Housing & Urban Development Co (Pte) Ltd

- vs -

Mah

Judgment

Wee Chong Jin CJ

1. The Housing and Urban Development Co (Pte) Ltd (HUDC as it is more commonly known) has as its principal object to develop and maintain housing for the middle income group. One of its earlier developments is Laguna Park which comprises five high rise blocks of flats and two blocks of walk-up apartments, construction of which began in 1975 and completed in 1977.

2. Housing developers are subject to the Housing Developers (Control and Licensing) Act 1965 (the Act) which was enacted to protect the public by controlling the forms of contract into which licensed developers might enter with purchasers.

3. In exercise of the powers conferred by s 21 of the Act the Minister for Law and National Development made the Housing Developers Rules 1965 (the Rules) and the Housing Developers (Amendment) Rules 1967. Rule 9A, so far as material, provides as follows:

   (1)	An agreement for sale between a housing developer and a purchaser shall be … in the case of a flat in the form prescribed in Sch B to these Rules.
   (2)	No amendment, deletion or alteration to any such form shall be made except with the approval of the Controller.

4. Rule 11 provides as follows:

   Any licensed developer who contravenes any of the provisions of these Rules shall be guilty of an offence and shall be liable on conviction to a fine … or to imprisonment …

5. Section 21(2) of the Act gives power to the Minister to make rules providing for:

   (e)	the conditions, which if used in any contract between a licensed housing developer … and a purchaser, shall be void.

6. In April 1975 HUDC sent to the Controller of Housing a draft agreement for sale and draft lease for the Controller’s approval in respect of its Laguna Park development which contained a clause (cl 12) which is not prescribed in Sch B of the Rules. The material provisions of cl 12 read as follows:

   The Purchaser who has taken possession of the said flat before the date of completion of the sale and purchase herein shall pay to the Vendor a monthly maintenance and service fee of approximately $50 per month for the first year of possession; and the Vendor or the Management Corp established under the Land Titles (Strata) Act shall be at liberty to revise the maintenance and service fees herein upon giving three months’ prior notice in writing for the Vendor …

7. On 22 May 1975 the Controller approved, with some immaterial alterations, the draft agreement for sale.

8. On 19 March 1976 HUDC entered into a sale and purchase agreement with the respondents, a married couple, to purchase a flat in Laguna Park. Clause 12 of the agreement of 17 March 1976, however, was not in the precise terms approved by the Controller in that the words ‘or the Management Corp established under the Land Titles (Strata) Act’ do not appear in cl 12 of 17 March 1976 agreement.

9. The respondents took possession of the flat in August 1977 and in January 1978 HUDC requested the respondents to pay maintenance and service fees at the rate of $50 per month with effect from 1 January 1978. The respondents have paid the maintenance and service fees for the months from February to November 1978 and are in arrears of $100 being the unpaid fees for January 1978 and December 1978. The respondents have also paid the maintenance fees for the year 1979 but have not paid any maintenance fees from January 1980 onwards.

10. The main issue in this appeal is whether the omission by HUDC from cl 12 of 12 March 1976 agreement of the words ‘or the Management Corp established under the Land Titles (Strata) Act’ which appear in cl 12 of the draft agreement for sale approved by the Controller, prevents them from enforcing their right to payment by the respondents of the arrears of the maintenance and service fees.

11. The respondents’ case is that by deviating from the approved cl 12, HUDC have contravened r 9A(1) and (2) of the Rules as amended and by r 11 are guilty of a statutory offence so that the court will not enforce the agreement relating to the maintenance and service fees which is made illegal by the Rules.

12. In my opinion the fallacy in the respondents’ case is the assumption that on the facts HUDC have contravened r 9A(1) and (2) and are guilty of an offence punishable under r 11. In the first place, r 9A(1) of the Rules as amended obliges all agreements for sale of a flat between a housing developer and a purchaser to be in the form prescribed in Sch B. If a housing developer desires to deviate in any manner from the form prescribed in Sch B, r 9A(2) enables him to do so provided he has the approval of the Controller of Housing.

13. The form prescribed in Sch B contains no clause providing for payment of maintenance and service fees by a purchaser who has taken possession of a flat before completion. In the present case the Controller’s approval was obtained for such a clause (cl 12) to be included in the agreement for sale.

14. The facts are that although the agreement for sale between HUDC and the respondents were not on all fours with the form prescribed in Sch B to the Rules, it was in the form approved by the Controller except the omission of the words ‘Or the Management Corp established under the Land Titles (Sub-Strata) Act’ which appear in cl 12 of the approved form. The respondents have not alleged or proved that there was in fact ‘a Management Corp established under the Land Titles (Strata) Act’ in respect of the Laguna Park development. In my opinion, it is clear that the Controller did approve the incorporation in the agreement of sale between the parties of a provision whereby monthly maintenance and service fees of approximately $50 were payable for the first year of possession, and whereby HUDC could revise the maintenance and service fees upon giving three months’ prior notice in writing.

15. It follows, in my opinion, that HUDC had not contravened any of the provisions of the Rules by the omission of those words from its agreement of sale with the respondents and on the facts of the present case the principle that ‘no system of jurisprudence can with reason include amongst the rights which it enforces rights directly resulting to the person asserting them from the crime of that person’ does not apply.

16. The second issue is whether on the true construction of cl 12 of the agreement for sale, HUDC were only entitled to recover the maintenance and service fees for the first five years of possession and not for the period between the end of the first year of possession and the date of the execution of the lease itself.

17. The material words of cl 12 read as follows:

    The Purchaser who has taken Possession of the said Flat before the date of completion of the lease herein shall pay to the Vendor a maintenance and service fees of approximately $50 per month payable on the first day of each and every calendar month for the first year of Possession; and the Vendor shall be at liberty to revise the maintenance and service fees herein upon giving three months’ Prior notice in writing to the Purchasers …

18. The respondents’ case is that the clause is ambiguous and the contra proferentem rule is applicable. Their contention is that the clause is ambiguous as it could mean either that the maintenance and service fees of approximately $50 per month and any revised fees were payable only during the first year of possession or could mean that the maintenance and service fees of approximately $50 per month were payable during the firs year of possession but thereafter could be revised upon three months’ prior notice in writing to the purchaser.

19. In approaching the task of construction of the terms of a written agreement ‘the common and universal principle ought to be applied; namely, that an agreement ought to receive that construction which its language will admit, and which will best effect the intention of the parties, to be collected from the whole of the agreement, and that greater regard should be had to the clear intention of the parties than to any particular words which they may have used in the expression of their intent’ (see Ford v Beech (1848) 11 QB 852, 866; 116 ER 693). And, as no contract is made in a vacuum, in construing a term in a written agreement, a court must always have regard to its commercial purpose and the factual background against which it was made.

20. Applying these principles, in the present case it is plain that the parties intended under Cl 12 that during the first year of possession under the agreement for sale the maintenance and service fees payable would be ‘approximately $50 per month’ and that thereafter the fees could be revised by the vendor (HUDC) upon his giving three months’ prior notice in writing to the purchasers (the respondents).

21. Furthermore, in my opinion, the words in question in cl 12 are unambiguous and their meaning is clear, namely, that during the period when the purchaser is in possession of the flat until the date of completion of the lease which is annexed to the agreement for sale, he shall pay to the vendor during the first year of possession, maintenance and service fees of approximately $50 per month and, after the first year of possession, the said maintenance and service fees may be revised by the vendor upon giving to the purchaser three months’ prior notice in writing of his intention to do so.

22. Accordingly, the appeal is allowed with costs here and in the court below. The appellants are entitled to judgment in respect of all unpaid maintenance and service fees.

Cases

Ford v Beech (1848) 11 QB 852; 116 ER 69

Legislations

Housing Developers (Control and Licensing) Act 1965: s. 21(2), Sch B

Land Titles (Strata) Act (Cap 277)

Housing Developers (Amendment) Rules 1967: R. 9A(1), (2), R. 11

Housing Developers Rules 1965.

Representation

J Grimberg and D Daniel (Boswell, Hsieh & Lim) for the appellants.

Tommy Neo and Ong Mung Pang (Mak, Ong & Partners) for the respondents.