Richard Cheung Teck Cheong and others v LVND Investments Pte. Ltd.

LVND Investments Pte Ltd (LVND) developed Macpherson Mall, a strata retail mall at 401 Macpherson Road, and from 2013 sold its shop units through Huttons and Savills. A brochure gave each unit's area in square feet with a footnote that the area included an air-con ledge; buyers also received a side letter with annexes (Annex E broke down each unit's area), and later a sale and purchase agreement (SPA) and a CD-ROM of documents. Because the mall had no central air-conditioning, each unit's condenser sat on ledges on the roofs, and some units included external advertising signage.

Of the original 16 plaintiffs in Suit No 204 of 2020, seven remained, owners of units #02-04, #03-02, #01-19, #03-01 and #02-20. After taking possession in 2016 they found the usable shop space smaller than they expected. They claimed that LVND had run a scheme to sell unsaleable roof space as air-con ledges to unsuspecting buyers, and alleged five kinds of misrepresentation about usable area, rental yield, tenant mix, the air-con ledges and the advertising signage. They sought rescission of their SPAs, or damages, for fraudulent or, alternatively, negligent misrepresentation. LVND denied making the representations, said its documents corrected any that were made, argued that two claims were time-barred and that the SPAs had been affirmed.

1. Whether the claims of the third and fifth plaintiffs were time-barred
2. Whether LVND ran a fraudulent scheme and made fraudulent misrepresentations
3. Whether actionable or negligent misrepresentations under s 2(1) of the Misrepresentation Act 1967 were made to each plaintiff and induced them to enter their SPAs
4. Whether the plaintiffs could still rescind their SPAs

The time bar failed. Following IPP Financial Advisors v Saimee bin Jumaat and another appeal [2020] 2 SLR 272, which disagreed with the earlier decision LVND relied on, the loss was contingent when the SPAs were signed and the causes of action accrued only on possession in 2016.

No fraud was shown. The side letter approach was an accepted industry practice adopted to give buyers more information, the annexes followed a logical order, and individual condensers on roof ledges were explained by tenant flexibility, the lack of space and the building's appearance. The plaintiffs called no expert evidence to the contrary. LVND, if anything, buried buyers in detail rather than hiding facts.

On negligent misrepresentation, the brochure's area figure, read with its footnote, did not represent usable floor area, and experienced property buyers would have queried what an air-con ledge meant. A complaint about the ledges themselves, such as access and racks, was at most a contract claim. The court did find false representations in some instances: an agent's recommendation of unit #03-02 to a buyer who said he needed 35 square metres of shop space, an agent's statement that its advertising panel would be digital, when the URA had already said it did not support such displays there, and an agent's e-mail implying that the stated area of unit #01-19 was usable floor area. But under Broadley Construction Pte Ltd v Alacran Design Pte Ltd [2018] 2 SLR 110, the SPAs, which these legally represented buyers are taken to have read, corrected them: Schedule B stated the estimated floor area including the air-con ledge and signage, a to-scale sketch showed the ledge, and the notes said signage must be static. For some buyers the side letter had also been explained in detail. The rental yield calculations on strata area were not shown to be false, the tenant mix claims were not proved, and one agent was not shown to act for LVND at all.

Even had a misrepresentation been made out, the plaintiffs had affirmed their SPAs by continuing to try to rent out their units after learning of the alleged problems by July 2018, and only sought rescission on 6 May 2019.

The High Court dismissed the remaining plaintiffs' claims in their entirety, finding no fraudulent, negligent or actionable misrepresentation, and held that in any event they had affirmed their SPAs. Costs were to be heard.