Wei Tah Construction (B) Co Sdn Bhd

- vs -

Law

Judgment

Yusoff Mohamed J

1. The second plaintiff’s claim was settled before trial of this action and the remaining dispute is between the first plaintiff and the defendants.

2. The proprietor of the first plaintiff’s company which owned a house in Kuching had put out the house for sale. The house and land was described as lot 1629 Block 195 Kuching North Land District. The first defendant was the owner of lot 1305 Seduan Land District at Sibu (Sibu land) comprising an area of 11.47 acres. The second defendant is the husband of the first defendant.

3. On 14 February 1974 two brokers met the plaintiff. They wanted to buy his house and at the same time wanted to sell him a piece of land described to him as ‘near the airport at Sibu’. The price was $75,000.

4. Next day, 15 February 1974 the brokers returned with a businessman named Siew who offered to buy the Sibu land for $94,000. After they left the plaintiff went to see the manager of Hock Thai Finance Co who had telephoned him that the owner of the Sibu land wanted to sell it at $75,000 and that the owner was with him. The plaintiff met the first defendant there who expressed an interest to buy a house in Kuching and to pay for it from the proceeds from the sale of her land. The plaintiff inspected the title of the land (exh P1A) which was kept by the Finance Company. Then he took the first defendant to inspect his house which the first defendant agreed to buy at $38,000. He then sent the first defendant back to the Finance Company.

5. On returning to his office the plaintiff instructed his solicitor to make a search on the title of the Sibu land.

6. That same afternoon the brokers and Mr. Siew met the plaintiff again. An agreement was made between the plaintiff and Mr. Siew that the latter would purchase the land at Sibu from the plaintiff at the price of $94,000 and the transfer was to be effected on Monday 18 February 1974.

7. The agreement is as follows:

   Kuching 15 February 1974 Received from Mr. Siew Meu Chiong of No 15, Ramin Street, Sibu the sum of Dollars two thousand only ($2,000) being deposit for purchase of Lot 105 Seduan Land District 11.47 acres, Sibu. The selling price is $94,000 and it is agreed that the balance to be paid in full on transfer on Monday 18 February 1974. It is also agreed that if the buyer did not or fail to come for the transfer then the said sum of deposit of $2,000 will be forfeited to the seller. In the event if the seller refused to transfer of the said Land, the seller will pay $4,000 as liquidated damages. Sgd Witness WEI TAH CONSTRUCTION (B) SDN Sgd Managing Director

8. The following morning, 16 February 1974 the plaintiff went to the manager of Hock Thai Finance Co’s office again after he was informed that the first defendant was there. He took the first defendant to his solicitor’s office and there he instructed the solicitor to prepare the document of transfer of the Sibu land to him after, he said, the first defendant had assured him that the land was ‘near the Sibu airport’. He also instructed the solicitor to prepare another document transferring his house to the first defendant. After that he sent the first defendant back to the Finance Company.

9. At 11.00 o’clock the same morning he was called by his solicitor to be in his office. When he went there he met the first defendant who his solicitor said, wanted to return to Sibu. At this time, the plaintiff alleged that the first defendant told him that the Sibu land was only 500 yards away from the airport. He said that he did not believe her assurance but he paid the first defendant $37,000 in cheque and also executed the transfer of his house to the first defendant in exchange for the Sibu land. The first defendant signed the document transferring the Sibu land to him.

10. A week later Mr. Siew telephoned the plaintiff from Simanggang but never appeared to take the transfer of the Sibu land. At the same time plaintiff sent his employee to inspect the Sibu land which was shown to him by the second defendant. He discovered that the land was eight to nine miles away from the Sibu airport. Following this the plaintiff instructed his solicitor to repudiate the transfers of both the Sibu land and his house.

11. From this sequence of events it would not be difficult to determine at what stage of the negotiation the plaintiff decided to purchase the Sibu Land but the question is whether he acted on the alleged misrepresentation when he made that decision which induced him to buy the land.

12. Apparently the plaintiff negotiated with two sources to purchase the land. Firstly with the brokers and secondly with the first defendant and the manager of the Finance Company. However he decided to purchase the land when he entered into agreement with Mr. Siew that the latter would purchase it from him with some margin of profit for himself. Under cross-examination the plaintiff agreed that he was motivated by profit when he entered into negotiation with first defendant and when re-examined, he maintained that he had intended to acquire the Sibu land when this agreement was signed.

13. At this point of time, in the morning of 15 February 1974 the first defendant had not represented anything to him regarding the location of the land. His first meeting with the first defendant at the Finance Company’s office confined to inspection of the land title, negotiation of its price and the price of his house for the purpose of exchange. The brokers had represented to him on 14 February 1974 that the Sibu land was near the airport. This representation cannot be attributed to the first defendant. There is no evidence to show that the first defendant was involved with the two brokers or that these brokers were sent by her.

14. In order to implicate the first defendant in his dealing with the brokers the plaintiff alleged that someone identifying himself as the husband of the first defendant telephoned him about the price of the Sibu land after the brokers had left him on 14 February. There is however, no evidence adduced to identify the caller was in fact the first defendant’s husband (second defendant). On the contrary, his employee (PW2) said that the second defendant went to the plaintiff’s office on 14 February to sell the Sibu land and this clearly contradicts the plaintiff’s own evidence. The second defendant in turn has shown by hotel and purchase receipts that he was in Simanggang and Lingga more than 100 miles away, between 13 and 15 February 1974 (exhs D1 & D2 A to C).

15. Having regard to these circumstances, in my view, there was no representation in any way made by the first or second defendant which induced the plaintiff to purchase the Sibu land at that stage of the negotiation.

16. Even assuming that the plaintiff relied on the description of the land as ‘near Sibu airport’ which induced him to purchase it, which description is attributed to the first defendant, it is apparent from the evidence that he was not misled by that statement. The plaintiff had earlier instructed his solicitor to investigate the title and in consequence of this investigation the plaintiff was advised that the Sibu land was a good buy. It would therefore appear that the plaintiff rested his judgment on his solicitor’s advice rather than from the first defendant.

17. In Holmes vJones (1907) 4 CLR 1692 @ 1702 Griffith CJ said:

    It appears to me to be common sense as well as law that, when a purchaser chooses to rely upon his own judgment or upon that of his agent, he cannot afterwards say that he relied upon a previous representation made by the vendor.

18. In this case it appears to me that the plaintiff trusted his own inquiries rather than the representation made by the first defendant — see Redgrave v Hurd (1881) 20 Ch D 1.

19. Paragraph 4(c) of the statement of claim alleges that the plaintiff was induced by the representation that the land was “500 yards from the Sibu airport”, when he had the exchange effected and the sum of $37,000 paid to the defendants. This representation was alleged to have been made by the first defendant at the plaintiff’s solicitor’s office when the documents of transfers exchanging the Sibu land and the plaintiff’s house were effected. The first defendant denied having made the purported statement.

20. In my view, it is not likely that the first defendant made the statement alleged. It was not necessary. The plaintiff had already decided to buy the land long before the transfer documents were executed, on that Saturday morning, 16 February 1974. He had the advice of his solicitor and had instructed the solicitor to prepare the documents before meeting the first defendant on this occasion. He had earlier entered into agreement with Mr. Siew to transfer the land to him on Monday, 18 February 1974, failing which he would have to pay $2,000 in damages and also to refund the deposit of $2,000. The bargain would nett him a profit of $19,000. On these considerations, in my opinion, the plaintiff would execute the transfer documents with the first defendant irrespective of whatever representations made by the first defendant because he did not intend to keep the land, for himself and did not have to rely on those representations. He was gullible and admitted to be profit-motivated.

21. Lastly and in the alternative, the plaintiff sought to avoid the contract on mistake or non disclosure of material facts. The defect which the plaintiff seeks to rely here is a patent defect of quality of the land he purchased. Patent defects are such as are discoverable by inspection and ordinary vigilance on the part of the purchaser and to quote Halsbury’s Laws of England 3rd Ed vol 34 p 212:

    the rule is caveat emptor; a purchaser should make inspection and inquiry as to that which he is proposing to buy. If he omits to ascertain whether the land is such as he desires to acquire, he cannot complain afterwards on discovering defects of which he would have been aware if he had taken ordinary steps to ascertain its physical condition; and, although as a general rule a vendor must deliver property corresponding to the description contained in the contract, yet an error in the particulars or description of the property in the contract is not a ground of objection if it is readily corrected on inspection.

22. It is very obvious in the present case that the plaintiff had chosen not to inspect the land before executing the transfer with the first defendant in view of his other considerations in making a quick profit and in this regard he cannot now complain on discovering the defects after his venture with Mr. Siew has failed.

23. In Svanosio vMcNamara (1956–57) 96 CLR 186 @ 207 it was said that:

    It may be possible in exceptional cases to obtain relief on the ground of common mistake after a contract for the sale of land has been completed. But the cases must be very rare. They are unlikely to go beyond cases where there has been a total failure of consideration.

24. In my judgment, this is not one of those rare cases where mistake can be pleaded successfully and certainly there has been no failure of consideration here. The plaintiffs claim must necessarily fail and is therefore dismissed.

25. Based on the same facts, the first defendant’s counter-claim should succeed and it is ordered that the transfer of the house and land described as lot 1629 block 195 Kuching North Land District be effected in favour of the first defendant. There is no evidence advanced on purported damages sustained by the first defendant as house rent for the period claimed and in this event the prayers at para (b) and (c) of the counter-claim fail.

26. The defendants will have the costs of this action.

Cases

Holmes v Jones (1907) 4 CLR 1692; Redgrave v Hurd (1881) 20 Ch D 1;Svanosio v McNamara (1956-57) 96 CLR 186

Authors and other references

Halsbury’s Laws of England 3rd Ed

Representations

Patrick Tan for the plaintiff.

Nicholas Tang for the defendants.