Ma Ong Kee v Kaiyo Reptile: GST Liability in Property Sale Dispute

In a dispute before the High Court of Singapore on 16 August 2011, Ma Ong Kee and Tan Soo Ling (the Purchasers) sued Kaiyo Reptile Products Private Limited (the Vendor) for specific performance and damages related to a property purchase agreement. The central legal issue was whether the Purchasers were liable for Goods and Services Tax (GST) on the purchase price. The Vendor counterclaimed for declarations that it was entitled to rescind the agreement and forfeit the deposit. Woo Bih Li J ruled in favor of the Vendor, granting the declarations sought and dismissing the Purchasers' claim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Declarations sought by the Vendor granted.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court addressed whether purchasers were liable for GST on a property purchase, where the agreement incorporated the 1999 Conditions of Sale.

1.7 Decision Date

15 August 2011

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Ma Ong Kee	Plaintiff	Individual	Claim Dismissed	Lost	Subramaniam s/o Ayasamy Pillai of Colin Ng & Partners LLP Taryn Yap of Colin Ng & Partners LLP
Tan Soo Ling	Plaintiff	Individual	Claim Dismissed	Lost	Subramaniam s/o Ayasamy Pillai of Colin Ng & Partners LLP Taryn Yap of Colin Ng & Partners LLP
Kaiyo Reptile Products Pte Ltd	Defendant	Corporation	Declarations Granted	Won	Beh Eng Siew of Lee Bon Leong & Co Bernard Sahagar of Lee Bon Leong & Co

3. Judges

Judge Name	Title	Delivered Judgment
Woo Bih Li	Judge	Yes

4. Counsels

Counsel Name	Organization
Subramaniam s/o Ayasamy Pillai	Colin Ng & Partners LLP
Taryn Yap	Colin Ng & Partners LLP
Beh Eng Siew	Lee Bon Leong & Co
Bernard Sahagar	Lee Bon Leong & Co

4. Facts

The Purchasers entered into an agreement to purchase a property from the Vendor for $3,800,000.
The option to purchase incorporated the Singapore Law Society’s Conditions of Sale 1999.
A dispute arose regarding whether the Purchasers were liable to pay GST on the purchase price.
The Vendor terminated the agreement and forfeited the deposit paid by the Purchasers.
The Purchasers claimed specific performance and damages; the Vendor counterclaimed for declarations and damages.
The parties could not agree on whether condition 7.3.1 of the 1999 Conditions of Sale imposed GST liability on the Purchasers.

5. Formal Citations

Ma Ong Kee and another v Kaiyo Reptile Products Pte Ltd, Suit No 642 of 2010, [2011] SGHC 188

6. Timeline

Date	Event
2010-03-31	Option to purchase granted by Vendor to Purchasers
2010-04-14	Purchasers exercised the option to purchase
2010-04-15	Vendor requested payment of GST on the deposit
2010-05-11	Purchasers stated they were not obliged to pay GST
2010-05-12	Vendor disagreed with Purchasers regarding GST liability
2010-05-14	Vendor confirmed its position on GST liability
2010-07-28	Scheduled date of completion
2010-07-30	Vendor sent a 21-day notice to complete
2010-07-30	Purchasers sent a 21-day notice to complete
2010-08-20	Expiry of both 21-day notices to complete
2010-08-24	Purchasers filed writ of summons
2010-08-27	Purchasers demanded Vendor refrain from forfeiting deposit
2010-08-30	Vendor stated it would hold deposit pending outcome of legal proceedings
2011-07-04	Hearing fixed for three days
2011-08-16	Decision Date

7. Legal Issues

Liability for Goods and Services Tax (GST)
- Outcome: The court held that condition 7.3.1 of the 1999 Conditions of Sale stipulated that the purchaser is to pay GST.
- Category: Substantive
- Related Cases:
  - [1998] 3 SLR(R) 463
  - [1995] 3 SLR(R) 276
  - [1998] 2 SLR(R) 292

8. Remedies Sought

Specific Performance
Liquidated Damages
General Damages
Declarations

9. Cause of Actions

Breach of Contract
Specific Performance

10. Practice Areas

Commercial Litigation
Real Estate Law

11. Industries

Real Estate

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Woon Wee Hao v Coastland Realty Pte Ltd	High Court	Yes	[1998] 3 SLR(R) 463	Singapore	Cited to contrast the clarity of its contractual provision regarding GST liability with the ambiguity of condition 7.3.1 of the 1999 Conditions of Sale. Also cited regarding the issue of whether the contractual obligation had merged into the transfer.
Kuo Ching Yun and another v H & L Investments Holding Pte Ltd	High Court	Yes	[1995] 3 SLR(R) 276	Singapore	Cited as a reason for the introduction of condition 7.3.1 of the 1999 Conditions of Sale, as it addressed whether a similar condition in the 1994 Conditions of Sale imposed an obligation on the purchaser to pay GST.
Challenger Technologies Pte Ltd v Sheares Edwin Charles Hingwee and others	High Court	Yes	[1998] 2 SLR(R) 292	Singapore	Cited as a reason for the introduction of condition 7.3.1 of the 1999 Conditions of Sale, as it addressed whether it was a term of the agreement for the sale and purchase that the purchaser was to bear the GST.
ACS Computer Pte Ltd v Rubina Watch Co (Pte) Ltd	High Court	Yes	[1997] 1 SLR(R) 1006	Singapore	Cited with approval in Woon Wee Hao regarding the contractual obligation not merging into the transfer.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Goods and Services Tax Act (Cap. 117A)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Goods and Services Tax
GST
1999 Conditions of Sale
Option to Purchase
Deposit
Notice to Complete
Specific Performance

15.2 Keywords

GST
property
sale
contract
Singapore
Conditions of Sale

17. Areas of Law

Area Name	Relevance Score
Goods and Services Tax	90
Contract Law	80
Real Estate	75
Revenue Law	60
Conveyance	50

16. Subjects

Contractual Interpretation
Property Transactions
Tax Law