Choo Liang Haw v Chua Seet Mui: Collective Sale Dispute over Gilstead Court Penalty Clauses

In Choo Liang Haw @ Choo Liang Hoa and others v Chua Seet Mui and others, the High Court of Singapore addressed a dispute concerning the collective sale of Gilstead Court. The plaintiffs, members of the Collective Sales Committee (CSC), sought declarations regarding the applicability of penalty clauses in the Collective Sale Agreement (CSA) to non-signatory subsidiary proprietors (SPs). The court, presided over by Quentin Loh J, ultimately approved the collective sale, but struck down the penalty clauses and modified the interest rate on contributions. The court dismissed claims against Gary Darwin and addressed issues of authority within the CSC. The court ordered that costs and expenses for the collective sale, other than costs of the proceedings before the Strata Titles Board and this Court, shall be paid by all SPs proportionately to their share according to their unit share value and area as set out in Schedule 4 to the CSA.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Order for collective sale granted, subject to striking out penalty clauses and modifying interest rate.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Collective sale dispute involving Gilstead Court. The court addressed objections to penalty clauses in the Collective Sale Agreement and approved the sale.

1.7 Decision Date

12 February 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Pan Xingzheng Edric	Defendant	Individual	Settlement Reached	Settled
LIM LI MENG DOMINIC	Defendant	Individual	Order for collective sale granted	Lost	Adrian Tan of Stamford Law Corporation Roy Mukkam of Stamford Law Corporation
LIM SUI MAY PETRINA	Defendant	Individual	Order for collective sale granted	Lost	Adrian Tan of Stamford Law Corporation Roy Mukkam of Stamford Law Corporation
SALLY CHING PUI SIM	Plaintiff	Individual	Order for collective sale granted	Won	Josephine Low of Michael Khoo & Partners Andy Chiok of Michael Khoo & Partners Michael Khoo of Michael Khoo & Partners Joel Yeow of Michael Khoo & Partners Ong Lee Woei of Michael Khoo & Partners
WARREN KHOO	Plaintiff	Individual	Order for collective sale granted	Won	Josephine Low of Michael Khoo & Partners Andy Chiok of Michael Khoo & Partners Michael Khoo of Michael Khoo & Partners Joel Yeow of Michael Khoo & Partners Ong Lee Woei of Michael Khoo & Partners
Choo Liang Haw @ Choo Liang Hoa	Plaintiff, 13th Defendant	Individual	Claims dismissed	Dismissed	Naidu Devadas of Metropolitan Law Corporation Lim Seng Siew of Metropolitan Law Corporation
Loke Wan Tche	Plaintiff	Individual	Claims dismissed	Dismissed	Naidu Devadas of Metropolitan Law Corporation Lim Seng Siew of Metropolitan Law Corporation
Charles Ng Pooh Cheok	Plaintiff	Individual	Claims dismissed	Dismissed	Naidu Devadas of Metropolitan Law Corporation Lim Seng Siew of Metropolitan Law Corporation
Lok Kok Poh	Plaintiff	Individual	Claims dismissed	Dismissed	Naidu Devadas of Metropolitan Law Corporation Lim Seng Siew of Metropolitan Law Corporation
Chua Seet Mui	Defendant	Individual	Order for collective sale granted	Lost	Adrian Tan of Stamford Law Corporation Roy Mukkam of Stamford Law Corporation
Loke Ah Meng	Defendant	Individual	Order for collective sale granted	Lost	Adrian Tan of Stamford Law Corporation Roy Mukkam of Stamford Law Corporation
Soh Lay Bee	Defendant	Individual	Order for collective sale granted	Lost	Adrian Tan of Stamford Law Corporation Roy Mukkam of Stamford Law Corporation
Koh Nai Hock @ Koh Chou Toh	Defendant	Individual	Order for collective sale granted	Lost	Adrian Tan of Stamford Law Corporation Roy Mukkam of Stamford Law Corporation
Quek Chia-Min Valeria	Defendant	Individual	Settlement Reached	Settled
Dillenia Land Pte Ltd	Defendant	Corporation	Specific performance ordered	Consent	Jaikanth Shankar of Drew & Napier LLC Davinder Singh of Drew & Napier LLC Jarod Kok of Drew & Napier LLC
Gary Michael Darwin	14th Defendant	Individual	Claims dismissed	Dismissed	Rakesh s/o Pokkan Vasu of Gomez & Vasu LLC Winnifred Gomez of Gomez & Vasu LLC

3. Judges

Judge Name	Title	Delivered Judgment
Quentin Loh	Judge	Yes

4. Counsels

Counsel Name	Organization
Adrian Tan	Stamford Law Corporation
Roy Mukkam	Stamford Law Corporation
Josephine Low	Michael Khoo & Partners
Andy Chiok	Michael Khoo & Partners
Michael Khoo	Michael Khoo & Partners
Joel Yeow	Michael Khoo & Partners
Ong Lee Woei	Michael Khoo & Partners
Naidu Devadas	Metropolitan Law Corporation
Lim Seng Siew	Metropolitan Law Corporation
Jaikanth Shankar	Drew & Napier LLC
Davinder Singh	Drew & Napier LLC
Jarod Kok	Drew & Napier LLC
Rakesh s/o Pokkan Vasu	Gomez & Vasu LLC
Winnifred Gomez	Gomez & Vasu LLC

4. Facts

The case involves the collective sale of Gilstead Court, a condominium development with 48 units.
An earlier attempt at a collective sale between 2005 and 2007 was aborted.
The Collective Sales Committee (CSC) was appointed on 12 April 2008.
The Collective Sale Agreement (CSA) contained penalty clauses applicable to SPs who did not sign the agreement.
The requisite majority of 80% of SPs signed the CSA by 8 July 2012.
Dillenia Land Pte Ltd (DLPL) submitted the only compliant bid of $150,168,000, which was accepted on 17 June 2013.
DLPL offered $135,000 to relieve non-signatory SPs of their liability under the penalty clauses.
The STB issued a stop order, leading to the filing of OS 941 and OS 982 in the High Court.

5. Formal Citations

Choo Liang Haw @ Choo Liang Hoa and others v Chua Seet Mui and others and another matter, Originating Summons Nos 941 and 982 of 2013, [2015] SGHC 47

6. Timeline

Date	Event
2005-01-01	First attempt at collective sale of Gilstead Court
2007-01-01	First attempt at collective sale aborted
2008-04-12	Collective Sales Committee appointed
2009-09-05	Sally Ching appointed chairperson, Warren Khoo secretary, and Choo Liang Haw treasurer of the CSC
2010-04-10	CSC given power to appoint architects
2011-05-01	Preliminary draft of CSA circulated to SPs
2011-07-02	Revised draft of CSA presented at meeting
2011-07-09	Final version of CSA released, signature procurement commenced
2011-09-08	SPs of 27 units signed the CSA
2012-04-05	Marketing agent appointed
2012-04-07	Appointment of marketing agent announced
2012-07-08	SPs of 43 units signed the CSA
2013-02-01	Exco took control of marketing activity
2013-05-01	Tender launched
2013-06-03	Tender closed
2013-06-17	DLPL's bid accepted
2013-07-01	Notice of Proposed Application issued
2013-07-04	Application to STB submitted
2013-07-17	Non-signatory SPs filed objections with the STB
2013-09-12	DLPL offered to contribute $50,000 towards STB costs
2013-09-19	Second session before the STB
2013-09-25	DLPL made a second offer of $100,000
2013-09-26	DLPL made a third offer of $135,000
2013-10-01	Third session before the STB; STB issued a stop order
2013-10-07	OS 941 filed in High Court
2013-10-16	OS 982 filed in High Court
2013-11-22	Requisition for an Extraordinary General Meeting submitted
2014-01-11	General meeting held
2014-02-14	Choo Liang Haw removed as plaintiff and added as 13th defendant in OS 982; Gary Michael Darwin added as 14th defendant
2014-02-17	Amended OS 982 filed
2014-02-18	Affidavit in support of OS 982 filed
2014-02-20	CSC meeting held
2014-03-04	Summons No 1126 of 2014 filed to strike out OS 982
2014-03-05	Summons No 1169 of 2014 filed to strike out portions of OS 982
2014-04-03	Gary Darwin applied to strike out prayers 13 and 14 of OS 982
2014-04-07	Parties appeared before the court
2014-07-07	Parties appeared before the court; mediation encouraged
2014-08-11	Parties appeared before the court; settlement reached with 1st and 2nd defendants of OS 982
2014-08-22	Summons No 4148 of 2014 filed to amend OS 982
2014-08-25	Parties appeared before the court; application to amend OS 982 dismissed
2014-09-01	Parties appeared before the court; striking out application dismissed; plaintiffs given leave to withdraw prayers eight and nine of OS 982
2014-11-03	Parties appeared before the court; Gary Darwin's case to strike out prayers 13 and 14 of OS 982 heard
2014-11-10	Plaintiffs in OS 982 filed a further affidavit exhibiting documents
2015-02-13	Judgment reserved

7. Legal Issues

Enforceability of Penalty Clauses in Collective Sale Agreement
- Outcome: The court held that the penalty clauses (clauses 7.5 and 11) were unenforceable and struck them out.
- Category: Substantive
- Sub-Issues:
  - Validity of default contribution clause
  - Validity of abuse of process clause
  - Unjust enrichment
Good Faith in Collective Sale Transactions
- Outcome: The court found that the transaction was in good faith, despite the presence of the unenforceable penalty clauses.
- Category: Substantive
- Sub-Issues:
  - Coercion of signatory SPs
  - Transparency of tender process
  - Illicit payments
- Related Cases:
  - [2009] 3 SLR(R) 109
Authority to Commence Legal Proceedings
- Outcome: The court found that the proceedings were commenced in an unsatisfactory manner, but declined to derail the sale on this technicality.
- Category: Procedural
- Sub-Issues:
  - Proper representation of signatory SPs
  - Ratification of actions by office bearers

8. Remedies Sought

Order for Sale
Declaration of Validity of Clauses
Damages
Specific Performance
Injunction

9. Cause of Actions

Breach of Contract
Declaratory Relief
Enforcement of Collective Sale Agreement

10. Practice Areas

Real Estate Law
Commercial Litigation

11. Industries

Real Estate

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Ng Swee Lang and another v Sassoon Samuel Bernard and others	Court of Appeal	Yes	[2008] 2 SLR(R) 597	Singapore	Cited for the principle that the court should not allow a technical objection to frustrate the wishes of the majority where no prejudice is suffered.
Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others	N/A	No	[1997] 3 SLR(R) 649	Singapore	Cited for the principle that a striking out application requires a plain and obvious case.
Chua Choon Cheng and others v Allgreen Properties Ltd and another appeal	Court of Appeal	Yes	[2009] 3 SLR(R) 724	Singapore	Cited for the principle that the law does not prohibit incentive payments per se in collective sales.
Ng Eng Ghee and others v Mamata Kapildev Dave and others (Horizon Partners Pte Ltd, intervener) and another appeal	N/A	No	[2009] 3 SLR(R) 109	Singapore	Cited for the principle that breach of a contractual clause does not ipso facto translate to bad faith vitiating the transaction.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 100 r 2(1)
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 100 r 3
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 100 r 4
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 7 r 5
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 6 r 4

14. Applicable Statutes

Statute Name	Jurisdiction
Land Titles (Strata) Act (Cap 158, 2009 Rev Ed) s 84A	Singapore
Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Collective Sale
Collective Sale Agreement
Subsidiary Proprietors
Penalty Clauses
Strata Titles Board
Good Faith
Default Contribution
Abuse of Process
Illicit Payments
Stop Order

15.2 Keywords

Collective Sale
Strata Title
Penalty Clauses
Gilstead Court
Singapore
Real Estate
En bloc sale

17. Areas of Law

Area Name	Relevance Score
Collective Sales	85
Property Law	75
Strata Titles	70
Contract Law	65
Real Estate Transactions	60
Civil Procedure	50
Company Law	30
Bankruptcy	20

16. Subjects

Collective Sale
Strata Title
Real Estate
Contract Law