8 Requisitions On Title

LECTURE 8: Investigation of Title; Requisitions on Title Why do this - Check title – otherwise face neg suit/ appearance before inquiry committee to ans for proff misconduct Outline: I. Purpose of Purchaser’s Requisitions on Title a. Explain what Requisitions on Title are – related to investing of title because these are qn posed wrt title and may be unanswered after investigation – so put these qn to vendor II. Time Frames for sending Requisitions on Title & Failure to send Requisitions on title III. Vendor’s Duties IV. Purchaser’s Duties V. Deducing Good Title a. Describe what a good root of title is b. Explain how to establish a good title VI. Unreasonable Requisitions on Title – Vendor’s right to recession under Conditions 5 of Law Soc Conditions of Sale 1999 and the Parties Rights under s4 CLPA) o – vendor can rescind contract if purchaser asks for sth unreaosnable GOOD TITLE A ‘good root of title’ has been described as an instrument of disposition --which must deal with or prove on the face of it, without extrinsic evidence, the ownership of the whole legal and equitable estate in the property sold, contain a description by which the property can be identified (description cannot be incomplete or erroneous), and show nothing to cast any doubt on the title of the disposing parties. (From Williams on Purchaser and Vendor) – must have tite to dispose Deducing good title – to est unbroken chain of links that link back at lst 15 yrs to good root  How to check – A passes to b to c to d

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To ensure that chain holds true, must look at deed – was whole legal and equitable estate properly passed fr a to b – any info needed to show that a had proper capacity and power or authority to pass title?

Deducing good title Good root of title. S 3(4) CLPA – 15 years back or Crown/State Grant whichever is the shorter. Period of limitation for title to be deduced. 3(4) A purchaser of land shall not be entitled to require a title to be deduced for a period of more than 15 years or for a period extending further back than a grant or lease by the Crown or the State, whichever period is the shorter

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A good root of title is a conveyance for good value or mortgage. A good title may not be a perfect title but must be a marketable title and in sufficient order. Smith v Morrison [1974] 1 All ER 957. o Facts

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In September 1970 P agreed to buy M's farm. He paid a deposit and signed a memorandum. In November 1970 C signed a formal contract with M for the purchase of the farm. C knew that M had received a deposit from S but thought it to be returnable. On December 5 C applied for official searches. On December 11 S issued a writ. The following day, without knowledge of that fact (writ), C lodged application for cautions against dealing with the farm. C completed the purchase on December 13. On December 18 C's transfer was lodged for registration and on January 1, 1973 S's applications for cautions, lodged on December 12, were cancelled, as having come too late to affect C's priority.

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S challenges the validity of C’s registration of transfer The fact that C failed to lodge his memorandum and articles at the time of regulation was not fatal; "in order" means "in substantial order" rather than "in perfect order" and the acceptance by the registrar of an application is conclusive proof of its sufficiency in point of form.

Practice and duties expected of conveyancers in deducing good title set out in ABN NV v Tan Chin Tiong & Anor, [1987] 2 MLJ 278. o Held that just because one title deed missing x make title defective – have registry of deeds act and assurances all registered there – can buy certified true copies there. If missing, acct for loss with stat declaration, buy certified true copy and vheck that property properly transferred o Read case, sets out other impt pts – what goes behind gd title and duties of vendor’s solicitors Title is not defective merely because the root of title which has been registered in the ROD is missing. Facts: P objected that V unable to show good title to property based on discrepancy that raised doubt on validity of sale of property - P argued that Recital 4 stated that property was sold via public auction whereas P’s solicitor’s certificate stated that property was purchased under option Wanted discrepancy to be rectified before good title could be deduced Held: - Conveyancer need only be concerned with assurances registered in ROD and not with registrable assurances which were unregistered. Missing title deeds so registered might always be inspected in ROD to connect claim of title • Prior deeds are merely links in chain of title and not deeds evidencing title of owner to property • Missing prior deeds should not be obstacle to P deducing good title unless missing assurance happens to be last conveyance in V’s favour. Even so, affects V’s ability to convey property free from encumbrances rather than to his title No reasonable doubt that V would NOT be at risk of a successful assertion against him of any incumbrance/claim against him arising from non-production of prior title deeds - P vested with good title, not merely passing whatever title/interest of owner in property sold Solution would be to make a Statutory Declaration and give certified true copy from LT Registry

Some salient points Capacity of person divesting title Extrinsic evidence required? Death of owner death cert, estate duties, probate or LA, S35(2) CLPA, S18 Trustees Act  Person divesting title – does he/it have capacity? Need extrinsic evid? If conveyance states that A is conveying proepty as legal rep of C who died some yrs back, then – • Does he have power? Where power from? – need to know estate/trust law. executor of will gets power fr will and will comes into effect on date of debt; if person dies without will, intestate, then administrator of estate gets power from the grant of letters of administration (not intestate succession act) • Ie must call for copy of grant – grant of probate; check terms of will and check that will gives him power to sell if selling. And that will terms followed when assented to give property to beneficiaries – s18 trustees act comes into play as well. If no express power of sale, then 2 signtures needed to give good discharge for purchase price received – does doc have two signatures?

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Section 35(2) CLPA - legal rep – deceased dies without will, adinsitrator have righ tot sell, if 6 yrs after dath, need to apply to court to sell Estate duty certificate – to certify that all estate duties paid That memorandum conferred power to sell properties if seller were company – how to satisfy oneself that comp sold following all nec regulations?

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Capacity of person acquiring title  Person acquiring title – banks lawyers/ purchasers lawyers – to ensure that purchasers have capacity to acq property – what might incapacitate them: • Bankruptcy – (also to person divesting title) • Soundness of mind • Legal age – if below 21, need order of court to approve person acquiring title/ disposing title – if actin for bank, mortgage though bank is considered disposal

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Signature by Power of Attorney? – need to check that power of attorney gave proper powers – valid at time that person used it? May only bevalid for specific period - stimes may be restrictive and specify what attorney can do –

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Proper description of property – - if any easmenets and rights of way, dhld be included

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Proper words of conveyance ‘hereby conveyed in fee simple/ estate in perpetuity/hereby assigned the leasehold estate commencing.. wat date

Is access part of title? Ask purchasers how they gain access – if via road and this is public road, then ok But if owned by someone else – need to cross another land to get to property – see case below Purchaser obviously needs access to property being purchased Right of way over land owned by another = easement Cheng Theresa v Oei Hong Leong [2006] 2 SLR 637 - 2 bungalows – built more than 40 yrs ago, orig shared same plot of land, alter subdivision. 48A had to cross over land belonging to 48 to get to her land. When Theresa cheng wanted to buy 48A, realisd this, part of contract had cond to say that she wil not buy unless there is proper legal right of way over 48A this is contract bet her and owner of A, but 48 not involve 48 says that to cross, she had to be contacted cheng brought matter to court held: because that was ony way to gain acces to 48A, it was entitled to easement over 48 : - must make it cond of contract that have right of way otherwise entitled to rescind Whose duty to check? Constructive knowledge of solicitor LS Investments v MUIS [1998] 3 SLR 197 court held that if lawyer shld have known constructively that knowledge will be imputed to client as well - => need to investigate which u are supposed to know as solicitor because knowledge is imputed to client REQUISITIONS ON TITLE When does Requisitions on Title take place?

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Req on title usually takes place when the Vendor’s solicitors send the purchaser’s solicitors draft Sale and Purchasers Agreement – i.e. the vendor’s solicitors send the title deeds for the property to the purchaser’s solicitors together with the draft Sale and Purchase Agreement.

Draft Transfer / Conveyance “subject to satisfactory replies to Requisitions on Title” • The practice is for solicitor to advise purchaser on the title before the contract is signed (i.e. do req on title before contract signed). If this is not possible (i.e. when the purchaser’s solicitors send draft transfer or conveyance back to vendor’s solicitor req on title is not completed), there should be a clause in the contract to state that the sale is “subject to title being in order and free of encumbrances on completion” or “subject to satisfactory replies to requisitions on title”. When sending the draft Transfer or Conveyance to the Vendor’s solicitor, the Purchaser’s solicitor must clearly state that the draft Transfer or Conveyance is sent “subject to satisfactory replies to the Requisitions on Title”. If not, it may be implied that the Purchaser is waiving his right to raise objections or requisitions on title and that the Purchaser is accepting title. The process of raising and answering Requisitions on Title is effective only if the parties are cooperative. However playing “hide & seek” is common. In practice, Vendor’s solicitor usually replies, “Please make your own searches” or “Not in the Vendor’s possession”. In view of the importance and usefulness of Requisitions on Title, solicitors should treat the sending and replying of Requisitions seriously.  Onus on purchasers to track down and do searches

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Title deeds are sent on “the usual undertaking” o This is an undertaking given by a firm of solicitors to another that it will return to the other firm the title deeds on demand by the other firm without any lien (solicitor’s or other wise) or claim on them. o vendor’s solicitors may send the title deeds for the property to the purchaser’s solicitors when sending the draft Sale and Purchase Agreement, usually sent on “the usual undertaking” o is an undertaking given by a firm of solicitors to another that it will return to the other firm the title deeds on demand by the other firm without any lien (solicitor’s or otherwise) or claim on them

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purchaser’s solicitors will have to investigate the title and send to the vendor’s solicitors a set of questions with respect to the title referred to as “Requisitions on Title” prepare Requisitions based on standard set of questions types of questions: • questions on covenants • conditions or • easements affecting the property • encroachments on the boundaries and • access to the property • also questions on governmental or other notices, • changes or proposals affecting the property intention of sending Requisitions is to raise any objection to title

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Why are Reqs on Title important? - Nature and Purpose of Purchaser’s Requisitions on Title Series of questions and/or objections raised by the Purchaser to the Vendor regarding the title to the property, eg. covenants, conditions or easements affecting the property, or encroachments on and access to the property. However, common to include questions not relating strictly to title, eg government notices. Also common to include a checklist for matters relating to formalities on completion Stretch beyond qn relating to title

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Requisitions should contain enquiries on conveyancing matters relating to formalities on completion – req on title should be used by purchaser’s solicitors as checklist to ensure that purchaser obtains proper title on completion and possession of all agreed items. E.g. of checklist of items to be delivered by the V to P on completion:

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document of discharge (for encumbered properties) together with any stamp/registration fees payable, o document of transfer/conveyance in purchaser’s favour, o keys to property (if sold with vacant possession), o transponder, lobby card (all means of access) and o if any, copies of notice of transfer/change of ownership from vendor’s solicitors to relevant authorities. Purpose for Purchasers to send out requisitions is to raise any objections to the title (on defect/doubt) which may come to light from perusal of title deeds or to raise queries on equities breaches of trust which may appear from solicitor’s investigations. Chia Kay Heng v Chia Kim Siah [1990] SLR 117, [1990] 3MLJ 193, CA.  Purchaser cannot rely on any objections which are not stated in the requisitions.  Facts: Agreement was subject to Law Soc Conditions of Sale. Purchasers argued that production of death certificate was insufficient and wanted grant of administration to be registered but request was made much later. The respondents purchased the property from one GCK who was the surviving joint owner of the property, after the other joint owner, CKL, died on 8 August 1976. By operation of law, GCK become solely and absolutely entitled to the property. The appellants argued it was necessary to produce and register the grant to prove CKL’s death and that the property was free from first charge for payment of estate duty. They argued that the respondents’ production of a copy of CKL’s death certificate was not a sufficient answer to requisition 15 in the contract of sale and that the failure to register the grant entitled them to a declaration that a good title to the property had not been shown in accordance with the terms of the contract of sale. Upon an interim order by the High Court, a certified true copy of the grant was produced and the sale was completed. At the hearing of the application, it was held that the respondents had shown good title to the property and that the appellants should pay damages for late completion (see [1989] 1 MLJ 272). The appellants appealed.  Issue: Whether Purchasers are entitled to require Vendors, the administrators of the estate, to register grant of letter of administration against subject to property to show good title before completion?  Held: P not entitled to insist that V comply with a requisition on title which specified that grant should be produced and registered Death certificate was sufficient to show good title to property Further, bound by Conditions of Sale which state that every objection/requisition not stated within 14 days stipulated period deemed waived and V assumed to have proved good title if he has removed all objections and complied with requisitions actually stated, unless they are unjustifiable So while V is under duty to prove good title when called upon to do so, P is under duty to investigate title and state his objections and requisitions by a certain time. Held, dismissing the appeal: (1) A registered grant was not the only acceptable evidence of death and release from payment of estate duty. The appellants were not entitled to insist that the respondents comply with a requisition on title which specified that a grant should be produced and registered. (2) Because of the wording of requisition 15, the appellants had, under condition 4 of the Singapore Law Society’s Conditions of Sale 1981, waived any right they otherwise would have had to the production by the respondents of the certified true copy of the death certificate, which would have been sufficient to show good title to the property (3) A certified true copy of the death certificate was acceptable evidence of death of one joint owner, which by operation of law, under the rule of survivorship, caused the cesser of the joint tenancy and vested the entire interest in the property in the surviving joint owner. o

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(4) If the appellants had accepted a certified true copy of the death certificate as evidence that CKL died on 8 August 1976, it would have been clear to them by virtue of s 29(1) of the Estate Duty Act (Cap 96), the property was released from the first charge imposed on any estate duty payable because the passage of 12 years from the date of CKL’s death ended on 7 August 1988, prior to the original date for completion of the present contract of sale. (5) The respondents would have shown a good title at the original date for completion of the sale and purchase by producing a certified true copy of CKL’s death certificate. The appellants were therefore not entitled to the reliefs sought and were rightly ordered to pay liquidated damages for late completion

The effectiveness of Requisitions on Title depends on the attitude of the Purchaser’s and the Vendor’s solicitors.

Form of Requisitions on Title Each law practice has its own “standard” set of Requisitions which should be adapted to suit the property.  Also see manual for sample Specific questions should be included in relation to specific problems, doubts or defects.

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Each piece of property diff

Turn to pages 81/82 of your manual 1. Please state the type of building … / 1. Vendor instructs building is … (make sure that this is the vendor client’s instructions) 4. Pls confirm that vacant possession …/ 4. This will be done in accordance with the terms of sale 7. Is there any encroachment … / 7. Please make your own searches (onus back on purchaser) -> purchaser can employ surveyors to survey property. Cost quite a lot but prudent is suspicious Turn to pages 83/84 of your manual 19 & 20.… must be paid … receipts produced …/ 19 & 20. In accordance with terms of sale … receipts will be produced only if available (most pple pay by check or by giro now – this only applies to cash over the counter) 39. V is required to produce … (TOP etc) / 39. Not in V’spossession 31. If V is ltd co, M & AA …. / 31. Copy is available for inspection at V’s regd office by prior appointment Turn to page 89 of your manual 59.On completion… (1) Title deeds relating to … (2) keys / 59. (1) Undertaking will be cancelled (or confirmed – depending on whether orig title deeds handed over) (2) noted (10) such other items … / (10) Not admitted (too wide – so rights reserved) We reserve the right to …/ Not admitted -

But standard set – waste of time. Purchasers shld draft own set partr to property at hand! don’t draft qn that give obvious ans. Only then will they have effect they are supposed to have. You must carry out proper investigations of title

Time Frames for Sending Requisitions on Title Open Contract – doesn’t incorp terms of sale. (Jalan nipah – incorp law soc conds of sale. If not imported, -> Purchaser should deliver Requisitions to the Vendor within a reasonable time from the delivery of the title deeds from the Vendor to the Purchaser. 14 days according to law soc conds - reasonable time diff to ascertain Requisitions should be sent to the vendor’s solicitors within a specific period Most contracts are now governed by the Singapore Law Society’s Conditions of Sale 1999 which provides that the Requisitions must be sent by the purchaser’s solicitors within 14 days from the date they receive

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the title deeds from the vendor’s solicitors, failing which any requisition or objection (as the case may be) shall be considered waived and the vendor is not obliged to answer or clarify any requisition Where the contract is silent on this point (e.g. where The Law Society’s Conditions of Sale 1999 are not made part of the terms of the contract) then Requisitions should be sent within a reasonable time However, where the purchaser’s solicitors send Requisitions on Title “out of time”, the vendor’s solicitors may answer but should always do so without prejudice to the vendor’s rights A tender of the draft Transfer without mentioning that such tender is subject to satisfactory replies to Requisitions on Title may imply a waiver of the purchaser’s right to raise objections or requisitions on title and acceptance by the purchaser of title Generally – Most contracts incorporate The Law Society’s Conditions of Sale 1999, Condition 4 – - 4.1 Requisitions must be sent within 14 days of a) after vbendor has notified purchaser tt docs of title may be inspected or b) after vbendor has delivered docs of title (or certified copies) to purchaser or c) within ushc extended time as vendor may allow in writing - 4.2 Every requisition or objection not raised within the 14 day time frame shall be considered waived. 4.3 time is of the essence for purpose of conditon

Failure to Send Requisitions on Title – requisition/objection considered waived. • Every requisition or objection not raised within the 14 day time frame shall be considered waived and V not obliged to answer/clarify any requisitions – means that P has accepted the title (condition 4.2) • Tender of draft Transfer, conveyance or other assurance by the Purchaser’s solicitors to the Vendor’s solicitors without mention that such tender is subject to satisfactory replies to Requisitions on Title may imply waiver of the Purchaser’s right to raise objections or requisitions on title and acceptance by the Purchaser of title. • However, where purchaser’s solicitors send requisitions on title “out of time”, the vendor’s solicitors may answer the requisitions as a matter of courtesy but should always do so without prejudice to the vendor’s rights. • HOWEVER, notwithstanding that purchasers solicitors may have omitted to send requisitions on title or to send them within the stipulated time, the purchaser is NOT deemed to have waived his right to make such requisitions if they: o (i) Relate to defects in title which go to the Root of title; or  Good root of title is a conveyance for good value or mortgage. (transaction by way of gift or acquisition upon someone’s demise is not a conveyance for good value.)  Good root of title must be a document which must prove on the face of it, the ownership on the whole legal and equitable title, and show which title it is, and show nothing to cast any doubt on the title of the disposing party o (ii) Relate to Conveyancing matters and Formalities on Completion  e.g. requests for documents of discharge in respect of any existing encumbrances. Duties of the Vendor o Vendor is bound to answer all specific questions relating to title and the property.  But way vendor answers o Where requisitions do not relate to title, Vendor should be helpful and informative but mindful of consequences of the answers. o Answers should be Vendor’s. The Vendor’s solicitor is liable for false answers and so must verify his answers with the Vendor unless he has personal knowledge of the same.  ‘vendor instructs that it is….’ – this is the way you shld phrase your answers • V also obliged to rectify any defect/impediment in title which is discovered by P after inspecting the title. Requisitions sent out of time – Vendor may out of goodwill reply, but should do so without prejudice to his rights under the contract. Late or no Requisitions -- Purchaser is not deemed to have waived his right to make such requisitions if they:-

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o relate to defects in title which go to the root of title; or o relate to conveyancing matters and formalities on completion.

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No duty to disclose any physical defects.

 But obliged to disclose all latent defects in title. Huang Ching Hwee v Heng Kay Poh [1991] 1 MLJ 15 (HC); [1993] 1 SLR 100 (CA). Facts:  Sale governed by law soc conditions of sale and special conditions set out in option.  Purchaser found out that vendor had carried out substantial alterations and additions to property about 7 months before contract without necessary planning permission, for which authority could demolish the building. Purchaser argued that since no approval for works had been obtained, there was latent defect of title. Held:  Law draws distinction between defects of quality and defects of title and distinction between patent and latent defects. o No duty to call purchaser’s attention to patent defects of title or quality. Vendor only under duty to disclose latent defects of title. o As for defects of quality, which affect property sold, there is NO duty to disclose them even if vendor is aware of such matters.  Whether or not a potential or incohaote statutory liability is an encumberance and a blot on title depends on circumstances. o Mere fact that state of affairs exists which might bring into operation provision of law imposing a burden or liability is insufficient to constitute a defect of title. o Before any qn of defect of title arises, intention to invoke provision of law must have been manifested and brought to notice of those concerned before contract is concluded. o Although potential for enforcement action by building authority was always there, there was never any certainty/inevitability about it. There was no evidence that authorities had threatened to take action against infringement, hence there is no defect of title. It is irrelevant that Building Control Division was not aware of unauthorised works at time vendor replied to requisitions. 

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Rule allowing purchaser to rescind contract in case of a defective title is based on express or implied term of contract of sale that vendor has to show a good title and being a contractual obligation, its performance is independent on knowledge. Of course, knowledge of latent title of defect on V’s part no doubt facilitates disclosure to P, so as to prevent P from subsequently objecting to title on that basis But where V’s duty of disclosure arises, ignorance of defect is no excuse

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But if non-disclosure relates to quality, no general duty to disclose and knowledge is generally not material in absence of misrepresentation / warranty / other circumstances  Since no duty to disclose, fact that V not forthcoming with replies to inquiries about unauthorised works was irrelevant Summary:

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If non-disclosure relates to quality, no general duty to disclose and knowledge is generally not material in absence of misrepresentation/warranty/other circumstances  If non-disclosure relates to title, then even ignorance of defect is no excuse  Where authority can issue condemnation notice, no defect in title till notice issued Not obliged to disclose existence of caveats as interests claimed under caveats are not latent defects. – purchaser can trace caveats by doing simple title search – can buy copy of caveat nad read what interest is claimed under the caveat  interests caliemd not always latent defects but may be pursuant to order of court giving an interest

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Indian Overseas Bank v Cheng Lai Geok [1992] 2 SLR 38. – caveats are not latent defects Facts: The plaintiff bank IOB was mortgagee of four properties in Birch Road (‘the properties’). In exercise of their power of sale as mortgagees, IOB put the properties up for auction on 2 July 1981. The conditions of the auction required the purchaser to pay a deposit of 25% of the purchase price as deposit immediately after the sale, sign a sale agreement and that the purchase be completed within one month thereafter. The

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defendant Cheng, who was the highest bidder at $2.6m signed the sale agreement and paid $650,000 being 25% of the purchase price on 2 July 1981. Prior to the mortgagee sale, owners of the properties granted an option to purchase the properties dated 22 August 1979 to one Ho. Ho in turn granted an option to purchase bearing the same date as the option to two persons, Ong and Kassim. Ong and Kassim subsequently exercised their option. Ho and the owners refused, were unable or neglected to complete the sale in favour of Ong and Kassim. Ong and Kassim, on learning that IOB proposed to exercise their power of sale as mortgagees lodged caveats claiming interests in the land as purchasers of the properties and under two lis pendens orders of 16 March 1981 and 1 July 1981. They also commenced Suit No 1762 of 1980 against the owners and Ho for specific performance and damages in lieu of specific performance, and Suit No 2180 of 1981 against IOB seeking an injunction restraining them from auctioning off the properties. On the basis of the above, Cheng rescinded the sale agreement. The issue was whether the defendant was entitled in law to do so. Related to this issue is whether IOB was under a duty to disclose, on or before 2 July 1981, the existence of the two pending suits and caveats notified on the land register. IOB subsequently sold the property on 11 April 1991 at $2.33m. One issue was whether and on what basis, if Cheng was not entitled to rescind the sale agreement, general and specific damages could be claimed. Held, allowing the plaintiffs’ claim: (1) Cheng was not entitled to rescind the sale agreement on the ground that there were four existing caveats and two pending suits involving the subject properties. IOB was exercising its power of sale as mortgagees of the properties. None of the four caveats existed prior to the creation of the mortgage of the subject properties in favour of the plaintiffs. In view of s 26 of the Conveyancing and Law of Property Act (Cap 61) and s 67(1) of the Land Titles Act (Cap 157), Cheng would have acquired a good title in the properties from IOB upon registration of the instrument of transfer executed by IOB had Cheng completed the purchase of the properties. (2) IOB was under no duty to disclose the existence of the four caveats and two pending suits. The general rule in contracts for the sale of land was caveat emptor (buyer beware) and a vendor’s duty to disclose only applied to latent defects of title. The caveats had been notified on the land register for the whole world to see and could not be regarded as latent defects in the title to the subject properties. Were the plaintiffs under a duty to disclose the existence of the four caveats and the two pending suits? o 46 The defendant’s counsel contended that the plaintiffs had deliberately omitted and failed to disclose the existence of the four caveats and the two pending suits which, had the plaintiffs done so, would have adversely affected the defendant’s decision to bid for the subject properties at the auction held on 2 July 1981. Were the plaintiffs under a duty to disclose the existence of the four caveats and the two pending suits? In my view, the answer is in the negative. The caveats had been notified on the land register and they were there for the whole world to see. The general rule in contracts for the sale of land is still undoubtedly caveat emptor and a vendor’s duty to disclose only applies to latent defects of title: see Dormer v Solo Investments Pty Ltd and Tsekos v Finance Corp of Australia Ltd. In the present case, the interests claimed under the four caveats notified on the land register in respect of the subject properties cannot be regarded as latent defects in the title to the subject properties.

Duties of the Purchaser The Purchaser is obliged at all times to conduct independent searches and enquiries on the title and the property. The Purchaser has to check the Vendor’s replies carefully and if dissatisfied with the answers, should take issue and pursue the matter further with the Vendor.  E.g. whether estate duty has been paid (note that estate duty has first charge on the property), if sale of property is after 6 years of the death of the testator, an order of court is needed.

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Conveyancing & Law of Property Act S35. – (2) No sale or mortgage of land belonging to the estate of a deceased person shall be made by the legal personal representatives of that person after the expiration of 6 years from his death unless with the sanction of the court, or unless the sale or mortgage is made in pursuance of a power of sale or trust for sale or mortgage which is expressly contained in or may be implied from the terms of the will of the deceased.

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While Vendor has to show good root of title, the Purchaser has to ascertain the Vendor’s title by investigating the documents produced by the Vendor.  Their duty to raise the issue If not, the Purchaser is bound by whatever prior interests he would have found had he investigated fully. o Collector of Land Revenue v Philip Hoalim [1977] 1 MLJ 88. Facts • Respondent owned an island off the coast of S’pore. Collector of Land Revenue gave notice of compulsory acquisition of island for public purposes. • State grant of the island to one Angus in 1860 contained a provision enabling the State, if it should be required for public purposes, to reacquire the island, paying therefore the latest purchase price plus any money that had been expended on the land by the owner. • Collector of Land Revenue did not proceed under that provision but he set in motion the ordinary processes of compulsory acquisition for public purposes. • But in ascertaining what a notional purchaser in the market would pay for the island it was relevant to consider whether the 1860 reacquisition provision was still enforceable at the date of the publication of the notice of compulsory acquisition. Issue • Issue relevant here is whether the respondent had constructive notice of the provision for reacquisition thereof when he bought the land in 1951 • Note: It was determined previously that the 1860 reacquisition provision was a covenant creating only an equitable interest in the land. - Held: Respondent did not have constructive notice of the provision in the original Crown grant • The allegation of constructive notice is not founded upon a suggestion that respondent must have known that the original title stemmed from a Crown grant and should have searched at the Land Office for its contents.

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The allegation rests entirely upon the fact that in the 1878 conveyance 1, the root of title, the description of the island conveyed included the reference already quoted to the plan endorsed upon the 1860 grant. It was contended that any purchaser must reasonably be expected to require production of the plan, to examine it, and also to read the instrument upon which it was endorsed. Their Lordships are quite unable to accept this.

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It is superfluous, irrelevant, for the purpose of identification of this island of the reference to the plan in the 1860 grant. The same comments are applicable to the schedule to the 1878 conveyance. The island conveyed was completely and perfectly identified in a manner upon which no survey plan could improve: or if perchance it displayed some conflict with the already complete and perfect identification it would have to be rejected.

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Their Lordships see no ground for holding that in those circumstances respondent was in any sense of the word required to look at the 1860 grant.

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Their Lordships however warned that `notice of a deed is notice of its contents` must not be taken as of universal literal application.

Statute gives right to rescind contract/compel answer 1

1878 conveyance was a good root of title in 1951 when the subject land was sold and conveyed to respondent

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1) If the Vendor fails to properly answer any requisition, the Purchaser can rescind the contract or compel the Vendor to answer the requisition by way of a Vendor-Purchaser summons. [Section 4(1) & (2) CLPA]

Vendor or purchaser may obtain summary decision as to requisitions, etc. 4. —(1) A vendor or purchaser of land, or their representatives respectively, may at any time or times, and from time to time, apply in a summary way to the court by originating summons intituled in the matter of this Act, and in the matter of the contract of sale, in respect of any requisitions or objections, or any claim for compensation, or any other question arising out of or connected with the contract not being a question affecting the existence or validity of the contract. (2) The court shall make such order upon the application as seems just, and shall order how and by whom all or any of the costs of and incident to the application shall be borne and paid. -

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Notwithstanding that the purchaser’s solicitors may have omitted to send Requisitions on Title or to send them within the stipulated time, the purchaser is not deemed to have waived his right to make such requisitions if they: • Relate to defects in title which go to the root of the title; or • Relate to conveyancing matters and formalities on completion Requisitions now also used to raise enquiries on conveyancing matters relating to the formalities on completion Checklist to ensure that the purchaser obtains proper title on completion and possession of all agreed items, if any. This briefly refers to: • The document of discharge (if the property is encumbered) • Together with any stamp fees or registration fees which may be payable, • The document of transfer or conveyance in the purchaser’s favour, • The keys to the property (if the purchase is with vacant possession), • The gate pass or remote control for the gate, if any, • And copies of notices of transfer or change of ownership Vendor’s solicitors should answer Requisitions where the questions specifically relate to title and the property unless the contract provides otherwise Vendor’s solicitors should note that they are liable to the purchaser if their replies are false and should always verify the accuracy of the answers with their client Purchaser’s solicitors should check the replies to their Requisitions on Title and if the replies are not satisfactory, pursue the matters with the vendor’s solicitors purchaser is entitled to compel the vendor to answer by taking up a vendor and purchaser summons in court (s. 4(1) and (2) Conveyancing and Law of Property Act (Cap. 61)) 2) Unreasonable Requisitions on Title vendor’s right to rescind not stat but conferred by law soc conds Condition 5 of Law Soc Conditions of Sale 1999 provides that the Vendor may within a reasonable time rescind the sale if the Purchaser will not withdraw a requisition which the Vendor is unable or on the ground of difficulty delay or expense or on any other unreasonable ground unwilling to remove or comply with.

Condition 5 Law Soc Cond 1999 5 Vendor’s power of recission 5.1 where vendor is a) unable or b) unwilling because of difficulty,m delay or expesen of other reaoanble cause, to remove or comply with any objection or requisition of purchase as to title, contract, sale plan and these conds, vendor has right to annul sale notwithstanding any prev negotiation or litigation 5.2 vendor must give purchaser not less than 10 days written notice to annul sale 5.3 sale to be treated as annulled after vendor’s notice has expired, unless objection or requisition withdrawn before expiry of tt notice 5.4 when sale annulle,d purchase entitled to return of deposit but withhtou interests, costs or compensation

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Condition 5 is not an “escape route” for the Vendor for a poor sale. (esp in rising market where rescinding sale allows V to sell prop at higher price to someone else). The courts tend to adopt a strict interpretation and the Vendor must not act arbitrarily, capriciously or unreasonably. Also V must act within R time. o i.e. cannot invoke condition 5 day before completion. if vendor is unable or on ground of difficulty, shall be unwilling to remove or comply with any objection or requisition which the purchaser makes or insists upon, the vendor will be entitled to annul the sale this is so especially if the contract is governed by The Singapore Law Society’s Conditions of Sale 1999

Cases

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Chay Chong Hwa v Seah Mary [1986] SLR 48 o case went to PC – purchaser found to be acting unreasonably and vendor allowed to rescind contract. Purchaser insisting on grant of probate – court sai that vendors had to give it. but later cases in sg – vendor acting capcriiously and yet court said that purchaser being unreasonable and therefore did not allow cond to be used Foo Ah Kim v Koo Chen Lim & Anor [1995] 3 SLR 207 o Facts  Agreement subject to Law Society’s Conditions of Sale

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Survey of property showed that a wooden store straddled the rear of property and neighbouring land. Also, common wall between property was completely within neighbouring land P asked for vacant possession of wooden store with good title to it V objected since store did not form party of property and they were not obliged to deliver good title. They were however, willing to have store vacated and demolished upon completion P then demanded good title to neighbouring land on which common wall stood V stated that they would invoke Condition 5 of Conditions of Sale to rescind agreement unless P withdrew her objections within 10 days because they were manifestly unreasonable V reserved contractual rights to forfeit deposit but expressed willingness to refund it V then invoked Condition 5 and rescinded contract

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P’s demand that whole of wooden store, including part standing on adjoining land, be delivered to her on completion with good title was an impossibility o Unreasonable for P to expect good title in respect of common wall, for to resite common wall/to purchase strip of land on which half of common wall stood would involve V with an unquantifiable expense o Alternative demand for compensation equally unreasonable because compensation not realistically assessable o V entitled to invoke Condition 5, not arbitrary / capricious / unreasonable in doing so  But once Condition 5 invoked, all other rights and obligations of parties under agreement brought to an end. o When V elected to give notice to rescind, V had no option and were obliged to return deposit to P if P did not withdraw the objection. o In purporting to reserve rights to forfeit deposit, V were being excessively cautions  Still, purported reservation was not oppressive and did not in any way render notice ineffective Chiam Toon Hong v Ong Soo Yong [2004] SGHC 138 o Plaintiff, Mr Chiam Toon Hong (“Chiam”), sought a declaration that his contract dated 2 April 2002 to sell his five per cent share of 145 Killiney Road to the defendant, Mr Ong Soo Yong (“Ong”), had been rescinded. He also sought an order that the caveat lodged against the said property by Ong on 5 April 2002 be removed. Ong asserted that Chiam’s application should be

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dismissed as it was the latter who delayed the completion of the sale and purchase of the property.; Chiam contended that he was entitled to serve a notice of annulment under cl 5 because Ong had no right to insist on a variation of the Order of Court before the completion of the sale and purchase of his share of the Killiney property. Held: 28 The circumstances under which cl 5 may be relied on by a vendor were considered by the Court of Appeal in Chay Chong Hwa v Seah Mary [1984–1985] SLR 183, which was upheld on appeal to the Privy Council in [1986] SLR 48. L P Thean J, as he then was, who delivered the judgment of the court, emphasised at 190, [16] that “condition 5 does not confer on the vendor a wide and unfettered right to annul the contract”. He added at 189–190, [12] and [16] as follows: It is obviously a condition for the benefit of a vendor giving him a right in certain circumstances to rescind the contract which has been validly made. Such a condition is undoubtedly of a very drastic nature, and understandably the courts in exercise of their equitable jurisdiction have evolved certain principles qualifying such right of the vendor…. In determining whether a vendor can avail himself of such a condition the court will look closely at the conduct of the parties to the contract. In particular, in relation to the matter objected to or required by the purchaser to be complied with, the vendor must not have been guilty of ‘recklessness’ in entering into the contract, and unwillingness on the part of the vendor to meet the objection or comply with the requirement raised by the purchaser must not in the circumstances be unreasonable. A vendor cannot in reliance on such condition arbitrarily, capriciously or unreasonably rescind the contract, and certainly he cannot do so acting in bad faith. 29 Chiam’s counsel relied on Foo Ah Kim v Koo Chen Lim [1995] 3 SLR 207. In that case, the appellant purchaser entered into an agreement on 11 June 1993 to purchase 125 Joo Chiat Road for $890,000 with “vacant possession on completion”. The contract, which was subject to the Law Society of Singapore’s Conditions of Sale 1981, provided that if any encroachment was found to exist on the property, the purchaser would be entitled to rescind the property. A survey of the property revealed that a wooden store straddled the rear of the property and the neighbouring property. Furthermore, the common wall between 125 and 127 Joo Chiat Road was completely within 127 Joo Chiat Road. On 4 August 1993, the purchaser’s solicitors informed the vendors’ solicitors that the purchaser required the vendors to give good title to the wooden shed that stood partly on 125 Joo Chiat Road and partly on the adjoining property, and the common boundary wall that stood completely on the adjoining property. The vendors agreed to have the wooden shed demolished but this did not satisfy the purchaser. Why she expected the vendor to give her good title to part of the adjoining property could not be fathomed. After the vendors’ solicitors served a notice under cl 5 of the Law Society of Singapore’s Conditions of Sale 1981 on 19 October 1993, the purchaser withdrew her demand regarding title to the wooden shed but she continued to insist that she be given title to the common wall. Karthigesu JA, who delivered the judgment of the Court of Appeal, pointed out that the vendors were placed in an impossible position. He added that the purchaser’s final demand that there be good title to the wall that stood on the adjoining land was merely a ploy to get a reduction in the purchase price. In these circumstances, the court accepted that the vendors were not acting arbitrarily, capriciously or unreasonably when they invoked cl 5 to annul the contract for the sale and purchase of the terrace shophouse. 30 The above-mentioned case is clearly distinguishable from the present case. When considering whether or not Ong’s request for a variation of the Order of Court is unreasonable, it should be noted that Chiam’s former solicitor, Ang, advised him and Ong that the sale of the former’s share of the Killiney property could not be completed unless the Order of Court was varied. All that Chiam was concerned about until he instructed KOP almost one year later was whether or not he had to pay the legal fees for the variation of the Order of Court. He asserted that he was not responsible for the legal fees because Ong had agreed that he was to receive a net amount of $200,000 for the sale of his share of the Killiney property. As such, he contended that Ong should bear the costs of varying the Order of Court. Such a term was not provided for in the contract of sale and purchase and I do not believe that Ong agreed to such a term. 31 In my view, it was not unreasonable for Ong to insist that the Order of Court be varied before the transaction is completed and especially so after he offered to pay the legal costs in relation to an application to vary the Order of Court, which was made because of the fractious relationship between the co-owners of the Killiney property. Kan J had required all the co-owners of that property, including Chiam, to act in unison to sell the property by public tender and to distribute the proceeds in the proportions specified in the Order of Court. It was obvious that no party to the Order of Court should act on his own to sell his share, for such a private sale of a share

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of the Killiney property could complicate matters and delay compliance with the Order. Even if Chiam took his duties to the court lightly, a purchaser in Ong’s shoes, with notice of the Order of Court, was entitled to be cautious enough to seek the approval of the court for the sale and purchase of a share of the Killiney property. Whatever may have been his earlier position, Ong finally offered to pay for the legal costs involved in obtaining a variation of the Order of Court. As such, Chiam should have co-operated with Ong by signing the requisite papers for the variation of the Order of Court. In these circumstances, Chiam’s refusal to co-operate with Ong was unreasonable. It follows that he was not entitled to rely on cl 5 to annul the contract for the sale of his share of the Killiney property to Ong. QUESTIONS What is a good root of title? –  see quotation above. Stretch back at least 15 yrs according to CLPA What are requisitions on title? –

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see defn above – qns or objns raised What is the time frame for sending them? –

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if law soc x apply, time is reasonable time, if apply, then 14 days f date of receiving title deeds Explain when Condition 5 of Law Society’s Conditions of Sale 1999 may be used by the Vendor –

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1. see cond first, can only rescind if raises objn that is unreasonable and cannot be complied with. What is unreasonable on part of purchasers or vendors – see 3 cases above

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