Chan Ah Beng v Liang and Sons: Specific Performance & Breach of Contract
In Chan Ah Beng v Liang and Sons Holdings (S) Pte Ltd, the Court of Appeal of Singapore heard an appeal against the High Court's decision regarding an option to purchase a property. The primary legal issue was whether the appellant, Chan Ah Beng, had breached the terms of the option by failing to use his best endeavors to obtain Housing Development Board (HDB) approval for the sale. The court allowed the appeal in part, finding that while Chan Ah Beng had breached the contract, the respondent was not entitled to both interest and damages. The court dismissed the appeal against the award of costs.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Allowed in Part
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal concerning specific performance of an option to purchase property. The court allowed the appeal in part, addressing issues of breach of contract.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Chan Ah Beng | Appellant | Individual | Appeal allowed in part | Partial | Yeh Siang Hui, Ng Wai Keong Timothy |
| Liang and Sons Holdings (S) Pte Ltd | Respondent | Corporation | Damages by an account of rental not awarded | Partial | Tan Hee Joek, Tan Hee Liang |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of the Court of Appeal | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | Yes |
| V K Rajah | Justice of the Court of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Yeh Siang Hui | J S Yeh & Co |
| Ng Wai Keong Timothy | Timothy Ng LLC |
| Tan Hee Joek | Tan See Swan & Co |
| Tan Hee Liang | Tan See Swan & Co |
4. Facts
- The Appellant granted the Respondent an option to purchase a property for $1.2 million.
- The Respondent exercised the option to purchase the property.
- The sale was subject to HDB approval and the Appellant using best endeavors to obtain it.
- HDB withheld approval due to breaches by the Appellant, including unauthorized structures and obstruction of common areas.
- The Town Council initiated legal action (DC Suit) against the Appellant for trespass.
- The Appellant failed to comply with an injunction order related to the DC Suit.
- The Judge found that the Appellant had failed to use his best endeavors to obtain HDB approval.
5. Formal Citations
- Chan Ah Beng v Liang and Sons Holdings (S) Pte Ltd, Civil Appeal No 88 of 2011 and Summons No 5443 of 2011, [2012] SGCA 34
- Liang & Sons Holdings (S) Pte Ltd v Chan Ah Beng, , [2011] SGHC 236
6. Timeline
| Date | Event |
|---|---|
| Option to purchase the Property granted by the Appellant to the Respondent | |
| Option exercised by the Respondent | |
| Application for resale/transfer of the Property submitted to HDB | |
| HDB inspected the Property | |
| Action for trespass in the DC Suit commenced | |
| HDB wrote to both JSY and TSS stating that it was unable to process the resale application | |
| The Town Council obtained an order for an injunction against the Appellant | |
| HDB highlighted a further impediment to the sale of the Property, namely that the Appellant owed rental arrears | |
| Scheduled date of completion | |
| Quantum of arrears confirmed by HDB | |
| TSS first gave notice to JSY that the Respondent would charge interest for late completion | |
| A committal order was ordered against the Appellant | |
| Originating Summons No 251 of 2011 filed | |
| The Town Council obtained default judgment against the Appellant | |
| Judge granted an adjournment | |
| Judge granted an adjournment | |
| HDB replied to both parties’ solicitors stating that it had been advised by the Town Council’s solicitors that the obstruction to the common area had not been removed | |
| The Town Council’s solicitors wrote to the Appellant and copied to JSY, KC and TSS, stating the settlement terms of the DC Suit | |
| JSY replied accepting the terms of the settlement | |
| TSS wrote to JSY and copied to the Town Council’s solicitors | |
| TSS wrote to the Town Council’s solicitors and copied to JSY, confirming that the Respondent was agreeable to the arrangement provided that the relevant irrevocable instructions were duly provided for in writing by JSY | |
| Appellant discharged KC | |
| JSY replied to TSS’ letter of 14 June 2011 and copied to KC and the Town Council’s solicitors | |
| Final hearing before the Judge | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the Appellant had breached Clause 9 of the Option by failing to use his best endeavours to obtain HDB’s approval.
- Category: Substantive
- Sub-Issues:
- Failure to use best endeavours to obtain HDB approval
- Delay in completion of sale
- Related Cases:
- [2011] SGHC 236
- Specific Performance
- Outcome: The court upheld the order for specific performance.
- Category: Substantive
- Damages for Breach of Contract
- Outcome: The court held that awarding both interest and damages (by an account of rent) would amount to double compensation and disallowed the award of damages by an account of rent.
- Category: Substantive
- Sub-Issues:
- Double compensation
- Liquidated damages
- Admissibility of Fresh Evidence
- Outcome: The court allowed the second category of documents to be admitted but did not allow the first and third categories of documents to be admitted.
- Category: Procedural
- Related Cases:
- [1954] 1 WLR 1489
8. Remedies Sought
- Specific Performance
- Damages
- Interest for late completion
- Costs
9. Cause of Actions
- Breach of Contract
- Failure to use best endeavors
10. Practice Areas
- Commercial Litigation
- Real Estate Law
11. Industries
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Liang & Sons Holdings (S) Pte Ltd v Chan Ah Beng | High Court | Yes | [2011] SGHC 236 | Singapore | Cited as the decision under appeal. The Court of Appeal reviewed the High Court Judge’s findings regarding the breach of contract and remedies awarded. |
| Ladd v Marshall | English Court | Yes | [1954] 1 WLR 1489 | England | Cited for the test to justify the reception of fresh evidence at the appellate stage. |
| Cheong Kim Hock v Lin Securities (Pte) (in liquidation) | Court of Appeal | Yes | [1992] 1 SLR(R) 497 | Singapore | Cited as an example of a case where the Ladd v Marshall test was cited and followed by the court. |
| Cheng-Wong Mei Ling Theresa v Oei Hong Leong | Court of Appeal | Yes | [2006] 2 SLR(R) 637 | Singapore | Cited as an example of a case where the Ladd v Marshall test was cited and followed by the court. |
| Sim Cheng Soon v BT Engineering Pte Ltd and another | Court of Appeal | Yes | [2006] 3 SLR(R) 551 | Singapore | Cited as an example of a case where the Ladd v Marshall test was cited and followed by the court. |
| Su Sh-Hsyu v Wee Yue Chew | Court of Appeal | Yes | [2007] 3 SLR(R) 673 | Singapore | Cited for the principle that the three conditions of the Ladd v Marshall test must be cumulatively satisfied. |
| Ong Khim Heng Daniel v Leonie Court Pte Ltd | High Court | Yes | [2000] 3 SLR(R) 670 | Singapore | Cited for the definition of a 'best endeavours' clause in a contract. |
| Group Exklusiv Pte Ltd v Diethelm Singapore Pte Ltd | High Court | Yes | [2003] 4 SLR(R) 582 | Singapore | Cited for the interpretation of a 'best endeavours' clause in the context of obtaining approval from an authority. |
| Travista Development Pte Ltd v Tan Kim Swee Augustine and others | Court of Appeal | Yes | [2008] 2 SLR(R) 474 | Singapore | Cited for the legal obligation imposed by a contractual best endeavours clause. |
| Oversea-Chinese Banking Corp Ltd and another v Justlogin Pte Ltd and another | Court of Appeal | Yes | [2004] 2 SLR(R) 675 | Singapore | Cited as an example of a case where the 'best endeavours' test was applied. |
| Justlogin Pte Ltd and another v Oversea-Chinese Banking Corp Ltd and another | High Court | Yes | [2004] 1 SLR(R) 118 | Singapore | Cited as an example of a case where the 'best endeavours' test was applied. |
| MacarthurCook Property Investment Pte Ltd and Another v Khai Wah Development Pte Ltd | High Court | Yes | [2007] SGHC 93 | Singapore | Cited as an example of a case where the 'best endeavours' test was applied. |
| Indulge Food Pte Ltd v Torabi Marashi Bahram | High Court | Yes | [2010] 2 SLR 540 | Singapore | Cited as an example of a case where the 'best endeavours' test was applied. |
| Cheong Lay Yong v Muthukumaran s/o Varthan and another (K Krishna & Partners and another, third parties) | High Court | Yes | [2010] SLR 16 | Singapore | The court disagreed with the view that Condition 6 of the Conditions of Sale is of no application to the issue of an innocent purchaser’s entitlement to rent. |
| Re Highett and Bird’s Contract | English Court | Yes | [1903] 1 Ch 287 | England | Cited for the principle that under an open contract, the vendor receives the rents and profits as a trustee and must account for them to the purchaser when completion takes place. |
| Bennett v Stone | English Court | Yes | [1903] 1 Ch 509 | England | Cited for the principle that under an open contract, the vendor receives the rents and profits as a trustee and must account for them to the purchaser when completion takes place. |
| Metropolitan Railway Company v Defries | English Court | Yes | (1877) 2 QBD 387 | England | Cited for the principle that a vendor who remains in occupation must make allowance to the purchaser of a fair occupation rent from the date when the purchaser has to pay interest to the date of actual completion. |
| Gedye v Montrose | English Court | Yes | (1858) 26 Beav 45 | England | Cited for the principle that the vendor is entitled to retain possession or to take rents and profits until the actual time when the transaction is completed, and even though delay was due to the state of his title unless the contract expressly provides otherwise. |
| ZT v The Comptroller of Income Tax | Singapore Income Tax Board of Review | Yes | [2009] SGITBR 1 | Singapore | Cited for the interpretation of a similar liquidated damages provision. |
| Diestal v Stevenson | English Court | Yes | [1906] 2 KB 345 | England | Cited for the principle that an innocent party cannot claim unliquidated damages in addition to the liquidated damages which were designed to deal with the loss that has occurred. |
| Talley v Wolsey-Neech | English Court | Yes | (1978) 38 P & CR 45 | England | Cited for the principle that an innocent party cannot claim unliquidated damages in addition to the liquidated damages which were designed to deal with the loss that has occurred. |
| Aktieselskabet Reidar v Arcos Ltd | English Court | Yes | [1927] 1 KB 352 | England | Cited for the principle that the courts will allow unliquidated damages to be claimed in addition to liquidated damages if the damages which is the subject matter of the former claim arises wholly or partially from some other breach that does not fall within the ambit of the liquidated damages provision. |
| Total Transport Corp v Amoco Trading Co, The Altus | English Court | Yes | [1985] 1 Lloyd’s Rep 423 | England | Cited for the principle that the courts will allow unliquidated damages to be claimed in addition to liquidated damages if the damages which is the subject matter of the former claim arises wholly or partially from some other breach that does not fall within the ambit of the liquidated damages provision. |
| Attorney-General v Blake | House of Lords | Yes | [2001] 1 AC 268 | England | Cited as cynical breach as a ground for awarding gains made from breach of contract was deprecated. |
| Teh Guek Ngor Engelin v Chia Ee Lin Evelyn | Court of Appeal | Yes | [2005] 3 SLR(R) 22 | Singapore | Cited as cynical breach as a ground for awarding gains made from breach of contract was deprecated. |
| IBM United Kingdom Ltd v Rockware Glass Ltd | English Court | Yes | [1980] FSR 335 | England | Cited for the definition of a 'best endeavours' clause in a contract. |
| Tan Soo Leng David v Wee, Satku & Kumar Pte Ltd | High Court | Yes | [1997] 3 SLR(R) 257 | Singapore | Cited for the interpretation of a 'best endeavours' clause in the context of obtaining approval from an authority. |
13. Applicable Rules
| Rule Name |
|---|
| Order 59 Rule 2(2) of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Option to Purchase
- Best Endeavours
- Housing Development Board (HDB)
- Specific Performance
- Liquidated Damages
- Conditions of Sale
- DC Suit
- Injunction
- Completion Date
- Rental Arrears
15.2 Keywords
- option to purchase
- specific performance
- breach of contract
- best endeavours
- HDB approval
- property sale
- Singapore law
16. Subjects
- Contract Law
- Property Law
- Real Estate Transactions
- Civil Litigation
17. Areas of Law
- Contract Law
- Property Law
- Civil Procedure