Cheong Lay Yong v Muthukumaran: Specific Performance & Option Contract Dispute

In Cheong Lay Yong v Muthukumaran s/o Varthan, the High Court of Singapore ruled in favor of the Plaintiff, Cheong Lay Yong, ordering specific performance of a contract for the sale of an apartment against the Defendants, Muthukumaran s/o Varthan and Indira d/o Srinivasa Naidu. The Defendants resisted the claim, bringing in their solicitors and property agent as third parties, claiming indemnity. The court dismissed the Defendants' claims against the third parties and awarded costs against the Defendants on an indemnity basis. The primary legal issue revolved around the validity of an option to purchase the property and whether the Defendants were bound by it.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Specific performance case involving a property sale. Court ruled in favor of the plaintiff, ordering specific performance and awarding costs.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
MUTHUKUMARAN S/O VARTHANDefendantIndividualClaim DismissedLost
INDIRA D/O SRINIVASA NAIDUDefendantIndividualClaim DismissedLost
Cheong Lay YongPlaintiffIndividualJudgment for PlaintiffWon
K Krishna & PartnersThird PartyLaw FirmClaim DismissedDismissed
Property AgentThird PartyOtherClaim DismissedDismissed

3. Judges

Judge NameTitleDelivered Judgment
Quentin LohJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Ignatius JosephIgnatius J & Associates
Christopher Anand DanielMatthew Chiong Partnership
Lim Cheng Hock LawrenceMatthew Chiong Partnership
Terence SeahShookLin & Bok LLP
Vinodh S CoomaraswamyShookLin & Bok LLP
Ivan KohShookLin & Bok LLP
Cheah Kok LimSng & Company

4. Facts

  1. Plaintiff and Defendants agreed on the sale of an apartment for $635,000.
  2. Plaintiff issued a cheque for $6,350 as option money.
  3. Plaintiff stopped payment on the first cheque due to concerns about a nearby substation.
  4. Defendants were unaware of the stopped payment as they were on holiday.
  5. Plaintiff issued a second cheque for $6,350 and exercised the option.
  6. Defendants refused to proceed with the sale, claiming the option was invalid.
  7. Defendants claimed their solicitor acted without mandate.
  8. The 1st Defendant was found to be an unreliable witness who lied about material facts.
  9. The Plaintiff managed to get the record of her mobile telephone calls on 30 May 2007, and they back up her evidence completely.

5. Formal Citations

  1. Cheong Lay Yong v Muthukumaran s/o Varthan, Suit No 783 of 2007, [2010] SGHC 59

6. Timeline

DateEvent
Plaintiff viewed the Apartment and agreed on the price, issued a cheque, and was given an option to purchase the Apartment.
Plaintiff viewed the Apartment from the outside, was disturbed by a substation, changed her mind, and stopped payment of the cheque.
Defendants left Singapore for a holiday to Canada.
Plaintiff contacted the Agent and went to see the Defendants’ Solicitors, handing them a second cheque and the original Option.
Defendants returned from Canada.
Plaintiff exercised the Option by paying the remaining 4% of the purchase price.
Last date for the exercise of the Option.
Oral submissions were heard.
Defendants appealed against the decision.
Judgment was delivered.

7. Legal Issues

  1. Specific Performance
    • Outcome: The court granted specific performance of the contract for the sale of the apartment.
    • Category: Substantive
    • Sub-Issues:
      • Delay in completion
      • Damages in lieu of specific performance
  2. Validity of Option to Purchase
    • Outcome: The court held that the Defendants had affirmed the contract despite the Plaintiff's initial repudiation and were bound by the option.
    • Category: Substantive
    • Sub-Issues:
      • Repudiation of contract
      • Acceptance of repudiation
      • Affirmation of contract
      • Waiver of rights
  3. Breach of Contract
    • Outcome: The court found that the Defendants had breached the contract by refusing to complete the sale.
    • Category: Substantive
    • Sub-Issues:
      • Failure to complete sale
      • Damages for breach
  4. Negligence and Breach of Duty by Solicitors
    • Outcome: The court found no negligence or breach of duty on the part of the solicitors.
    • Category: Substantive
    • Sub-Issues:
      • Acting without mandate
      • Failure to inform client
      • Acceptance of cheque

8. Remedies Sought

  1. Specific Performance
  2. Damages
  3. Interest
  4. Account of Profits

9. Cause of Actions

  • Specific Performance
  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Real Estate Litigation
  • Contract Disputes
  • Specific Performance

11. Industries

  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Mohamed Ali s/o Abdul Razak v Tan Ah BeeHigh CourtYes[2009] SGHC 279SingaporeCited regarding the practice of tendering a cheque in exchange for the grant of an option and the effect of a dishonoured cheque on the option.
Wong Fook Heng v Amixco Asia Pte LtdHigh CourtYes[1992] 2 SLR 342SingaporeCited regarding the tender of a cheque in exchange for the grant of an option and the vendor's right to sue on a cheque paid for the option fee even if the purchaser repudiated the underlying option contract.
Min Hong Auto Supply Pte Ltd v Loh Chun SengUnknownYes[1993] 3 SLR 498SingaporeCited regarding the effect of a dishonoured cheque on a contract.
Spiro v Glencrown Properties LtdChancery DivisionYes[1991] 1 Ch 537England and WalesCited for its description of an option to purchase land and the nature of the obligations it imposes on the purchaser and vendor.
Alrich Development Pte Ltd v Rafiq JumabhoyCourt of AppealYes[1995] 2 SLR 401SingaporeCited for its acceptance of the description of an option to purchase land as a contract for the sale of land contingent upon the exercise of the option and that an option is a unilateral contract.
Carlill v Carbolic Smoke Ball CoQueen's BenchYes[1893] 1 QB 256England and WalesCited as an example of a unilateral contract.
Heyman & Anor v Darwins LtdHouse of LordsYes[1942] AC 356United KingdomCited for the principle that repudiation by one party does not terminate a contract unless accepted by the other party.
Lim Hwee Meng v Citadel Investment Pte LtdUnknownYes[1998] 3 SLR 601SingaporeCited regarding the effect of stopping payment on a cheque given in consideration for a contract.
Joseph Mathew & Anor v Singh Chiranjeev & AnorCourt of AppealYes[2009] SGCA 51SingaporeCited regarding the effect of stopping payment on a cheque given in consideration for a contract.
Foo Kee Boo v Ho Lee Investments (Pte) LtdUnknownYes[1988] SLR 620SingaporeCited regarding the effect of stopping payment on a cheque given in consideration for a contract.
Tournier v National Provincial and Union Bank of EnglandUnknownYes[1924] 1 KB 461England and WalesCited regarding solicitor client privilege.
Fernhill City Investments Pte Ltd v Lee Keng HuatHigh CourtYes[1997] SGHC 327SingaporeCited for the application of Condition 8 interest in similar fact situations where specific performance is being claimed.
Alivestone Investment Pte Ltd v Splendore Investments Pte LtdUnknownYes[1996] 1 SLR(R) 678SingaporeCited for the application of Condition 8 interest in similar fact situations where specific performance is being claimed.
British & Malayan Trustees Ltd v Sindo Realty Pte LtdUnknownYes[1999] 1 SLR(R) 61SingaporeCited for the doctrine of conversion and the vendor becoming a qualified trustee of the property for the purchaser.
Lim Kim Som v Sheriffa Taibah bte Abdul RahmanUnknownYes[1994] 1 SLR(R) 233SingaporeCited for the doctrine of conversion and the vendor becoming a qualified trustee of the property for the purchaser.
Chen Kon Ling-Tony v Quay Properties Pte LtdUnknownYes[2004] 2 SLR 181SingaporeCited for the doctrine of conversion and the vendor becoming a qualified trustee of the property for the purchaser.
Lysaght v EdwardsChancery DivisionYes(1876) 2 Ch D 499England and WalesCited for the doctrine of conversion and the vendor becoming a qualified trustee of the property for the purchaser.
Lake v Bayliss & AnorUnknownYes[1974] 1 WLR 1073England and WalesCited regarding the vendor's accountability for the purchase money as a trust if the vendor wrongfully sells the property to another person.
Personal Representatives of Tang Man Sit v Capacious Investments LtdPrivy CouncilYes[1996] 1 AC 514Hong KongCited for the principle that the law frequently affords an injured person more than one remedy for the wrong he has suffered and the availability of alternative remedies.
Main-Line Corporate Holdings Ltd v United Overseas Bank LtdUnknownYes[2010] 1 SLR 189SingaporeCited for the principle that the law frequently affords an injured person more than one remedy for the wrong he has suffered and the availability of alternative remedies.
Jia Min Building Construction Pte Ltd v Ann Lee Pte LtdUnknownYes[2004] 3 SLR(R) 288SingaporeCited for the maxim "Nullus commodum capere potest de injuria sua propria" (No one can gain an advantage by his own wrong).
Lim Eng Hock Peter v Lin Jian Wei and AnorCourt of AppealYes[2009] SGCA 48SingaporeCited as an example of a court giving exemplary or punitive damages.
Attorney-General v BlakeHouse of LordsYes[2001] 1 AC 268United KingdomCited for the principle that a court can award restitutionary damages for breach of contract in appropriate and exceptional cases.
Experience Hendrix LLC v PPX Enterprise IncUnknownYes[2003] 1 All ER (Comm) 830England and WalesCited for the principle that a court can award restitutionary damages for breach of contract in appropriate and exceptional cases.
Esso Petroleum Co Ltd v Niad LtdUnknownYes[2001] All ER (D) 324England and WalesCited for the principle that a court can award restitutionary damages for breach of contract in appropriate and exceptional cases.
O’Brien Homes Ltd v LaneUnknownYes[2004] EWHC 303England and WalesCited for the principle that a court can award restitutionary damages for breach of contract in appropriate and exceptional cases.
Aktieselskabet Reidar v Arcos LtdKing's Bench DivisionYes[1927] 1 KB 352England and WalesCited as an example where liquidated damages for delay cater for just that, delay, and the innocent party is entitled to pursue other heads of damages apart from delay damages.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)Singapore
Property Tax Act (Cap 254)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Specific Performance
  • Option to Purchase
  • Repudiation
  • Affirmation
  • Dishonoured Cheque
  • Stakeholder
  • Indemnity Costs
  • Liquidated Damages
  • Trustee
  • Doctrine of Conversion

15.2 Keywords

  • Specific Performance
  • Option Contract
  • Property Sale
  • Breach of Contract
  • Singapore High Court

17. Areas of Law

Area NameRelevance Score
Specific performance80
Breach of Contract75
Contract Law70
Sale of Apartment65
Real Estate60
Property Law55
Civil Procedure50
Estoppel40
Damages30
Cerebral Palsy25

16. Subjects

  • Contract Law
  • Real Estate
  • Civil Litigation