P2:

Equity & Trust

1. Introduction to Equity and Trusts

1.1

Historical Origins

Equity is one of the 5 keys of land law (P1: Birk) and its origin is due to historical reasons
Origin: When the landowner leaves the country, whether for war or what not, he would convey the land to X to
hold it for his wife. However, under the common law, X would have the legal interest and can ignore the obligation
imposed. Hence, equity stepped in to compel X to perform his obligations or be imprisoned for contempt of the
Chancery.
Possible because the powers of the courts in equity PREVAIL over the common law rules.
o In all cases where there is a conflict between the rules of equity and the rules of common law with reference to
the same matter, the rules of equity should prevail.
o Para 14, First Schedule of Supreme Court of Judicature Act
14. Power to grant all reliefs and remedies at law and in equity, including damages in addition to, or in
substitution for, an injunction or specific performance.

1.2

Rights created by Equity

Types of rights
Proprietary: Bind 3rd parties
o Legal interests
o Equitable interests: Can bind a 3rd party, except a bona fide purchaser of legal interest without notice.
Non-proprietary but nevertheless courts may ascribe properties of property rights
o Mere equity: Does not bind 3rd parties and only bind the purchaser of equitable interest with notice, e.g.
equitable right to rescind and the right to rectify or cancel an instrument.
Nevertheless, it has certain characteristics of property rights,
Allied Irish Banks Ltd v Glynn: Where the equitable owner gains the chose in action which could
become an estate if he brought proceedings and if they were successful , as compared to damages.
License coupled with an equity: The unconscionable behaviour of a 3rd party to a contract binds him
under a constructive trust
Trust: Created by equity to give the beneficiary equitable interests
Very flexible tool
o One can only create estates in fee simple and life estate at common law for real property. However, one can
create these in equity for both real and personal property, such as chattels and chattels-real (leases).
o The court, where there is a contract for the sale or grant of a property interest, may create constructive trusts on
behalf of the parties. This provides the buyer with the remedy of specific performance, which may not be
possible in contract law.
Equity creates more forms of property rights compared to common law.
o Equity of redemption: The contractual obligation to reconvey the land after the mortgage is paid is given the
force of a property right by equity.
Types of trusts commonly used
o Family trust: Life interest, discretionary, protective and specialised trusts for tax relief
To take advantage of tax havens
o Blind trusts: e.g. Mitt Romney and Bain Capital, to protect politicians from being attacked on the ground of
conflict of interest
o Unit trusts: For investment purposes
o Pension scheme trusts
o Employee trusts
o Other trusts situation such as one of the homeowner dying intestate.

2. Equitable Interests in Land

2.1

Equitable Property Rights

Common law vs Equitable property rights

At common law: Legal right to a thing (in rem), attached to the item and enforceable
against the world
In equity: Equitable right to a right in a thing (property right) or a right against a
person (personal right), but enforceable against the world, except for the equitys
darling.
o NOT a species of common law property right, weaker version of common law
property right nor analogous to it
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o Beneficiary CANNOT enforce his rights against 3rd parties but have to get the trustee to enforce on his behalf
Different ways to look at it: Pettit, Equity and the Law of Trusts (11th ed, 2009), pp 83-85
o Traditional view: Right in personam
An equitable interest will not avail a subsequent bona fide purchaser for consideration without notice and
originally you can only sue the feoffee.
o Alternative view: Right in rem
It is available against persons generally, although there are some exceptions
o HOL in Baker v Archer-Shee: A specific equitable interest in each and every one of the item that forms the
trust.
Hybrid as they are not quite rights in rem (because of the doctrine of equitys darling) and not quite rights in
personam (because of the doctrine of following trust funds)
Equitys Darling: The bona fide purchaser for value of the legal interest without notice
The defence of an earlier competing equitable interest to the subsequent bona fide purchaser of a legal
interest for value without notice of the earlier equitable interest is largely bound up with the development of
equity which followed the common law
The rule is also the result of equitys interventionist jurisdiction being dependent upon a peg upon which to
attach the result at common law
Equitys darling provides no peg for the holder of the equitable interest to attack the legal holder
Hence, equity simply shows [equitys darling] no affection at all, he has simply shown himself to belong to
that large class of common law owners with whom Equity has nothing to do: Quoted from J Hackney
Understanding Equity and Trusts
Example: Contract for sale
Locus classicus: Lysaght v Edwards (1876) 2 Ch D 499
o A valid contract for sale makes the vendor becomes in equity a trustee for the purchaser of the estate sold
because the remedy of specific performance was available to enforce the constructive trust
Cheng-Wong Mei Ling Theresa v Oei Hong Leong [2006] 2 SLR(R) 637
o Affirmed Lysaght v Edwards that the purchaser, under a valid contract for sale, has the equitable interest in the
land while the vendor is the constructive trustee.
o The basis of the imposition of the constructive trust is that the parties are entitled to the remedy of specific
performance arising when the contract is enforceable and binding.

2.2

Priorities at Common law (Outside Registration)

Summary of rules for priorities

Legal then legal: nemo dat
Legal then equitable: equitys darling (but stretch the definition of equity)
Equitable then legal: equitys darling
Equitable then equitable: First in time

2.2.1 Legal vs Legal

Maxim: Nemo dat quod non habet (No one can give what he does not have)
When A seeks to transfer As legal title to BOTH B then C, C will get NO TITLE because A no longer has the
legal title after the transfer to B and hence has nothing to transfer to C.
o Mercer v Liverpool, St Helens and South Lancashire Ry Co [1903] 1 KB 652, p 662 per Stirling LJ: [L]egal
rights and interests in and to land bind all persons, whether with notice or not. Hence, the subsequent
purchaser is bound by the first purchasers interest instead

2.2.2

Legal vs Equitable

Maxim: Where the equities are equal, the law prevails

Aka equitys darling where there are specific requirements for equities to be equal
o If you do not fulfil them, you will fall into the equitys reach and legal interest will be subjected to equitable
interest
o Do NOT need to question the sellers behaviour, unlike the first in time prevail maxim.
Rationale
o When you obtain a legal interest, you are seeking the common laws aid to enforce the right.
o However, in certain categories where equity has jurisdiction, equity can step in.
o If you satisfy all the requirements, you evade the equitys jurisdiction, which cannot exercise their
jurisdiction over you.
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Equitable interest: You have to resort to equity

Bona fide: Equity will step in if it is not bona fide
Purchaser: When you do not purchase the interest
Value: When you do not provide value in exchange
Notice: When you have notice of the equitable interest, equity does not allow you to ignore it.
Seminal case of Pilcher v Rawlins (1872) 7 Ch App 259 where the subsequent bona fide purchaser of a legal
interest for value without notice was held to have an absolute, unqualified, unanswerable defence against an
equitable right
o Exception: When there is a fraud (or some serious equitable breach) on the legal owner that created the
equitable interest, then the legal interest may be defeated.
Pilcher v Rawlins (1872)
The trustees of a settlement advanced the trust money on the security of real property which was
conveyed to them by the mortgagor, the mortgage deed noticing the trust.
The surviving trustee afterwards induced the mortgagor to execute a deed by which the mortgaged
property purported to be conveyed to the trustee as on a purchase by him, though no money in fact
passed.
The trustee then, concealing the prior mortgage, and shewing title under the pretended purchase deed,
conveyed the property to a mortgagee without notice.
An intentional fraud has been committed, and the parties to it have been enabled to effect their purpose
owing to the cestuis que trust allowing the trustee, originally one of three, to become the sole trustee. As
sole trustee he necessarily had possession of the title deeds to the mortgaged estate
So that, by the reconveyance to the mortgagor, the mortgagor became repossessed of the legal estate,
and, by keeping back the whole mortgage transaction, was enabled to shew a complete legal title to the
property.
o Had he disclosed the mortgage, I think that the mortgage deed would have put the parties
dealing with him on inquiry; but as matters were conducted, the mortgagee acquired the legal
estate, and entered into possession of the property without notice of the prior charge, and he
must, I think, be entitled to hold it.
o The plea of purchase without notice ... when proved, equity declines all interference with the
purchaser, having, as is said, no ground on which it can affect his conscience.
That is an explanation which any ordinary man of intelligence would understand. It might not be
satisfactory to the losers, but they must see at once how it came to happen that they lost their estate.
If you trust your property to a man who turns out to be a rogue, it stands to reason that you may lose it.
Where the legal interest comes after the equitable interest,
1. Application of the nemo dat rule (first in time)
2. But whether the legal interest has priority depends on whether the purchase is the bona fide
purchaser of the legal interest without notice (equitys darling)
If
s
o,
h
e
t
akes free of the equitable interest although it was created earlier in time to his legal interest

ELEMENTS
(1) Bona fide
o Gray and Gray, p 1151: The requirement of good faith imports something more than a mere absence of
actual or constructive notice. In order that the purchaser may claim immunity from equitable interests, he must
show not only that he had no notice of those interests but ALSO that his absence of notice was genuine and
honest.
In practice nowadays, this requirement is readily deemed to be satisfied and little ever turns upon it.
Latches onto lack of notice: Lack of notice is a necessary but not sufficient requirement for bona fide
o Case
Scan Electronics (S) Pte Ltd v Syed Ali Redha Alsagoff [1997] 3 SLR 13, [22]-[23]: Scan Electronics
actually knew that the title of the Allahadads, with whom they were dealing as vendors of the property, was
precarious. This was apparent from the documents that concerned Scan Electronics as purchaser.
(2) Purchaser
o Commissioners of Inland Revenue v Gribble [1913] 3 KB 212, p 218 per Buckley LJ: Purchaser may, as it
seems to me, mean any one of four things. Fourthly, it may bear that which in the language of real
property lawyers is its technical meaning, namely, a person who does not take by descent.
(3) For Value (cf Doctrine of Consideration)
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o Past Consideration is SUFFICIENT for the purpose of providing value, though it may not qualify as
consideration.
Thorndike v Hunt (1859) 3 De G & J 569: Payment of past debt qualifies as value
o Executory Promise is INSUFFICIENT for the purpose of providing value, though it may qualify as
consideration
Story v Windsor (1743) 2 Atk 630
o Irrelevant whether he has taken the entire or only taken a partial interest, so long as value has been given
(4) Of the Legal Estate
o Only the purchaser of a legal estate can defeat the subsequent equitable interests
o Cave v Cave (1880) 15 Ch D 639, pp 648-649
Facts: The sole trustee fraudulently used the money to purchase the freehold in a house, upon which he
raised a legal mortgage, followed by a number of equitable mortgages. When the fraud was discovered the
house raised less money than all the claims, and the issue was the order in which claimants were to be paid.
Holding: The legal mortgagee had priority by virtue of his legal estate, and the other equitable interests are
subject to the maxim of first in time prevails.
(5) Without Notice
o (i) Actual Notice: Where there is actual evidence of knowledge
o (ii) Constructive Notice
A person is said to have constructive notice if he would have notice had he made the investigations that a
prudent man would have made in similar transactions.
TRADITIONAL view: A person is deemed to have constructive notice of a prior right when he does not
actually know of it but would have learned of it had he made the requisite inquiries
Hunt v Luck [1902] 1 Ch 428: "... if a purchaser or a mortgagee has notice that the vendor or
mortgagor is not in possession of the property, he must make inquiries of the person in possession ...
and find out from him what his rights are, and if he does not choose to do that, then whatever title he
acquires as purchaser or mortgagee will be subject to the title or right of the [person] in possession."
* Kingsnorth Finance Co Ltd v Tizard [1986] 1 WLR 783
o Facts: The couple bought the land and built the house, each contributing substantially equally to it
and it was registered in the husbands name. After the marriage soured, the husband obtained a
mortgage on the house and emigrated to America without repayment. The bank sought to possess the
house.
o Holding: The wife had an equitable interest as she contributed a substantial sum to the purchase
price. The agent knew that the husband had recently separated and this knowledge is imputed to
the bank, which should have undertaken investigations but failed to do so. Hence, they had
constructive notice.
DIFFERENT constructive notice in undue influence: Banks have to take reasonable steps to reduce, or
even eliminate, the risk constructive notice, i.e. does not matter whether the reasonable man would have
done so or not and not concerned about the discovery of information
Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773, p 802 per Lord Nicholls reinterpreting
Barclays Bank Plc v OBrien [1994] 1 AC 180: The steps are not concerned to discover whether the
wife has been wronged by her husband in this way. The steps are concerned to minimise the risk that
such a wrong may be committed.
o (iii) Imputed Notice: Imputed from the agent to the principal
s 70, CLPA (Cap 61, 1994 Rev Ed)
(1) A purchaser shall not be prejudicially affected by notice of any instrument or fact unless
o (a) it is within his own knowledge, or would have come to his knowledge if such
inquiries and inspections had been made as ought reasonably to have been made by him; or
o (b) in the same transaction, with respect to which a question of notice to the purchaser
arises, it
has
come
to
the
knowledge
of
his
counsel
or
other
agent,
or
would
have
come
to
their
knowledge
if such inquiries and inspections had been made as ought reasonably to have been made.
Acts as a LIMITATION on imputed notice to the same transaction and not prior knowledge
(2) This section shall not exempt a purchaser from any liability under or any obligation to perform or
observe any covenant contained in any instrument under which his title is derived

2.2.3

Equitable vs Equitable

Maxim: Qui prior est tempore, potior est jure (Where the equities are equal, the first in time prevails)
Analogous to nemo dat for competing legal interests since both achieve same results in practice
o However, what DIFFERS are the exceptions to the rules.
Factors to determine equality of equitable title
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o Very fluid factors may be similar to equitys darling

However, the equities referred to are different.
o (1) Whether the interest created second in time was given for valuable consideration
o (2) Whether the holder of the subsequent interest had notice of the earlier one at the time when he obtained his
interest
o (3) Whether there was fraud on the part of either of the holders of the competing interests
While negligence would not be fraud, the omission to use ordinary care in inquiry after or in keeping the
title deeds may be evidence of fraud, where such conduct cannot be explained.
Where there was fraud on the part of the legal interest holder, which had led to the creation of the
subsequent equitable interest without notice of the earlier created legal interest
Northern Counties of England Fire Insurance Co v Whipp
However, a higher degree of misconduct is required to postpone the earlier legal interest to the later
equitable interest
o National Provincial Bank v Jackson
o (4) The behaviour of the parties concerned
Rice v Rice (1853) 2 Drew 73: The vendor has allowed an acknowledgement of receipt of the purchase
money to be on the conveyance to the purchaser, without having received the money. This caused a
subsequent innocent purchaser to believe that the title was clear when it was not.
Rice v Rice (1853) 2 Drew 73
As between persons having only equitable interests, if their equities are in all other respects equal, priority of
time gives the better equity.

2.3

Mere Equities

An earlier mere equity will not prevail against a subsequent legal or equitable interest if the holder of the latter interest
is a bona fide purchaser for value without notice of the mere equity.
A mere equity naked and alone is incapable of binding successors in title even with notice; it is personal to the
parties.
Cases
o Seminal case: * Philips v Philips (1861) 45 ER 1164
o National Provincial Bank Ltd v Ainsworth [1965] AC 1175, noted Wade [1955] CLJ 158: The deserted wife
only has a mere equity to stay in their matrimonial home that is only enforceable against her husband, and not
an equitable interest in the house. Hence, the bank can evict the wife from the house.
National Provincial Bank Ltd v Ainsworth [1965] AC 1175 at 1237-1239, 1252-1255
Lord Upjohn: I myself cannot see how it is possible for a mere equity to bind a purchaser unless such an equity is
ancillary to or dependent upon an equitable estate or interest in land the reason why a mere equity can be
defeated by a subsequent purchaser of an equitable estate for value without notice is that the entire equitable
estate passes and it is not encumbered by a mere equity of which he has no notice. But a mere equity naked and
alone is, in my opinion, incapable of binding successors in title even with notice; it is personal to the parties.
Lord Wilberforce: In my opinion, even if one accepts the description of the wifes right as an equity, that does
nothing to elevate the right from one of a personal character, to be asserted against the husband, to one which is
binding on successors in title to the land.
o Latec Investments v Hotel Terrigal (1965) 113 CLR 265: Mortgagee fraudulently exercised its power of sale in
favour of a wholly owned subsidy. The purchaser created an equitable charge on the land in favour of a 3rd
party who had no notice of the circumstances of the sale. The mortgagor succeeded in setting aside the sale to
the mortgagee and the purchaser. However, he was bound by the equitable charge of the 3rd party as he could
not establish his equity of redemption and therefore had no prior equitable interest.
o Contract law cases of fraudster selling car to a 3rd party. The sellers mere equity (right to rescission) will not
prevail if the 3rd party is a bona fide purchaser for value without notice of the right to rescission.
A mere equity includes: Pettit, Equity and the Law of Trusts (11th ed, 2009), pp 21-25
o Right of a grantor to rescind a contract on the ground of the grantees fraud or undue influence
o Right to rectification of a document that incorrectly embodies the agreement between the parties
o Right of consolidation of mortgages
o Inchoate proprietary estoppel

3. Contract of Sale
In transfer of legal title of property, there are two stages: Contract of sale and subsequent transfer.
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When dealing with personal property, the two stages are often fused where the legal title is transferred by the ctt.
However, for real property, they are distinct and have separate requirements

Option
To
Purchase

Exercise/
Contract

Completion

How to look at Contracts for sale

Divorce the contract from the formalities
o Contracting: Contractual rules apply
3 Ps required in a contract for sale of land: Parties to the contract, property and price
o Formalities: Property law applies and all the information and terms that are part of the ctt are required
Who is suing and who is being sued
o Df: Must sign and satisfy the requirements; OR
o Pf: Must part perform (similar to estoppel)
Tan Sook Yee, Chap 16- contracts for the sale of land
Unlike sale of goods, the transfer of the title (completion) always postdates the contract
Period of time between contract and completion allows purchaser to investigate the title of the vendor
In sg, different types of properties are governed by different rules as to capacity for holding property.
Specific categories of land which sales are governed by statute:
o HDB flats See TSY Chapt 24
o Sales of commercial property sale of commercial properties act (cap 281)
o Sales by housing developers housing developers (control and licensing) Act ( cap 61)

Options
Class discussion: an option is to buy a period of time whereby you can decide if you want to buy the property.
Options are usually quite strict, like it will close on the dot at the stipulated time. Once it closes the vendor can
retain the option fee and sell the property to another person.
Usually options provide a 2-week time frame
The option locks the vendor to selling the property at the stipulated price
If the vendor breaches the option in the given time frame, then he has to compensate the option holder for
his loss. The option-holder may even ask for specific performance
Hoffman J in Sprio v Glencrow:
The underlying principles are clear enough. The granting of an option imposes no obligation upon the
purchaser, and an obligation upon the vendor which is contingent upon the exercise of the option. When the
option is exercised, vendor and purchaser come under obligations to perform
Sg adopted the description in Spiro v Glencrown of an option to purchase land as a contract for the sale of
land contingent on the exercise of the option
For an option to purchase land to be enforceable, it has to be evidenced in writing or BE in writing (Mountford
v Scott)
Commonly, an option will contain:
o Names of the parties
o Property and price
Options may be exercised in any way agreed upon by the parties
Conventional method is for the holder to sign the acceptance copy of the options form and return it to the
vendor together with the payment of 10% of the purchase price as deposit
The option contract provides for the signing of a formal agreement of sale AFTER the exercise of the option,
there is no contract of sale until the formal contract of sale is signed
JT Chanrai Pte Ltd v Consolidated Hotels Ltd:
Option contract provided that two weeks from the exercise of the option, the parties must enter into an
agreement for the sale and purchase (using the attached copy of the sale agreement). If the option holder
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failed to do so, the deposit will be forfeited. Option holder failed to enter into sale agreement. Court upheld
these terms.
When the words subject to contract appears on the option:
o This means that when they negative the existence of a contract even though there might be terms set
out in the options document.
o There will be no contract on the exercise of the option until a formal contract is signed (Koh Peng
Moh v Tan Chwee Boon) (1962)
After the option is exercised, the vendor cannot back out. If he backs out = repudiatory breach.
o Option holder may insist on exercising the option (Alrich development pte ltd v Rafiq Jumabhoy)

3.1

Formalities

s 6(d) Civil Law Act (Cap 43, 1999 Rev Ed)

No action shall be brought against any person upon any contract for the sale or other disposition of immovable
property, or any interest in such property, unless the promise or agreement upon which such action is brought, or
some memorandum or note thereof, is in writing and signed by the party to be charged therewith or some other
person lawfully authorised by him.
o The DF ALWAYS needs to sign
cf UK: s 2 Law of Property (Miscellaneous Provisions) Act 1989 (England)
o Contracts for the sale of land or the disposition of an interest in land had to be in writing and not merely
evidenced by writing
Justifications and their criticisms
Evidentiary
o Historical justification: to prevent fraud
o Is the requirement for writing still relevant now that we have other technologies such as video recording?
Cautionary
o Weakened given the lax interpretation by the courts on joinder, writing, signature and naming the property
o If you want to have a cautionary function, require it to be in writing rather than merely evidence by writing
Standardisation of contract
o 3 Ps required
Mary- Ann Arrichiello v Tanglin Studio Pte ltd
Buyer orally agreed with the vendor to buy the property at a given price (3Ps)
She paid booking fee of $2000
Vendor sent her a letter confirming that she had paid a deposit of $2000 being booking of one unit of
maisonette unit... for the price of $130000
Vendor changed his mind abou thte sale
but court held that there was a contract on the facts of the sale

Choo Si sen v Lee Boon Sai
The buyer paid vendor $500 and vendor gave him a receipt in return
The receipt contained the 3PS
500 was to exercise something like an option, whereby the sale and purchase agreement must be signed
within a week and 10% of the purchase price must be paid
this receipt was signed by the vendor fell under s6(d)
Issue in this case: did the parties intend for this to be a binding contract
court held NO. because Choo was a lawyer + Choo did not sign the receipt.


Koh Kia Hong v Guo Enterprises

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writing contained names of the parties, property to be sold and fixed price (3Ps) and a statement that the
parties had agreed to the terms set out.
Writing referred to a booking fee and had a statement stating kindly let me have your lawyers name so
that my lawyer can contact him for the option
Chao J held that:
Whether or not there was a contract depended on the circumstances of each case
In this case, parties intended to be bound by the written notice, notwithstanding the word option
Because option in the minds of the parties here refers to referred to legal formalities
Factors that are conclusive that a contract was made:
o Demand for the deposit
o Payment of the deposit
o Execution of the note by both parties
o Both parties stated in the note that they agreed to the above
o Receipt stating that it was for the deposit of the premises
o Deposit was credited in the dfs account.

3.1.1 Elements of s 6(d) CLA

(a) Writing
Current rule: Unclear if property has to be named, and the old rule that my property is sufficient still stands.
Furmston: The agreement itself need not be in writing. A memorandum of it is sufficient, provided that it
contains all material terms of the ctt such as the parties, subject matter, and consideration
o Joseph Mathew v Singh Chiranjeev
Treitel: The memorandum need not be prepared for the purpose of satisfying statutory requirements of written
evidence. A writing which comes into existence before an action is brought on the ctt will suffice so long as it
acknowledges or recognises the existence of the ctt
o Joseph Mathew v Singh Chiranjeev
Electronic correspondence can satisfy the writing requirement
o SM Integrated Transware Pte Ltd v Schenker Singapore (Pte) Ltd [2005] 2 SLR(R) 651: Lease over
warehousing space was concluded over e-mails
SM Integrated Transware Pte Ltd v Schenker Singapore (Pte) Ltd [2005] 2 SLR(R) 651
Recognising electronic correspondence as being writing for the purpose of s 6(d) of the CLA would be entirely
consonant with the aim of the CLA and its predecessor, the UK Statute of Frauds 1677 (c 3), as long as the
existence of the writing could be proved. Consequently, the e-mail correspondence which constituted the
memorandum of the contract was in writing for the purpose of s 6(d) of the CLA.
o Joseph Mathew v Singh Chiranjeev [2010] 1 SLR 338, noted Low (2010) 22 SAcLJ 704
Electronic correspondence can amount to memorandum or contract in writing since it is in line with the
purpose of s 6(d), which is to prevent fraud by requiring a more formal written evidence of certain types of
contracts.
(b) Subject to contract Memoranda
Orthodox position is that where negotiations is subject to contract
o There is NO contract and parties are in the same position as a gentlemans agreement, i.e. never binding
UK: Some uncertainty in the past
o Law v Jones: A subject to contract letter was used for the purposes of satisfying the writing requirement.
o Daulia Ltd v Four Millbank Nominees: Pf wished to purchase property from the df and agreed on the terms but
had no written contract. The df promised that if pf arranged for a bankers draft for the deposit to be delivered
he would complete the written contract. The pf duly complied with the request but the df refused to complete.
Court held that df was bound by that contract to complete the written contract for the sale of the property
o cf Tiverton Estates Ltd v Wearwell: The letter from the sellers solicitors and the draft contract did NOT
constitute a sufficient memorandum. It is not enough to set out the terms of the contract. It is also, more
importantly, necessary to acknowledge the existence of the contract and the sellers letter did not do so.
SG: If parties who negotiate via emails do NOT wish to be bound until a formal written contract is signed, then
they should include the phrase "subject to contract" in their email correspondence.
o SM Integrated Transware Pte Ltd v Schenker Singapore (Pte) Ltd [2005] 2 SLR(R) 651
o Issue: Can it be evidence for another subsequent written contract?
(c) Signature
Current rule: Name will suffice (Joseph Mathew v Singh Chiranjeev [2010] 1 SLR 338)
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o Signatures on the option were not necessary as a condition precedent to a binding agreement arising between
them and the respondents. The need to courier the option to purchase to the appellants for their signature was
merely a necessary part of the process of giving effect to a binding agreement (to grant an option) that had
already been entered into between the parties
o Furmston: It need not, in the popular sense of the word, be a signature at all. A printed slip may suffice, if it
contains the name of the defendant.
o Petit: Signature in the popular sense of putting pen to paper was not necessary. Typewriting or print might
suffice. What was required was that the person signing had to have shown in some way that he recognised
the document as an expression of the contract.
Name at the end or in the title of email would suffice
o SM Integrated Transware Pte Ltd v Schenker Singapore (Pte) Ltd [2005] 2 SLR(R) 651
(d) Joinder of Documents
Rule: Joseph Mathew v Singh Chiranjeev
o Where all documents are signed, they may be joined as long as they are connected
Party signing the documents have awareness of the documents.
No need for the documents to refer to each other.
o Where NOT all documents are signed, signed documents must either expressly or implicitly refer to the
unsigned documents.
o Rationale
Furmston: In order to protect honest intentions from undue pressure of technicality, judges have adopted
a lax interpretation of the requirement to allow a joinder of several documents
Treitel: Joinder is possible if (1) one document expressly or impliedly refers to the other or (2) when placed
side by side, it becomes obvious without the aid of oral evidence that they are connected
Cases
o Alrich Development Pte Ltd v Rafiq Jumabhoy [1995] 2 SLR(R) 340: Df signed a grant of an option to
purchase and tried to argue that there was no sufficient or note or memorandum. Court held that the
nomination forms were part of document since the option to purchase was signed.
CRITICISM:
Very lax attitude towards the requirements, especially for signature, joinder and reference to property following
Joseph Mathew
Erode the justifications and purpose of the writing formality

3.1.2

Rescuing a failed formality

Part Performance can be used to rescue the contract when the formalities requirements are NOT met.
UK: The doctrine of part performance has been abolished by s 4 of the 1677 UK Act
SG: The doctrine is still alive and the court can still enforce the equity, but NOT the contract, even if formalities
are not met, so long as there is part performance.
o Pf will still have the equitable interest if the contract was part performed.
Rule following Joseph Mathew v Singh Chiranjeev [2010] 1 SLR 338
o The PF ALWAYS needs to part perform
The df is seeking to rely on the lack of formality to void the ctt. Hence, the pf who is seeking an exception
to the lack of formality, the pf has to part perform.
o Old rule: Payment of money is not part performance because you cannot pinpoint the money to the contract.
o Current rule: Payment of money per se would NOT automatically result in a finding of part performance as
such payment might be equivocal in nature. Much would depend on the surrounding circumstances
Cheque has to be banked in for part performance since money has yet to be transferred to the df
ISSUES with part performance doctrine
o Lowers the value of the formality requirements in s 6(d), resulting in the erosion of its purpose, e.g. Cautionary
Tan Sook Yee p396-399
Before s6(d) of the Civil Law Act in 1993, the law governing formalities in contracts for sale of land in SG was
s4 of the Statute of Frauds
This Statute of Frauds 1677 was mitigated by equity the doctrine of part performance: whereby a valid oral
contract where there were sufficient acts of part performance can be enforced
When 6(d) of the civil law act came along, it reenacted s 4 of the Statue of Frauds in modern language
There was no provision for the retention of the doctrine of part performance in s6(d) of the Civil law act
(unlike England, who included in in their Law and property Act 1925 when they reenacted s4 of the Statute of
Frauds 1677 in modern language)
It is argued that this means that the doctrine has been abolished in SG (in Cutting the Apron Strings: The
Localisation of Singapores Land and Trust Law)
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However, AELA of 1993 which replaced s4 of Statute of Frauds 1677 with s6(d)[ref to JJW intro notes] was
NOT intended to change the law in SG courts have continued to apply the doctrine of PP.
The doctrine of PP:
o First, must determine if there was a concluded contract that is capable of being partly performed
Doctrine of PP allows parties to circumvent formalities requirement of s6(d), but it does NOT
allow them to use it when there isnt even an informally concluded agreement (oral or
otherwise)
Matter of construction from the facts of the case
If there is no concluded contract, there can be no PP
o If there is a concluded contract, we must then ask whether there are sufficient acts of PP?
Acts of PP must be such as would render it a fraud in the df to take advantage of the contract
not being in writing (Broughton v Stock 1938)
The acts of part performance that have to be established is the PP of the party trying to enforce
the contract (most of the time the pf)
The acts of PP of the df doesnt matter because it will just be to his own detriment if he
performed the contract partially and yet does not want it enforced
Leading modern case Steadman v Steadman:
Before this case the position was: acts done must be unequivocally referable to
some such agreement as that alleged
Mr and Mrs Steadman were joint owners of a house bought in 1963. In 1970, their
marriage was dissolved. It was agreed orally that Mr was to pay the conservancy
charges every month (anyway Mr was staying in the house and Mrs moved out
already), but in exchange, Mrs will sell her ownership of the house to Mr for 1500. So
Mr took out a loan for 1500 and paid 100 of the arrears in maintenance. Mrs then
refused to sign the deed of transfer that Mrs solicitor prepared.
Question was whether Mr steadmans acts were sufficient acts of PP.
HOL held that yes. All that was needed was if they prove the existence of some
contract and are consistent with the contract alleged
In terms of proof the favoured view is one of a Balance of probabilities. I.e. the acts of
PP must, on a balance of probabilities, refer to some contract bweteen the parties
and should NOT be inconsistent with the contract actually entered into (e.g. so if the
df says dont pay me, but the pf tries to transfer money to the df, then its not PP,
because it was inconsistent with what was agreed upon)
o Commentary on the case of Chiranjeev:
In this case the pfs (purchasers) paid a 1% deposit and the df (ventors) accepted the cheque by
depositing it in their account
Andrew Ang J in this case should have referred to the pfs act of payment of 1% as the act of PP.
However, he referred to the dfs act of accepting the cheque and depositing it in their acct as
the act of PP instead.
An explanation of this can be that: reference to the vendors actions ought to be regarded as
EVIDENCE that the act of PP was known by the vendors and that the vendors had acquiesced
in the act so as to indicate the requisite fraud upon which the doctrine is based.

Joseph Mathew v Singh Chiranjeev [2010] 1 SLR 338, noted Low (2010) 22 SAcLJ 704

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Applicability of doctrine of part performance in Singpaore:

The court went into a lengthy discussion on whether the doctrine of part performance is applicable in Singapore.
The court looked at various leading textbooks, the Explanatory Statement to the Application of English Law Bill as
well as the relevant Singapore Parliamentary Debates, Official Report; before coming to the conclusion that s6(d)
was a re-enactment of s4 of the 1677 UK Statute of Frauds 1677 while s40 of UK Law of Property Act 1925 was
only relevant for furnishing the modern language for s6(d). Basically, the doctrine of part performance was and
continued to be part of Singapore law by virtue of the general reception of English law and, subsequently, via s
3(1) of the Application of English Law Act.

Application of part performance in the case:
Although it used to be the case that the payment of money could never amount to part performance, this is no
longer the case. However, the converse does not necessarily follow inasmuch as the payment of money per se
will not automatically result in a finding of part performance as such payment might be equivocal in nature. Much
will depend on the surrounding circumstances. The doctrine of part performance has been satisfied in this case
by the payment of money which was effected by way of a cheque and having regard to the circumstances of
the case itself.

KLOWs Idealised world

Contract must be in writing and not evidenced by writing
o Like the UKs requirements
Clear requirements for the formalities, unlike current lax interpretation
No part performance but allow for recovery of money in tort for reliance loss.

3.2

Position Pending Completion

3.2.1 Constructive Trust

Maxim: Equity regards as done that which ought to be done

Equity creates a CONSTRUCTIVE trust when the formalities and contractual obligations are fulfilled, such that
the contract is specifically enforceable
o Although specific performance is usually a discretionary remedy, because land is unique, specific
performance would be granted for land and there are few bars
o Nevertheless, this is ONLY applicable if the contract is specifically enforceable: Walsh v Lonsdale
If s 6(d) CLA is NOT complied with, the ctt is not valid (but not void) and there is no constructive trust
Where injunctions are GRANTED
o Locus classicus: Lysaght v Edwards.
Basis of the imposition of the constructive trust is that the parties are entitled to the remedy of specific
performance
o Lee Christina v Lee Eunice [1993] 3 SLR 8
Facts: Eunice orally agreed to sell flat and Christina paid the deposit. Eunice wrote to the lawyers in July
1973 and asked them to act for her but unfortunately, she passed away before it was completed. Christina
Lee was in occupation of the flat and continued to pay rental. In June 1976, Christina asked for a refund of
the deposit
Holding: A contract for sale of land does NOT give rise to a constructive trust, unless it has performed in
everything but the more formal act of sealing the engrossed deeds
o Cheng-Wong Mei Ling Theresa v Oei Hong Leong [2006] 2 SLR(R) 637
Facts: Theresa entered into a contract for sale conditional upon getting a declaration for the right of way.
Holding:
Citing Lysaght v Edwards, it is clear in SG that the equitable ownership passes when the ctt is
enforceable and binding, i.e. sufficient in form and function so that there is no ground whatever for
setting it aside
Since the declaration is a condition precedent that can be waived by Theresa and the contract is
otherwise binding on Oei, specific performance was available and there is a constructive trust.
o Wong Chee Siong v Tan Boon Hwa [2010] SGHC 222
Facts: The pf purchased the flat from the df because it was near the purchasers work place and they wanted
to be near a good school. However, the sale fell through because the df could not settle the arrears owed to
HDB.
Holding:
Although s 51(10) Housing and Development Act states that no person shall become entitled to any
protected property under any resulting trust or constructive trust, it was held in Govindaraju and
another v Ganasen and another that specific performance available with regard to sale of HDB flat
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o Tan Chui Lian v Neo Liew Eng: Menon held that resulting trust and constructive trust are possible
Impecuniosity not a general defence.
o Golden Village Multiplex Pte Ltd v Marina Centre Holdings Pte Ltd [2002] 1 SLR 333
Facts: GV entered into a 15 years lease with Marina Centre and agreed that the lease will not be registered
because the parties did not want to go through sub-division process. Later, GV sought to set aside the lease.
Holding
While the agreement was void at law for failure to meet formality requirements, it was still a valid
agreement to lease (contract) that could be enforced in equity under the doctrine of Walsh v Lonsdale
Where injunctions are NOT GRANTED
o Good Property Land Development Pte Ltd v Societe Generale [1989] SLR 229, pp 242- 243
Facts: Pf applied for injunction to prevent mortgagee from selling property
Holding (HC):
When considering whether an injunction should be granted, courts have to consider whether a serious
question to be tried on the balance of convenience
The courts can consider whether damages an adequate remedy, i.e. whether land was purchased for
personal enjoyment or investment: Damages are an adequate remedy if it was for investment
The courts can also consider the effect of the order on the pf.
o Plaintiffs were insolvent and money owed to mortgagee is S$173 m. The interest accruing monthly is
S$ 1.7 million while monthly income is only S$ 350 k. If trial takes two years the debt will increase
by S$ 32 m. Since no one can be sure what is going to happen to property market, the court refused
to grant an injunction and ordered the sale.
o E C Investment Holding Pte Ltd v Ridout Residence Pte Ltd [2012] 1 SLR 32
Facts: Ridout sold the property first to E C Investment and subsequently to Chan. When E C found out
about it, it commenced proceedings to enforce the contract.
HC: Citing Canadian Supreme Courts decision in Sinnadurai Paramadevan and Blossom Paramadevan v
Bernard Semelhago and Good Property v Soc Gen, if someone is an investor and only in it for money,
damages is adequate and s.p. is not necessary
CA: Held that specific performance is an equitable and therefore, discretionary remedy but did NOT rule
on whether the HC test applies
ISSUES with Good Property and E C Investments looking at purpose of purchase to determine specific performance
and award damages instead
Measure of damages: The purpose of having a default specific performance for real property is that land is
unique and the damages are inadequate or incapable of being defined
o Value of land depends on market conditions and future events, which are unpredictable
Going against the orthodox manner of deciding whether to grant s.p.
o Looking at the purpose of the purchase should be IRRELEVANT
o Though it is okay for the court to look at Dfs interest in considering equity, it is IRRELEVANT for the court
to take into account the 3rd partys interest
Courts in E C Investment considered the fact that it would be unfair and cause great hardship to Orion
which had a charge over the balance of the sale proceeds of the Property after satisfaction of HLFs prior
interest.
However, Orion entered into the charge willingly and hence should take the risk of not getting any
balance from the sale proceeds. There are other ways for Orion to protect itself!
CA refused to take a stand on whether an investor should be entitled to s.p. in E C Investment
o Causes confusion about caveats because if you do not have an equitable interest (constructive trust), you
cannot lodge a caveat.

3.2.2

Purchasers Lien

Purchaser has a lien over the property that covers the part of the purchase price paid once there is a specifically
enforceable contract.
The lien is equitable since the purchaser does not have possession
Chip Thye Enterprises Pte Ltd v Development Bank of Singapore Ltd [1994] 3 SLR 613: NO lien because contract
was not specifically enforceable.
Importance
Contract of sale not completed, i.e. only the option to purchase is complete
Property eventually sold to a 3rd party by a mortgagee
o If purchaser has a lien, then purchaser can recover the money directly from the mortgagee.

3.2.3

Vendors Possessory Lien

Vendor can insist on possession of the land until purchase money has been paid.
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Common law lien since the vendor still has possession

However, vendor may be subject to a claim by the purchaser in damages as a constructive trustee, if he or she has
let the premises deteriorate.
o Phillips v Silvester (1872) 8 Ch App 173

3.2.3

Vendors Equitable Lien

When the vendor has parted with possession of the property, he has a lien over property for unpaid purchase price.
Equitable lien since there is no possession
Re Caveat No CV/21366D lodged by Lim Saw Hak [1996] 2 SLR 196
o Facts: Vendor sold property to purchaser for redevelopment and it was agreed that purchaser was entitled to
buy one unit in the new development. Vendor claimed that they had a vendors liens over property.
o Holding:
As the purchaser fully paid the purchase price, there was no vendors lien for the purchase money.
Further, the vendors had no interest in the entire property in its new state since there was no contract
because it was uncertain as to which unit the vendors were entitled to and the completion date.

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