Soo Nam Thoong v Phang Song Hua: Rescission of Option to Purchase Due to Unsatisfactory Land Transport Authority Road Line Plan
In Soo Nam Thoong and another v Phang Song Hua, the High Court of Singapore, on 1 July 2011, ruled in favor of the plaintiffs, Soo Nam Thoong and another, allowing them to rescind an Option to Purchase for a property due to an unsatisfactory reply from the Land Transport Authority (LTA) regarding a road line plan. The court interpreted clause 10(b) of the Option narrowly, finding that the LTA's reply, indicating a substantial portion of the property was required as Road Reserve, was unsatisfactory, entitling the plaintiffs to a refund of their deposit. The claim was for a declaration regarding the unsatisfactory nature of the LTA's reply and the validity of the rescission.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiffs
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court allowed the plaintiffs to rescind an option to purchase due to an unsatisfactory Land Transport Authority road line plan, interpreting a clause narrowly.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Soo Nam Thoong | Plaintiff | Individual | Declaration Granted | Won | Tan Lam Siong |
| Phang Song Hua | Defendant | Individual | Claim Dismissed | Lost | Aqbal Singh s/o Kuldip Singh |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Seng Onn | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tan Lam Siong | L S Tan & Co |
| Aqbal Singh s/o Kuldip Singh | Pinnacle Law LLC |
4. Facts
- Plaintiffs were granted an Option to Purchase for a property at $2.85 million.
- Plaintiffs paid an option fee of $28,500.00.
- Plaintiffs exercised the Option and paid a further sum of $256,500.
- LTA's reply indicated a substantial portion of the property was required as Road Reserve.
- Plaintiffs estimated about 40% of the property was required as Road Reserve.
- Plaintiffs rescinded the agreement pursuant to clause 10 of the Option.
- The dispute centered on the legal interpretation of clause 10(b) of the Option.
5. Formal Citations
- Soo Nam Thoong and another v Phang Song Hua, Originating Summons No. 359 of 2011/K, [2011] SGHC 159
6. Timeline
| Date | Event |
|---|---|
| Option to Purchase dated granted | |
| Option exercised | |
| Plaintiffs' solicitors sent notice of rescission | |
| Land Transport Authority Road Line Plan dated | |
| Defendant’s solicitors replied | |
| LTA confirmed land is required to be set aside | |
| Original completion date of the Option | |
| Judgment reserved |
7. Legal Issues
- Interpretation of Contractual Clauses
- Outcome: The court interpreted the clause in favor of the plaintiffs, finding it to have a narrow ambit.
- Category: Substantive
- Sub-Issues:
- Ambiguity in drafting
- Effect of parentheses in contractual language
- Related Cases:
- [2007] 2 SLR(R) 891
- Right to Rescind Option to Purchase
- Outcome: The court held that the plaintiffs had the right to rescind the agreement based on an unsatisfactory reply from the Land Transport Authority.
- Category: Substantive
- Sub-Issues:
- Unsatisfactory replies to legal requisitions
- Effect of road line proposals on property value
8. Remedies Sought
- Declaration that reply to requisition is unsatisfactory
- Declaration that Plaintiffs are entitled to rescind the Option to Purchase
- Order for repayment of monies paid
9. Cause of Actions
- Breach of Contract
- Rescission of Contract
10. Practice Areas
- Commercial Litigation
- Real Estate Transactions
11. Industries
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sandar Aung v Parkway Hospitals Singapore Pte Ltd | Court of Appeal | Yes | [2007] 2 SLR(R) 891 | Singapore | Cited for principles governing the construction of documents, emphasizing the importance of context in interpreting contract language. |
| Reardon Smith Line Ltd v Yngvar Hansen-Tangen | House of Lords | Yes | [1976] 1 WLR 989 | United Kingdom | Cited to emphasize the objective assessment of the parties' intentions in a contract. |
| Teo Hong Choo v Chin Kiang Industries Pte Ltd | N/A | Yes | [1983] 2 MLJ 309 | Malaysia | Cited for the interpretation of clauses regarding replies to legal requisitions, noting their purpose as a procedural device for purchasers to opt out of a contract. |
| Chu Yik Man v S Rajagopal & Co & Anor | N/A | Yes | [1987] 2 MLJ 557 | Malaysia | Cited for the intention of parties as expressed in the formula `satisfactory reply to requisitions`. |
| Wong Meng Yuen Eddie & Anor v Soh Chee Kong & Ors | N/A | Yes | [1990] 3 MLJ 352 | Malaysia | Cited for the principle that the vendor bears the burden of proving that a specific proviso deeming certain replies to requisitions as satisfactory is fulfilled. |
| Kua Beng Koon v Kwok Wai Tien & Anor | N/A | Yes | [1993] 3 SLR 101 | Singapore | Cited to show a common commercial understanding that it is a narrow group of road or drainage proposals that are generally found to be consistent with what the Purchaser has substantially bargained for and will typically be deemed satisfactory, ie, road or drainage proposals that affect the property only if there is any redevelopment of the property. |
| Choo Boo Ching & Anor v Heng Guan Hong Geoffrey | High Court | Yes | [1997] SGHC 99 | Singapore | Cited to show a common commercial understanding that it is a narrow group of road or drainage proposals that are generally found to be consistent with what the Purchaser has substantially bargained for and will typically be deemed satisfactory, ie, road or drainage proposals that affect the property only if there is any redevelopment of the property. |
| Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd | N/A | Yes | [2008] 3 SLR(R) 1029 | Singapore | Cited for the principle that the court’s main objective in interpreting a contract is to ascertain the objective intention of parties. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Option to Purchase
- Road Reserve
- Legal Requisitions
- Rescission
- Satisfactory Replies
- Clause 10(b)
- Land Transport Authority
- Redevelopment
- Road construction/improvement
15.2 Keywords
- option to purchase
- rescission
- land transport authority
- road reserve
- legal requisitions
- contract interpretation
16. Subjects
- Contract Law
- Real Estate
- Land Acquisition
17. Areas of Law
- Contract Law
- Real Estate Law
- Conveyancing Law