FLJ Property Pte Ltd v Heritage Hotel Pte Ltd

Parties

Procedural Posture

Originating Summons Specific Performance / Contract Dispute / High Court Judgment at First Instance

Legal Issues

1. 1 Whether clause 18 in the Option to Purchase entitled the vendor to rescind the sale agreement for 'difficulty or expense' in paying the HDB assignment fee
2. 2 Whether clause 18 operates to qualify or negate the vendor's express obligation under clause 17(v) to perform HDB conditions and bear associated costs
3. 3 Whether the vendor was deemed to know the lease terms that gave rise to the assignment fee

Ratio Decidendi

Clause 17(v) expressly made the vendor responsible for performing HDB conditions and bearing associated costs; clause 18 could not be invoked to rescind for a fee that was known or ascertainable to the vendor at the time it granted the Option; the right to rescind under clause 18 is subject to an objective reasonableness standard and the vendor's surprise or subjective unwillingness was unreasonable and amounted to recklessness; therefore the vendor's notice of rescission was invalid and specific performance was ordered.

Court Disposition

Plaintiff's application allowed: defendant's notice of rescission declared invalid; sale agreement declared subsisting and binding; order for specific performance and payment of assignment fee and costs against defendant.

Orders

• Defendant's notices dated 15 July 2011 and 19 July 2011 purporting to rescind the Option to Purchase declared invalid
• Sale agreement declared to subsist and bind the parties