crown (State ) of land in
Singapore. Non-registration will therefore not avail the respondent, who could only succeed in avoiding a
depressant effect on the market value of the land of the provision in the 1860 grant if (a) he was correct in saying
that the provision operated by way of covenant and not also by way of condition and (b) he purchased the land in
1951 without notice actual or constructive of the provision.
(2).The language of the 1860 grant was not such as to impose a condition. The provision therefore was a
covenant creating an equitable interest in the land and not also a condition.
(3).The respondent did not have constructive notice of the provision in the original Crown grant.
- Is property acquired by way of gift? (Possibility of triggering Section 8 Estate Duty Act and Sections 98 and
99 Bankruptcy Act)
1. P’s solicitors will get title deeds from V so that he can commence his own investigations on the title. But
before he can get them from the V, he has to give a Solicitor’s Undertaking
- The title deeds are sent on the usual undertaking “to return the same to us on demand without any claim or lien
thereon whatsoever”
- Practice Directions & Rulings 1989 p. 99-100 (Items 4 and 5)
o This very serious undertaking is usually affixed by way of a rubber stamp on the schedule of deeds
accompanying the title deeds.
Never put this only in a schedule – danger if title deeds lost
Also put on cover letter as well as Schedule
- How serious is breach?
o Very serious – Rule 51 of the Legal Profession (Professional Conduct) Rules states that an advocate
and solicitor shall honour the terms of a professional undertaking given to another advocate and
solicitor, a court of law, tribunal, client or any other person. (see page 145 to 148 of the Professional
Responsibility manual on “undertakings”).
o Therefore possible grounds for professional misconduct.
Solicitor’s Undertaking
- • After contract is concluded, title deeds are sent to Purchaser’s solicitor to enable investigation of title
o undertaking is serious matter – amounts to professional misconduct if breach it
o satisfy return on dd by imposing on bank’s sol the same undertaking – dd them ot return to you whch
you can then return to vendor’s solicitors. Make sure that you impose the same undertaking when you
sent docs to someone else!
- • What does this mean?
- • How serious is breach?
o Discip action by law society
o Cover letter – enclosing title deeds; pls acknowledge receipt by signing on schedule. Where is the
undertaking? Stimes other side may take letter but doesn’t return the schedule – so is he bound by
undertaking? You never took it back. Impt that other side acknowledges on something which has the
words of undertking on it!
o Be careful
2. P will then begin title search online or at the Singapore Land Authority
- STARS: Singapore Titles Automated Registration System (the computerized registration and public search
system of Singapore Land Registry)
• Search is by Lot and Mukim/ Town Subdivision numbers or address of property
• Searches of land register are definitive and if land registry makes errors state may pay damages
• Note that Mukim and Town Subdivisions are mutually exclusive. If the property has a Mukim number it
cannot have a Town Subdivision number and vice versa.
• Mukims are older parts of town. Lot number is the exact plot of land you are talking about. Identifier in
property is lot number and mukim number (cos they are fixed whereas addresses can change)
• Town subdivisions – closer part of town
- copies of Index of Lands shows transactions registered against property – often handwritten – only shows
transactions registered against the property
- Is it enough to look at the Index? – no. if checking title, resp goes beyond face of index of land
- Must investigate back at least 15yrs see CLPA for this reqt to check for good root of title. Either get orig
fr vendors or go and buy from the registry. (s.3(4) CLPA)
o “A purchaser of land shall not be entitled to require a title to be deduced for a period of more than 15
years or for a period extending further back than a grant or lease by the Crown or the State,
whichever period is the shorter.”
o Freehold land via deed of transfer, leasehold land via assignment
o Good title may not be perfect title but must be marketable title
o V’s solicitors under not general duty of disclosure but usually bound to answer Requisitions if
questions relate specifically to title and property unless contract provides otherwise
If question do not relate to title, then the V’s solicitors should be helpful and informative
wherever possible
V no duty to disclose any defects.. only bound to disclose any latent defect in title which are not
apparent upon inspection; as for patent defects, the burden if cast on P’s solicitors to conduct his
own investigations [Huang Chin Hwee v Heng Kay Pay]
Duty only extends to defects in title, not quality
• If non-disclosure relates to quality, there is no general duty to disclose and knowledge
is generally not material in the absence of misrep/ warranty/ other circumstances
• However, if the disclosure relates to title, the duty of V’s solicitor to disclose is
irrespective of knowledge
[Huang Chin Hwee v Heng Kay Pay]
- Read doc to establish chain of title & whether deeds are complete – impt to get every single doc perfect every
time transact. Make sure that A had power to cnvey and properly conveyed in that nothing was left out. If
small interest was left out or not accurately described, then title might be defective. If allow transaction to go
through, solicitor may be found negligent.
o Not always conveyance fr a to b – seller may be a legal rep; prev owner died (testator/deceased) =>
need ot call for will to make sure that property conveyed according to terms of will. Did he have
power to sell, or was it an assent? Must ensure that names are exactly correct
o Investigation of title does not only require you to make sure that 15 years ago, there was a
conveyance etc… have to ensure that there was no break in the chain of conveyance
o There can never be any break, the parties must be the same
E.g. when you have A, B selling to C, then E selling to F… then there is a break in the chain
Example given by lecturer: cannot have a situation when you transfer the land back to C
(deceased)… at common law, can only transfer to the estate of C… not C
Torrens/ LTA – Certificate of Title (“CT”), Subsidiary Strata Certificate of Title (“SSCT”) (for flats) or SCT
Section 25 LTA
Cautions and lapsing of cautions
25. —(1) Upon the creation of a qualified folio, the Registrar shall enter thereon a caution warning persons dealing
with the registered proprietor therein named that the land comprised therein is held subject to any interest which
affected it at the date of the creation of that folio, and so long as the caution remains on that folio that land shall be
so held.
(2) A caution recorded on any qualified folio (whether created under this Act or the repealed Land Titles Act
(Cap. 157, 1985 Ed.)) shall lapse in one of the following ways:
(a) if, after the creation of the qualified folio, a purchaser for valuable consideration and without fraud becomes
registered as proprietor of an estate or interest in the land comprised in the folio, the caution shall lapse as regards
the estate or interest on the expiration of 5 years after the date of the last deed which was cancelled by the Registrar
on the creation of the folio; or
(b) if, immediately before the expiration of 10 years after the creation of the qualified folio, the caution affecting
the folio has not lapsed as regards all estates and interests in the land comprised in the folio or has not been
cancelled, the caution shall lapse —
(i) on the expiration of that period; or
(ii) on the expiration of 24 months after 20th August 2001*,
whichever is the later.
*Date of commencement of section 8 of the Land Titles (Amendment) Act 2001 (Act 25 of 2001).
(3) A mortgagee or chargee shall not be regarded as a purchaser for the purposes of subsection (2).
(4) When a caution lapses under subsection (2), the lapsed caution shall constitute a defunct entry and the
Registrar shall, of his own motion or after the lodgment of an application in the approved form made by the
proprietor of the land, cause an entry to be made in respect of the lapsing of the caution.
(5) Upon the lapsing of a caution under subsection (2), the folio shall cease to be qualified and the land comprised
therein shall thenceforth be held subject only to such interests as are registered or notified on the folio and to such
interests as are otherwise excepted by section 46.
(6) Any person deprived of land by the operation of this section shall not by reason of that deprivation have any
claim against the assurance fund.
- Can make search of Torrens title from date of issue of CT, SSCT or SCT. Indefeasible title
o Section 46 Land Titles Act
o But only if unqualified
- If no caution as to title, unqualified title, no need for 15 years investigation of common law title.
o because the basis of the Torrens system is that the register is a mirror
- Under the RODA, registration does not validate an invalid conveyance or document [as per s14]
- However, under the Torrens System/ LTA, registration does validate an invalid document [per s46LTA]
- If qualified with a caution, must investigate common law title. How long? 15 years.
- Must investigate CL title as title subject to earlier CL title
- Look at caution endorsed on title deed. “Subject to any interest which may have affected the land at the date of
issue of the Certificate of the Title restrictions as follows …”
- you have to see whether the caution has lapsed, if it has then can forget it, cos Qualified title can become
indefeasible title by removal of caution (s46LTA)
o “purchaser” is very restricted, excludes chargee or mortgagee or fractional purchaser
o If purchase entire estate, caution deemed to lapse after 5 years (NA to fractional purchases)
s25(2) LTA:
In favour of any P of an entire estate/interest in any land registered, a caution entered lapses on expiration of 5
years from date of last conveyance which was cancelled by Registrar upon creation of qualified folio
- Land registers is manual in HDB – STARS elodgement system is for e-caveats (does not require of Certificate
of title). In contrast, for private property, you can perform an online search if you wish.
- Public search – impt – DIPS – admissible in court for purposes of evidence act
- Distinct from Requisitions on Title which are between Ls and for the purpose of seeking clarification about
title. Requisitions on Title will be dealt with in the notes on Lecture 8
- send legal requisitions and interpretation plans to the relevant government departments to ascertain whether
the property is in any way affected by any scheme or is subject to any encumbrance
- INTEREQ (Integrated Legal Requisition System)
o All legal requisitions must be sent electronically through Intereq (available through the Lawnet
Service Bureau), which facilitates the sending of legal requisitions and the receipt of replies from
government agencies. The relevant departments will not answer any requisition sent manually.
Replies can be expected in 4-6 weeks.
An example of an LR clause:
“If any reply to a legal requisition and/or interpretation plans are found to be unsatisfactory or if the
property is affected or may be affected by the MRT system or any roadline or any road or drainage
proposal or government acquisition or scheme or intended government acquisition or scheme then this
agreement may be rescinded at the buyer’s option…” (Lim Kim Lian v. Swee Eng Heng [1988]1 MLJ 277)
• LRs are questions sent to NINE government departments (please photostat page 54 to 58 of the Manual for
info as to what exactly are you asking for from each government department , and incorporate them with this
set of notes)
Look at pages 50 to 54 of your manual & state how the following affect the title/owner of a property
S6(1) Sewage & Drainage Act
S58 Environmental Public Health Act
S37 Building Control Act
Road Interpretation Plans esp impt for landed property; stimes raod buffer. Private vs public interest – sol to
check that buyers able to enjoy their property!
See cases where judges have held how much property taken up for road line is or is not satisfactory reply
(A) Public Utilities Board, Water Reclamation (Network) Department, Ministry of the Environment
- Sewerage Department provides information:
- S. 6(1) Sewerage and Drainage Act (Cap. 294) owner of property to construct or alter the sewerage
system
- SDA requiring the owner of any sewerage system to make a sufficient drain-line emptying into any
public sewer and to disconnect and demolish any sewerage system rendered useless or unnecessary
- Cause all sewage therefrom to be discharged into such sewerage system as directed
Premises not provided with adequate sewerage system
6. —(1) If it appears to the Director that any premises are not provided with an adequate sewerage
system, the Board may, by notice in writing, require the owner or occupier of the premises to construct
such sewerage system, or to make such alteration to the existing sewerage system as he considers
necessary.
[8/2001]
(2) The Board may, at any time by notice in writing, require the owner or occupier of any premises
served by any sewerage system to make a sufficient drain-line emptying into any public sewer and to
disconnect and demolish at his own expense any sewerage system rendered useless or unnecessary
thereby.
[8/2001]
(3) The Board may, by notice in writing, require the owner or occupier of any premises to cause all
sewage from that premises to be discharged into such sewerage system as it may direct.
- Maintenance fees: r. 3(1) Sewerage and Drainage (Sewage Treatment Plants) Regulations
Maintenance of private sewage treatment plants under section 8 of Act
3. —(1) A monthly fee according to the scale set out in the Schedule shall be payable to the Director for
the maintenance of a private sewage treatment plant under section 8 of the Act.
1
However, in Chang Seow Song v Fong Tat Motor Co. [1997] 3 SLR 539, the Court of Appeal overruled
the decision in Chu’s case which had held inter alia that “any reply from the competent authorities is a reply
to a requisition”. The Court of Appeal held that a response to a request for a copy of the road interpretation
plan by the LTA stating “the road interpretation plan for the site was not available” was NOT a “reply” to
the purchaser’s requisition or application for the road interpretation plan. A response which refused or did
not answer the question which was put by the requisition could not constitute a “reply”.
(B) National Environment Agency, Central Building Planning Unit, Ministry of the Environment
- National Environment Agency, Central Building Planning Unit, the Ministry of the Environment, show
whether the land is affected by a drainage reserve
(C) National Environment Agency, Environmental Health Department, Ministry of the Environment
- Ministry of the Environment
- Environmental Public Health Act (Cap. 95)
- S. 43 EPHA empowers Director-General of Public Health to “take such steps as he may consider
necessary to remove or abate all nuisances of a public nature”
Public nuisances to be abated
43. The Director-General may take such steps as he may consider necessary to remove or abate all
nuisances of a public nature and may, if he considers that the circumstances so warrant, proceed at law
against any person committing any such nuisance.
(E) Land Transport Authority Survey and Lands Department (Relating to Street Works)
- Land Transport Authority for information on streetworks
- Any outstanding charges under Street Works Act (Cap. 320A)
- Whether road giving access to property is a “public street”
(H) Land Transport Authority, Survey & Lands Department, (Relating to Rapid Transit System) (“LTA”)
- requisitions are sent to the LTA to check whether the property will be affected by MRT lines
- any Notices under Rapid Transit Systems Act (Cap. 263A)
- any notification in the Government Gazette
(I) For strata units, the 10th is sent to the Management Corporation to ask if any outstanding maintenance fees/
capital levies charged that client may have to pay. -> under Section 54(1)(c) of the Land Titles (Strata) Act. Ideal to
have certificate in before completion but usually it takes a while
Format
- a change of format in the Building and Construction Authority (BCA) Requisitions
- previously, the following questions were asked in the requisition form of BCA’s predecessor,
Development and Building Control Division (DBCD):
1. is the property affected by any approved road proposal?
2. Is the property affected by any approved backlane proposal?
3. Is the property affected by any approved drainage proposal?
- These questions have been omitted from the new forms
- In the light of the change, it is imperative to apply for the Road and Drainage Interpretation Plans in a
purchase/mortgage of property transaction as these applications for Interpretation Plans are now the
only sources which will provide the latest and most accurate information about road and drainage lines
and/or proposals affecting a property
Chang Seow Song v Fong Tat Motor Co Pte Ltd (1997) 3 SLR 539 (CA)
- overruled decision in Chu’s case which had held inter-alia that “any reply from the competent authorities is
a reply to a requisition”
- In Chang’s case the Court of Appeal held that LTA’s letter stating that “road interpretation plan for the above
site is not available” was not a reply to legal requisitions or application for road interpretation plan
- V granted option to X to purchase property subject to existing tenancies and subject to grant of written
permission
- Optioned assigned to P who duly exercised it
- Terms of option incorporated Sg Law Society’s Conditions of Sale
- Option also stated that any reply not received by P’s solicitors by completion date shall be deemed satisfactory
- P’s solicitors sent out usual requisitions to relevant authorities but did not then apply to LTA for copy of road
interpretation plan
- Only around 2 months later did they apply for road line affecting property to be plotted on general
interpretation plan, which was submitted together with application
- On same day, LTA returned general interpretation plan to P’s solicitors with road line unplotted with remarks
‘The road interpretation plan for the above site is not available’
- P’s solicitors immediately informed V’s solicitors of this and later purported to rescind option as no
satisfactory reply had been obtained from LTA
- V’s solicitors replied stating that reply from LTA was not and could not be deemed unsatisfactory and therefore
P not entitled to rescind contract
Held:
- When P exercised option, P did so with full knowledge of written permission and in particular the location and
site plan attached to it, which showed provisions for road reserves
- Also, P knew that he was purchasing net area of land available for re-development subject to written
permission which constituted purchase and sale agreement of property
- Whether, notwithstanding written permission, LTA would still have revised road line was another qn altogether
- Qn was whether it would be amply evident to ‘any reasonably determined purchaser’ that if LTA did
revise road lines from that shown in the location and site plan it would have been such a revision, if it affected
the property adversely, that could have been considered de minimis/marginal and would not have been a
valid reason to rescind contract
- LTA letter was not ‘reply’ to P’s requisition/application for road interpretation plan
- Response from authority requisitioned which refused to/did not answer qn put by requisition could not
be a ‘reply’ (overturning CHu Yik Man which stated that any reply fr competent auth is a reply to the
acquisition)
- LTA’s letter of 23 July 1996 stating that the road interpretation plan was not available was not a ‘reply’ to
FTM’s requisition or application for the road interpretation plan.
- Purpose of requisition was to get an answer which P’s solicitors would have considering in advising P whether
answer was/was not satisfactory
- Even if it was an answer to requisition, it could not be considered by a ‘reasonably determined purchaser’ that
‘not available’ could be considered ‘unsatisfactory’
- Since letter was not a ‘reply’ and since no reply was received by P’s solicitors from which it could have
been ascertained whether property was affected by road line and if so whether to a greater extent than that
shown in the location and site plan by completion date, reply was deemed satisfactory
- Hence P not entitled to rescind sale and purchase agreement
- Since the letter was not ‘a reply’ within the meaning of cl 10 of the option and since no reply was received by
FTM’s solicitors from which it could have been ascertained whether the property was affected by a road line
and if so whether to a greater extent than shown in the location and site plan by the completion date, para (d)
of cl 10 of the option operated and the reply was deemed satisfactory. Accordingly, FTM’s solicitors’ letter of
24 July 1996 purporting to rescind the sale and purchase agreement was of no effect and did not rescind the
agreement. The agreement was brought to an end by the operation of condition 29 of the Singapore Law
Society’s Conditions of Sale 1994 following the vendor’s service of notice to complete which the purchaser
failed to comply with.
Effectively overrules Chu Yik Man v S. Rajagopal which had held that ‘any reply from competent authorities
is a reply to a requisition’
So if do not answer, NOT a reply to a requisition
* Qn: Is it sufficient to state that purchase can be annulled so long as replies are ‘unsatisfactory’ to P/his
solicitors’?
Use of right was not to be arbitrary/without reason and court would not allow P to call off whole contract in
face of any of answers to requisitions to which P took what was merely a capricious/fanciful objection
Test would be that of a reasonably determined P and that whether a particular answer was satisfactory to such a
P was a qn of fact
(Narrow strip of property 2.55% being affected by proposal for road widening SATISFACTORY)
Peh Kwee Yong v Sinar (Co) Pte Ltd (1984) 2 MLJ 260, (1987) 2 MLJ 533
Facts:
The respondents were the owners of the property at No 9, First Avenue, Singapore. On 25 November 1982 the
respondents, in consideration of $20,000 paid by the appellant by a document in writing called option, offered to
sell to the appellant the property at $1,860,000 and on the terms and conditions as provided therein.
One of the terms of the sale was cl 6 which states, inter alia, that `The property is sold subject to your solicitors
receiving satisfactory answers to all requisitions sent to or to be sent by them to the various government
departments and in the event of any of the answers to such requisitions being found unsatisfactory to you or your
solicitors you may annul the sale in which event the 10% deposit paid by you shall forthwith be refunded to you
...`
On 30 November 1982 the appellant`s solicitors submitted to various government department legal requisitions.
While awaiting the receipt of the answers to these requisitions, the appellant, on 4 December 1982 accepted the
respondent`s offer, and in accordance with the terms thereof paid to the respondents` solicitors a sum of $166,000
being the 10% of the purchase price less the initial payment of $20,000, to be held by the solicitors as
stakeholder pending completion of the sale. A valid and binding agreement was thus made between the parties.
After the conclusion of the agreement, the appellant`s solicitors received the answers to the legal requisitions, all
of which appeared to be quite innocuous. On 16 December 1982 the appellants further received the road
interpretation plan relating to the property from the Road Division of the Public Works Department (hereinafter
referred to as `PWD`) which showed a narrow strip of the property abutting First Avenue being affected by a
proposal for road widening.
The appellant`s solicitors wrote a letter dated 16 December 1982 to the respondents` solicitors informing the
latter that the property was affected by road widening and also alleging that there was a misrepresentation made
to the appellant that the land area of the property was over 14,000 sq ft, whereas the actual land area was only
12,900 sq ft. The letter intimated that the appellant reserved his rights to rescind the contract and to demand for a
refund of the 10% of the purchase price, and enquired whether the respondents would agree to a reduction of a
purchase price. No reduction of the purchase price was agreed to. The appellant did not proceed with completion
of the purchase under the agreement.
Immediately after the time for completion as provided in the agreement had elapsed, the respondents` solicitors
gave the appellant 21 days` notice to complete failing which the contract would be treated by the respondents as
at the end and the deposit would be forfeited and retained for the benefit of the respondents.
The appellant applied to the High Court, inter alia, to rescind and annul the sale and purchase of the property on
the ground that the answer to the requisition from the PWD was unsatisfactory in that the property was affected
by a proposal for road widening. The court dismissed the application and held that a true and natural construction
of cl 6 must place it on an objective and reasonable basis and that only those answers to the requisitions which
were unsatisfactory to a reasonably determined purchaser could entitle such a purchaser to annul the sale and
purchase agreement. On the facts, the judge held that the area affected by the proposed road widening was so
inconsequential that no reasonably determined purchaser would regard it as unsatisfactory. (See [1984-1985]
SLR 398.)
Lim Kim Lian v Swee Eng Heng (1988) 1 MLJ 227 – eg of clause enabling purchaser to rescind contract once land
affected by any roadline - (Almost 14% of whole are of property affected by roadline UNSATISFACTORY)
- Sale and purchase was subject to ‘your solicitors receiving satisfactory replies to their legal requisitions and
applications for interpretation plans to various government departments and MRT Corp and if any of such
replies and/or interpretation plans are found to be unsatisfactory/if above property is affected or may be
affected by MRT system/any roadline/any road or drainage proposal/government acquisition or scheme then
this agreement may be rescinded at your option’
- Requisitions showed that property was affected by a roadline to almost 14% of the whole area
- P in exercise of right under option, rescinded agreement to purchase and asked for 10% deposit refund
- Held:
- By no stretch of imagination could 14% be considered inconsequential
- P would not have obtained what he wanted if 14% of total land area would sometime in the future
be taken away from him for road-widening purposes
- Reply unsatisfactory and P could rescind
- Difference in categorisation of road ought not to affect test to be applied in determining whether reply
from authorities was satisfactory
- Court should further give effect to parties’ intentions as expressed in option and not rewrite it
- Parties had taken pains to stipulate and expressly provide for the eventuality that occurred
* Qn: If road reserves affecting property, sufficient for P’s solicitor to merely send copy of road interpretation
plan together with explanatory notes to P and inform him that property is affected by road proposal?
No
Chu Yik Man v Rajagopal (1987) 2 MLJ 557 - (Land required for road widening just below 10%
UNSATISFACTORY)
Facts:
The plaintiff entered into an agreement for sale to purchase from the second defendant a two-storey bungalow.
The property was sold `subject to the satisfactory replies to the requisitions to the Local Authorities and the
Provisional Mass Rapid Transit Authority being received by the purchaser...`
Later the plaintiff`s solicitors received a duly answered legal requisition from the Development and Building
Control Division to the effect that the property was not affected by (a) any approved road proposal or (b) any
approved backlane proposal or (c) any approved drainage proposal or (d) any Government Gazette Notification.
However, eight days later, the said solicitors received from the Roads Planning & Design Branch, Roads
Division, Public Works Department, a road interpretation on which was noted that part of the property was `Land
required for Road Widening` and that road was a Category 4 Road, ie a major road of a required minimum width.
It was not disputed that the area that might be affected by road widening was just below 10% of the area of the
land. The affected land did not affect any part of the building which was sited far from the road and nearer to the
rear boundary.
The plaintiff sought a declaration that the agreement for sale to be declared null and void and an order for the
return of 10% deposit. He submitted that a loss of 10% of the land rendered the reply to the requisition
unsatisfactory.
- Property sold ‘subject to satisfactory replies to requisitions to Local Authorities and Provisional MRT
Authority being received by P’
- Pf’s solicitors received duly answered legal requisition from Development and Building Control Division
(DBCD) to effect that property unaffected
- Later, solicitors received from Roads Planning & Design Branch, Roads Division, Public Works Department, a
road interpretation on which was noted that part of property was ‘land required for Road Widening’ and that
road was a Category 4 Road i.e. major road of required minimum width
- Not disputed that area that might be affected by road widening was just below 10% of area of land and affected
land did not affect any part of building which was sited far from road and nearer to rear boundary
- Dft submitted that reply could not be regarded as unsatisfactory because answer in relevant requisition stated
that there was no approved road proposal affecting the property and that road interpretation plan and notation
thereon are not requisitions/replies to requisitions
- Pf sought declaration that agreement for sale be declared null and void and order for return of 10% deposit on
basis that loss of 10% of land rendered reply to requisition unsatisfactory
Held:
A requisition was merely an application to the competent authorities for certain information to be supplied.
A request for a road interpretation plan whether or not made pursuant to the standard form of requisition was
as much a requisition as Form DC9(DO)-5 and any reply from the competent authorities, whether contained
in the said plan or by separate correspondence, is a reply to the requisition
Formula ‘satisfactory reply to requisitions’ is intended to give P substantially what he has bargained for,
taking into account his purpose in purchasing property and such other circumstances which would have a
direct/indirect effect on fulfilments of that purpose
The road widening would result in a diminution in the area of the property (and therefore its overall value)
without any compensating increase in value in some other way as a result of the road widening.
- Diminution in land area cannot be sole determining factor in most cases, must consider factors that affect a
property in terms of its size, use, purpose of purchase and therefore its value
- Court will have to consider all relevant factors and applying an objective standard as to what is reasonable
in circumstances of each case – wld reasonably determined purchaser consider this diff in the land area
inconsequential?
- If no then reply unsatisf and contract can be rescinded
- If not purchaser has to complete the purchase
- : - obj test employed
- A difference of $30,000 to $50,000 in value was not negligible by any standards and a potential loss of
about1000 sq ft from about 10,000 sq ft was also not negligible, particularly in Singapore.
- Pf would not get what he had bargained for if sale were forced on him and hence reply to requisition was
accordingly not satisfactory as contemplated by agreement for sale
- Agreement null and void, deposit to be returned to Pf
- Since difficult to ascertain what will constit satisfy reply , SK Chan exhorted all conveyancers to take trouble
to revise drafting of the condition as to satisfy replies to make its meaning clearer or intent more specific
* Qn: How significant is it to expressly state, in contract, that property is purchased for redevelopment?
- Important, because if not stated, would not be assumed that property purchased for redevelopment (Road
widening proposal applicable if and when lot comes for development SATISFACTORY since P did not state
that buying property for redevelopment)
- Subsequent to Tatlien’s case, the LTA has since stated in the Road Line Plan Explanatory notes that “the
portions of land which are required as road reserve are coloured on the road line plan. These portions of land
are to be set aside when development/ redevelopment takes place on the subject lots or when road
construction/ improvement is carried out by the Land Transport Authority, whichever is earlier”.
- Statement wld have made diff prior to the case
In Teo Hong Choo v Chin Kiang Industries Pte Ltd [1983] 2 MLJ 309
- the learned judge distinguished Tatlien’s case on the ground that in the instant case, the property was affected
by the road widening line and as such the answer to the requisition was unsatisfactory.
- The plaintiff exercised an option to purchase No 1214 Upper Serangoon Road for $59,000. A sum of $20,000
was paid to the defendants for granting the option and $39,000 being the balance of the 10% of the purchase
price to the vendors` solicitors as stakeholders. The sale was subject to the Singapore Law Society`s
Conditions of Sale 1981 subject to `special conditions herein contained`. Clause 5 of the option provided that
`in the event of any of the answers to such requisitions being unsatisfactory, the purchaser may annul the sale
in which event the deposit paid shall be refunded to the purchaser without any recourse`.
- On 8 January 1983 a legal requisition was sent to the Development Building and Control Division by the
plaintiff`s solicitors. On 4 February 1983 the answers to the said legal requisition were received. On 23 March
1983, a letter written to the plaintiff`s solicitors by the Public Works Department stated, `that the road
widening lines indicated on the interpretation plan is applicable when the site comes up for
redevelopment or when the widening of Upper Serangoon takes effect.` In these circumstances the plaintiff
claimed that the answers to legal requisition 5(a) and (b) read with the letter of 23 March 1983 were
unsatisfactory within the meaning of cl 5 of the option thus enabling her to annul the sale and have refunded to
her the deposit of $59,000 paid to the defendants under the contract.
- Held , allowing the purchaser`s claim:
- (1).Clause 3 of the option to purchase had the effect of overriding cl 15 of the Singapore Law Society`s
Conditions of Sale 1981 and making cl 5 of the option to purchase a necessary condition of the contract.
- (2).As the answers to the legal requisition 5(a) and (b) were unsatisfactory from the point of view of the
purchaser, the purchaser could, at her option, annul the sale and have her 10% deposit refunded to her.
(Property possibly affected by road widening and re-zoning for redevelopment SATISFACTORY)
Tay Theng Khoon v Lee Kim Tah (Pte) Ltd (1992) 1 SLR 609 (CA)
- Clause in agreement allowed P to withdraw only of property was adversely affected by any ‘drainage or
proposal of government’
- P received from DBCD reply showing that part of property was zoned public open space and therefore not
available for development for residential purposes as intended by P
- P purported to withdraw from purchase on ground that reply was unsatisfactory due to ‘government proposal
adversely affecting property’
- Held:
- On true construction of sale of land, right to withdraw depended on satisfactoriness of reply
- Clearly, reply unsatisfactory in that it adversely affected property, but issue was whether it was a ‘proposal’ of
government
- Zoning of piece of property is NOT a ‘proposal’ and would be artificial to construe it otherwise
- Fact that property falls within particular master plan zoning per se does not require the doing of anything to
make it conform to the plan, hence DBCD reply not within ordinary meaning of word ‘proposal’
- ‘Proposal’ envisages a scheme/plan by which something is to be done
- Would be ‘proposal’ if it was by government authorities and other public bodies to undertake positive
functions of constructing, improving and developing public infrastructure e.g. roads, drainage, sewerage
- No such term could be implied/that if property would be developed, there would be no scheme affecting their
redevelopment
Lie Kee Pong v Chin Chow Yoon (1998) 3 SLR 92 - (Common drain forming 4.3% of land SATISFACTORY)
- Common drain formed 4.3% of land
- Held:
- Strip of land affected was only 4.3% of whole land and was at rear
- Neither house/any part of garden was affected
- Court found that P had seen garden and was satisfied with it and redevelopment of property was not
contemplated
- After considering all circumstances, reply to legal requisition satisfactory
- Judge stated that not possible or approp in lw to darw lnie o general application
Seet Peng Yam v Mohamed Mohidin Habibullah (1988) 2 MLJ 347 - (Substantial area of property affected and
road widening line cutting across part of front porch of house UNSATISFACTORY)
- Option clause stated that purchase subject to P’s solicitors receiving ‘satisfactory replies to legal requisitions
from various government departments and if replies unsatisfactory, V should refund 10% deposit to P’
- P’s solicitors received reply from DBCD that road line affected property and that substantial area of property
was affected and road widening line cut across part of front porch of house
- P claimed reply unsatisfactory and tried to get back refund for deposit
- Held:
- P wanted to purchase property which had a fair amount of land attached
- Government’s reply unsatisfactory and P entitled to refund
Kua Beng Koon v Kwok Wai Tien (1993) 3 SLR 101 - (Road proposal adversely affected property in that if
implemented, part of building had to be demolished UNSATISFACTORY)
- Clause in agreement stated that P could rescind if any of replies were unsatisfactory in that property was
affected by any road/drainage proposal
- BUT clause further provided that if reply stated that property would be affected by any road/drainage proposal
arising from a redevelopment of property shall not be deemed unsatisfactory
- Also, if common property was affected/marked with a category 5 road line/buffer of 2.3m, not deemed
unsatisfactory
- P’s solicitors informed V’s solicitors that they were rescinding agreement because road interpretation plan was
unsatisfactory because there was a ‘road proposal which adversely affected property’
- Road proposal was to widen service road running beside property and if implemented, part of building in
which property located, including part of apartment would have to be demolished
- Held:
- On plain reading of the words, so long as property was adversely affected by 1 of factors enumerated, P
entitled to rescind agreement
- Although no information as to exact amount of land that had been safeguarded in this case, amount was fairly
substantial
- If implemented, part of apartment would have to be demolished, property adversely affected
Wong Meng Yuen Eddie v Soh Chee Kong (1990) 3 MLJ 352 - (23.4% of property being affected by road widening
proposal UNSATISFACTORY)
- Sale was subject to Law Society’s Conditions of Sale
- Clause in agreement stated that sale was subject to P’s solicitors receiving satisfactory replies to their
requisitions to government departments
- Further provided that any such replies indicating that property would be affected by road proposal arising from
redevelopment of property would not be deemed unsatisfactory (‘clause’)
- Road proposal said to adversely affect property would only be implemented on development/redevelopment of
property or a road construction/improvement being carried out whichever was earlier
- Area affected was 23.4%
Held:
- Since it was V who sought to rely on ‘clause’, burden of proof on term to discharge, which they had failed to
do (failed to prove that purpose of property purchase by P was for redevelopment)
- Objective test to be applied as to whether property was adversely affected by road proposal
- Fact that no current programme does not make proposal any less a proposal
- Existing state of affairs is that there is a proposal and whenever implemented would affect property by
depriving it of 23.4% of its land area and also a portion of building
- Existence of such road proposals were within contemplation of parties and they sought to specifically provide
for it by including ‘clause’ in contract, so court’s duty was to interpret it and to give effect to parties’ intentions
Ang Kok Kuan v Ang Boh Seng (1993) 3 SLR 669 (CA) - (16% of land affected by road line
UNSATISFACTORY)
- Road interpretation plan showed that property was affected by road line, amounting to 16% of total area
affected by road line, 13% affecting building structure, 3% vacant land
- But at that point in time, there was no intention of PWD to carry out any road widening, but only for
‘safekeeping purposes’, applicable when subject lots came up for redevelopment/when required for road
widening, whichever was earlier
- V’s solicitors served 21-day notice to complete on P
- Held:
- While existence of road line per se does not make reply unsatisfactory, it was neither possible/desirable to lay
down any hard and fast rule as to where dividing line should be
- Relevant considerations include percentage of land affected, whether building itself would be affected by
road line and whether there was any particular feature/understanding relating to property
- Objective test viewed from perspective of ‘reasonably determined’ person
- Fact that no immediate proposal to widen road makes no difference in deciding whether reply
unsatisfactory
- But on fact, reply unsatisfactory as not only was percentage of total area significant, but more than ¾s of it
affected building itself
Lee Hooi Lian v Kuay Guan Kai (1990) 2 MLJ 345 - Can still invoke terms of option even if no contract signed yet
if V is clearly unable to sell what he had contracted to convey
- V granted option to P, paid option fee
- Option was to be exercised by P signing option and delivery of same together with a cheque representing 10%
of purchase price less option sum
- Option clause stated that sale and purchase subject to P’s solicitors receiving satisfactory replies to legal
requisitions, if not agreement could be rescinded at P’s option
- Property was affected by road line
- P asked for refund
- V argued that until option had been exercised, contract to purchase had not come into being and P could not
rely on any of clauses set out in option, which would only form terms of the contract when option exercised
- Held:
- Failure to exercise option was no ground to refuse refund of option money if V was clearly unable to
convey what he had contracted to sell, which is the case here
- No reason why P could not accept repudiation and recover option sum
- Taking a strictly technical approach would ignore essential nature of an option contract
- Unsatisfactory replies to legal requisitions, subdivision permission for the condominium refused for non-
compliance with planning conditions: Tate & Anor v Sihan Sadikin 1991 MMD [Dec] 1522
- Whether unsatisfactory replies gives rise to anticipatory breach: Lo Geok Kwee v Suriyakumari d/o
Kandasamy Gopal (B.T. 18.12.91)
- Unsatisfactory replies to legal requisitions, road interpretation plan showed that property would be affected
by road widening – approximately 10%: Yeo Wee Tee & Anor v Peter Cheong Seng Peow (O.S. 1234/86) -
1992
Recommendations
- the solution is to provide in property transactions, clauses in the Agreement for Sale and Purchase
which categorically and specifically identify the instances that would render a reply “unsatisfactory”
- eg.:
• frontage of the property, it will be prudent for him to stipulate clearly the limit of his tolerance in
the agreement for sale and purchase
• when purchasing a piece of land for redevelopment, realizes the implication the nett area will have
on the plot ratio of the number of units that he can construct on the land, then he should stipulate
the limit of his tolerance in precise terms in the agreement, also to include a specific clause in
relation to planning permission if this is allowed by the Vendor
• letters of offers in relation to housing loans and construction loans, care taken to define what would
be the allowable limit in relation to road proposals and drainage proposals rather than make such
offers conditional upon the imprecise term of “satisfactory replies to requisitions” an searches
What does the lawyer do after he is satisfied with the title and with the replies to the legal requisitions?
1. Report on the title to the client (see above). Once the contract has been signed, the solicitor of the P has to do
three things
a. lodge a caveat at the Singapore Land Authority
b. Send requisitions on title to the vendor’s solicitor’s. These are a series of searches directed at the
vendor on the title to the property. The P must send his requisitions within 14 days of the contract –
see condition 4 of the Law Soc’s Conditions of Sale 1999.
c. Draft the Conveyance or Transfer in favour of his client for the approval of the Vendor’s solicitor
2. The vendor’s solicitor will answer the Requisitions on title and approve the draft Conveyance/ Transfer. The
Vendor’s solicitor will also prepare the completion account setting out the balance payable by the purchaser on
completion.
3. The P’s solicitor will then write to his own client to put him in funds to complete the ourchase. The P’s
solicitor will have to prepare his own account setting out the amount payable on completion including all
stamp fees and disbursements and solicitor’s costs. Scaled fees in conveyancing matters have been revoked.
4. The engrossment of the Conveyance/ Transfer is then sent to the Vendor for execution. When the vendor has
executed the conveyance/ transfer, then arrangements can be made to complete.
Search on Vendor (covered mainly in lecture 3, included here as a reminder that apart from performing
searches on title and legal requisitions, you should also search the parties as well)
Residential property
- in the case of restricted property, to check the citizenship of the V at the time of acquisition of the
property; if the V is a non-Singaporean citizen or a foreign company or society, whether approval was
given by the Minister pursuant to s25 RPA? (see lecture 3 notes)
o name of owner or registered proprietor
o capacity to sell
o citizenship of the Vendor
o was property acquired by way of gift?
o Required to obtain a license?
- In the case of a Singapore Company or association, whether the Controller’s certificate/ clearance latter
pursuant to s10 RPA has been obtained? (see elcture 3 notes)
s77(1) BA:
Any disposition of property made by him shall be void except to extent that it has been made with consent
of/been subsequently ratified by, the court
s98:
Transactions at an undervalue can be avoided at option of OA
s99:
Transactions involving any unfair preferences can be avoided at option of OA
- If bankrupt gives unfair preference and becomes bankrupt because of that, transaction can be set aside
- But only on proof that bankrupt influenced to give that 3rd party a better position than if nothing had been
done)
s102 BA
– OA may apply to court to restore within the period of 6 months, ending with the date when the person was made
bankrupt, for undue preference, however, court can only do this when the it is satisfied that the transaction was
influenced by the desire to prefer
• To prevent any rescission of contract e.g. pending suit and S uses 9% deposit to pay off
- Hence need stakeholder’s clause to prevent disposal of deposit in such manner
- If searches satisfactory, advise that might not need stakeholders clause but ask client similarly if he wants it
Search on Purchaser