Mohamed Amin bin Mohamed Taib and Others v Lim Choon Thye and Others

[1] The plaintiffs brought this application as the authorised representatives of the consenting subsidiary proprietors who held at least 80% of the share values in the condominium development known as Regent Court (Strata Title Plan No. 866) comprised in Land Lot Mukim 17-5574T, Singapore (“Regent Court”).

[2] Regent Court is a residential development consisting of 49 apartments. As at June 2005, it was more than 20 years old. On 30 June 2005, at an extraordinary general meeting of the subsidiary proprietors of Regent Court, a resolution was passed approving the collective sale of the development at a reserve price of $31m. A Sale Committee was also elected at the meeting. At a subsequent general meeting held on 16 February 2006, the reserve price was increased to $34m. By 25 August 2006, a collective sale agreement had been signed by the subsidiary proprietors of 42 out of the 49 units in Regent Court and this represented 82.53% of the total share value in the development.

[3] The collective sale first proceeded by way of a public tender. However, no bids were received within the period of the tender. Subsequently, on 24 January 2007, a company called Landquest Pte Ltd (“LPL”) offered to purchase Regent Court at the price of $34m. This offer was accepted by the Sale Committee and a sale and purchase agreement was entered into on 3 April 2007 with a company named Regent Development Pte Ltd (“the Purchaser”) as the nominee of LPL.

[4] By a written resolution of the Sale Committee dated 10 July 2007, the plaintiffs were appointed representatives for the purpose of applying to the Strata Titles Board (“the Board”) under s 84A of the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) (“the Act”) for its approval of the collective sale. This application (the “STB Application”) was filed on 20 July 2007.

[5] The defendants, who are also subsidiary proprietors of units in Regent Court, have not consented to the collective sale. They filed various objections to the application. For the purposes of these proceedings before me, the only relevant objection was that filed by the ninth and tenth defendants. Although the ninth and tenth defendants put forward four grounds of objection, in these proceedings, I was only concerned with the first objection. This was that the collective sale would cause the ninth and tenth defendants to incur a financial loss as the proceeds of sale of their lot, after any deduction allowed by the Board, would be less than the price paid for the lot. They quantified their loss as being $93,935.75.

[7] The hearing of the STB Application commenced on 3 December 2007. On 11 December 2007, the Board heard arguments on the ninth and tenth defendants’ objection on the ground of financial loss. Thereafter, the Board found that this objection had been made out and gave an oral decision dismissing the STB Application. Written grounds for the Board’s decision were delivered on 24 December 2007.

[8] On 7 January 2008, the plaintiffs filed this appeal and asked the Court for, inter alia, the following reliefs:

The ground of the appeal was that the Board was wrong in law to have dismissed the STB Application based on its reasons as set out in its Grounds of Decision dated 24 December 2007 (the “Grounds”).

[10] I now give the reasons for my decision.

[11] The relevant provisions of the Act that were in issue before me were ss 84A (7) and (8). These read:

[12] From para 18 of the Grounds, the Board appeared to have proceeded on the basis of a preliminary point in respect of the ninth and tenth defendants’ financial loss objection because two conditions had, it considered, been met:

[13] The basis of the Board’s decision to dismiss the STP Application are set out in paras 24 to 28 of the Grounds . These read:

[14] The seventh defendant and counsel for the ninth and tenth defendants made arguments in support of the Board’s position. These were broadly the same and I will summarise them together.

[15] They took two points. The first one was that there was no point of law that was raised by the appeal and therefore the court did not have jurisdiction to hear the appeal. The defendants relied on s 98(1) of the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) which provides that no appeal shall lie to the High Court against an order made by the Board except on a point of law. I did not see any merit in that argument because the main issue was the proper interpretation of s 84A of the Act and a question of statutory interpretation is always a question of law. See, for example, MC Strata Title No 958 v Tay Soo Seng [1993] 1 SLR 870 at p 875 where GP Selvam JC (as he then was) cited, with approval, the following passage from para 70 of the entry on Administrative Law in Vol 1(1) of Halsbury’s Laws of England (4 Ed, Reissue):

[16] The second point was the interpretation issue itself. The defendants asserted that by the Statement of Agreed Facts that had been placed before the Board, the plaintiffs had clearly admitted that the ninth and tenth defendants had incurred a financial loss of $93,935.75 within the meaning of s 84A(7)(a) read with s 84A(8) of the Act. They submitted further that the Board was not required or allowed to take any other factors into consideration. In support they cited the dictum of Belinda Ang J in Yeo Loo Keng v Tan Yew Lee Kevin [2007] 3 SLR 455 as follows:

[17] Applying that dictum to the present case, the defendants submitted that the plaintiffs’ argument that the Board may “supplant or vary” the statutory formula in computing financial loss by taking into consideration the undertaking given by the Purchaser was untenable. They noted that Parliament had specifically provided for an increase to be made from the proceeds of sale to an objector who suffered financial loss. By s 84A(7)(a), the Board was empowered to increase the objector’s share of the sale proceeds with the consent of the collective sale committee. By s 84A(7)(b), Parliament had set a limit to such an increase viz 0.25% of the proceeds of sale for each lot or $2,000 for each lot whichever is the higher. Parliament was at pains to make sure that each owner received a proportionate share of the proceeds of sale and it was not willing to allow any one or more owners to hold the owners to ransom. The plaintiffs were attempting to circumvent this provision by obtaining the undertaking and supplemental agreement. In effect they were trying to compel the ninth and tenth defendants to accept the Undertaking to which these defendants were not parties to and give up their statutory right not to be compelled to sell. This should not be allowed and the appeal should be dismissed.

[18] To restate, the question that was being debated was the true meaning of the “proceeds of sale for his lot”. Did this phrase refer specifically and only to the amount that an individual proprietor could expect to receive for his lot on the basis of the sale price mentioned in the sale and purchase agreement or could a wider meaning be derived from it? Upon consideration, I agreed with the plaintiffs’ submission that the interpretation of s 84A(8)(a) given to that section by the defendants and by the Board was wrong although the literal meaning of the wording of the section certainly supported the view taken by the Board. I will explain.

[19] The applicable legal principles in respect of statutory interpretation have often been considered by our courts over the past two decades. In Low Gim Siah v Law Society of Singapore [1992] 1 SLR 166, the High Court rejected the literal approach to statutory interpretation:

Instead the courts have consistently applied the purposive approach to statutory interpretation – see Low Gim Siah, Constitutional Reference No 1 of 1995 [1995] 2 SLR 201, Planmarine AG v Maritime and Port Authority of Singapore [1999] 2 SLR 1 and PP v Tsao Kok Wah [2001] 1 SLR 666. This approach is dictated by s 9A(1) of the Interpretation Act (Cap 1) (“Interpretation Act”) which mandates that when a written law is being interpreted, “an interpretation that would promote the purpose or object underlying the written law” is to be preferred to an interpretation that would not promote that purpose. The Constitution of the Republic of Singapore Tribunal which heard Constitutional Reference No 1 further made it plain that the purposive approach is to be applied even if the statutory provision in question is unambiguous and consistent with the rest of the statute.

[20] Thus, in construing s 84A(8)(a), I had first to determine what the purposes of the Act and the particular section referred to were. Section 9A(2) of the Interpretation Act expressly allows the court to refer to extrinsic materials to ascertain the meaning of statutory provisions and this includes speeches made in Parliament in relation to the legislation in question.

[21] At the Second Reading of the Bill containing the provisions for collective sales at Singapore Parliamentary Debates, Official Report (31 July 1998), vol 69 at cols 601-607, the Minister of State for Law said:

It was clear from this speech and others made in Parliament that the main purpose of the provisions relating to collective sale in the Act was to make it easier for collective sales to go through in order to promote better utilisation of scarce land resources in Singapore and also urban redevelopment.

[22] The approach the courts should take to the Parliamentary intention behind the Act has been considered many times. In one of these decisions, Ng Swee Lang v Sassoon Samuel Bernard [2007] SGHC 190, Andrew Ang J neatly encapsulated the prevailing view (after a thorough review of the authorities) in the following passages:

[23] Even when considering the safeguards put in place to protect individual owners in ss 84A(7) to (9) of the Act, it appears that the approach taken by Parliament was that the Board was required to approve the collective sale unless specific grounds had been established by the objectors. Section 84A(7) states in imperative terms that “the Board shall, subject to subsection (9) … approve the application … and order that the lots and common property … be sold unless … the Board is satisfied that” any minority owner will suffer, inter alia, a financial loss.

[24] It is worthwhile noting that in explaining the safeguards in the Act, the Minister of State for Law said in Parliament at the Second Reading that:

[25] Whilst it is plain from the above speech that Parliament was concerned that an owner in an en-bloc sale should not lose out financially by reason of that sale, that does not mean that only a literal approach to s 84A(7) would achieve that purpose. The Board’s view was that in order to determine whether any objector would incur a “financial loss” within the meaning of that term in s 84A(7), the “proceeds of sale” referred to in s 84A(8) meant strictly the proportion of the sale price in the collective sale agreement which was payable to that objector and would not include any additional amount (not mentioned in the sale and purchase agreement) which the purchaser had agreed to pay the objector.

[26] The plaintiffs, however, argued that the approach taken by the Board in construing s 84A(8) undermined the legislative purpose behind the Act and was also highly prejudicial to the public interest in that it would unreasonably hinder en-bloc sales. This was because since property prices are not flat but rise and fall over time, it is conceivable that in any development there will be at least one subsidiary proprietor who had purchased his unit when the price was much higher than at the time of the en-bloc sale and would therefore suffer a “financial loss” if the development was subject to such a sale. In these circumstances, even if 99% of the subsidiary proprietors supported the sale and only the person who was liable to lose money objected, the sale could not go through unless:

The plaintiffs therefore submitted that on the Board’s interpretation of ss 84A(7) and 84A(8) any subsidiary proprietor with a paper loss of any amount would be entitled to refuse any offer made to compensate him, and thereby prevent the collective sale from going through. In the plaintiffs’ submission, the proper and purposive interpretation of “proceeds of sale for his lot” under s 84A(8) would be that this phrase referred to the moneys which the ninth and tenth defendants would receive for their lot upon the completion of the collective sale. Such an interpretation would allow the Board to take into account all offers of compensation and therefore reach a more equitable result which would also promote the objective of the Act.

[27] I accepted the above submission. I considered that the legislature would not have intended the adverse consequences to future en-bloc sales that would arise from a strict construction of “proceeds of sale”. I also agreed that the interpretation propounded by the plaintiff was not a strained interpretation of the Act. There was no reason why “proceeds of sale” should be limited to simply looking at the “purchase price” set out in the sale and purchase agreement. Adopting the wider interpretation would further the legislative purpose of the Act by taking into account efforts to make good the financial loss of individual subsidiary proprietors and to ensure that no individual subsidiary proprietor would be prejudiced by the collective sale. If the objecting subsidiary proprietor would still suffer a financial loss despite the compensation sum offered, then the Board would have to dismiss the application and none of the other subsidiary proprietors could complain about this. On the other hand, if the objecting subsidiary proprietor’s financial loss would be fully met by the compensation sum, then there would be no basis to continue to object to the en-bloc sale. As the Act is structured, it does not require that all the subsidiary proprietors should make a profit from the en-bloc sale. It only mandates that no one should make a financial loss. This is plain from s 84A(8)(b) which provides that it is not a financial loss if any subsidiary proprietor makes less profit from the sale of his lot than the others do.

[28] Adopting such an interpretation means that the Board would be entitled to consider not only the sale and purchase agreement but also the Undertaking and the supplemental agreement in deciding whether or not the ninth and tenth defendants had suffered “financial loss” under the Act. In my view, the Board was, accordingly, wrong in law to decide that it could not look at these additional documents simply because they were extrinsic to the sale and purchase agreement.

[29] There was an argument that the Board could not consider the undertaking because this document was not enforceable by the ninth and tenth defendants. That argument was misplaced. Under s 84A(11) of the Act, the Board has the power to make any order and to give any direction “as may be necessary or expedient” to give effect to an order made under s 84A(7) for the collective sale of the development. This section empowers the Board to facilitate the en-bloc sale in any way necessary and therefore the Board would have had the power, had it wished to exercise it, to allow the sale to go through subject to the purchaser (which had already indicated its willingness to compensate the ninth and tenth defendants) entering into a binding agreement with the ninth and tenth defendants to make good the financial loss sustained by them. It could also order the purchaser to pay the compensation moneys to someone to hold as stakeholders pending the completion of the sale and purchase so that there would be no worry about default on the part of the purchaser.

[31] For the reasons given above, I concluded that the Board had made an error of law when it dismissed the Statutory Application before hearing all the evidence. I therefore made the orders that I did. I should reiterate here that this judgment deals only with the evidence that the Board is entitled to consider in determining the objections of the ninth and tenth defendants. It should not be read as mandating the conclusion the Board should come to once it has received all relevant evidence and heard the parties’ submissions.