Sinnathamby Rajespathy v Lim Chong Seng: Illegal Agreement & HDB Act

Sinnathamby Rajespathy and another sued Lim Chong Seng and another in the High Court of Singapore, seeking restitution of $33,000 paid as a deposit for the rental of two rooms in a Housing and Development Board (HDB) flat. The agreement included an option to purchase, but the respondents had not met the minimum occupation period required by the Housing and Development Act. The court dismissed the appeal, finding the agreement illegal and void under the HDB Act, and refusing to allow amendments to the claim or to add a third party as a defendant.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal dismissed. The court found an agreement to lease with an option to purchase was an illegal agreement under the Housing and Development Act.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Sinnathamby RajespathyAppellant, PlaintiffIndividualAppeal dismissedLostK Rajendran, Prasanna
Lim Chong SengRespondent, DefendantIndividualAppeal dismissedWonTeo Eng Thye

3. Judges

Judge NameTitleDelivered Judgment
Choo Han TeckJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
K RajendranRaj Prasanna & Partners
PrasannaRaj Prasanna & Partners
Teo Eng ThyeKK Yap & Partners

4. Facts

  1. Appellants sought to purchase a flat near their siblings' homes.
  2. Respondents needed money urgently and decided to sell their flat.
  3. Raymond Lim proposed a plan to circumvent the minimum occupation period rule.
  4. Parties entered into a 'Lease With Option To Purchase' agreement.
  5. Appellants paid a $38,000 deposit, with $33,000 paid at the solicitor's office.
  6. Raymond Lim took the $33,000 but claimed to have only given $23,000 to the respondents.
  7. Respondents claimed they did not receive any money from Raymond Lim.
  8. The solicitor explained the lease but claimed to act for neither party.

5. Formal Citations

  1. Sinnathamby Rajespathy and Another v Lim Chong Seng and Another, DA 6/2002, [2002] SGHC 163

6. Timeline

DateEvent
Respondents engaged Raymond Lim as housing agent
Appellants paid $5,000 deposit
Agreement to lease with option to purchase signed
Completion of appellants' flat sale
Appellants paid $33,000 at solicitor's office
Appellants were to commence tenancy of two rooms
Date after which option to purchase could be exercised (2 months later)
Decision Date

7. Legal Issues

  1. Illegality of Agreement
    • Outcome: The court held that the agreement was illegal and void under s 49A of the Housing and Development Act.
    • Category: Substantive
    • Sub-Issues:
      • Violation of Housing and Development Act
      • Agreement to sell before minimum occupation period
  2. Amendment of Claim
    • Outcome: The court refused to allow the amendment of the writ to add Raymond Lim as a defendant, deeming the application too late.
    • Category: Procedural
    • Sub-Issues:
      • Late application to amend writ
      • Joining third party as defendant after trial
  3. Receipt of Money
    • Outcome: The court found that the respondents did not receive the $33,000, despite signing a receipt, as the money was taken by Raymond Lim.
    • Category: Substantive
    • Sub-Issues:
      • Effect of signed receipt
      • Acknowledgement of payment
    • Related Cases:
      • [1998] 2 SLR 121

8. Remedies Sought

  1. Restitution of $33,000
  2. Judgment against Raymond Lim
  3. Amendment of writ to include Raymond Lim as defendant

9. Cause of Actions

  • Restitution
  • Money had and received
  • Mistake of law

10. Practice Areas

  • Civil Litigation
  • Real Estate Law

11. Industries

  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Archbolds (Freightage) Ltd v S Spanglett LtdN/ANo[1961] 1 QB 374N/ACited regarding the appellants' obligation to rely on their contractual rights under the lease with option to purchase agreement.
Burt v Claude Cousins & Co LtdN/ANo[1971] 2 QB 426N/ACited in relation to the proposition that an estate agent receives deposits as an agent of the vendor only when he is authorised to do so; otherwise, he holds it as stakeholder pending the outcome of a future event.
Fook Gee Finance Co Ltd v Liu Cho Chit & AnorCourt of AppealYes[1998] 2 SLR 121SingaporeCited for the principle that an acknowledgement of receipt cannot have the effect of treating what has not been paid as having been paid.
MFH Marine Pte Ltd v Asmonah Bin MohamadN/ANo[2000] 4 SLR 368SingaporeCited for the rejection of submissions on the basis of money had and received and mistake of law on the ground that these claims were not pleaded.
Sorrell v FinchN/ANo[1977] AC 728N/ACited for the proposition that an estate agent receives deposits as an agent of the vendor only when he is authorised to do so; otherwise, he holds it as stakeholder pending the outcome of a future event.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Housing and Development Act (Cap 129, 1997 Ed) s 49ASingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Lease With Option To Purchase
  • Minimum Occupation Period
  • Housing and Development Board
  • HDB Act
  • Restitution
  • Stakeholder
  • Receipt
  • Deposit
  • Agreement to Sell

15.2 Keywords

  • Housing and Development Board
  • HDB
  • Illegal agreement
  • Minimum occupation period
  • Restitution
  • Lease with option to purchase

16. Subjects

  • Contract Law
  • Real Estate Law
  • Housing Law
  • Civil Procedure

17. Areas of Law

  • Civil Procedure
  • Landlord and Tenant
  • Contract Law
  • Housing and Development Act