Case Details
- Citation: [2025] SGHC 212
- Title: Kwon Do Hyeong v Covenson Pte Ltd
- Court: High Court of the Republic of Singapore (General Division)
- Date of decision: 30 October 2025
- Originating Application No: HC/OA 1031/2024
- Judges: Philip Jeyaretnam J
- Plaintiff/Applicant: Kwon Do Hyeong (“Mr Kwon”)
- Defendant/Respondent: Covenson Pte Ltd (“Covenson”)
- Property: 8 Ardmore Park #19-01, Singapore 259963
- Legal areas: Land — Sale of land; Landlord and Tenant — Recovery of possession
- Core contractual themes: Whether “further payments” were consideration for an option or advance payments for the sale; forfeiture; holding over and double rent; reinstatement works
- Statutes referenced: Civil Law Act; Civil Law Act 1909
- Cases cited: [2025] SGHC 212
- Judgment length: 25 pages, 6,089 words
Summary
Kwon Do Hyeong v Covenson Pte Ltd [2025] SGHC 212 concerns a failed attempt to purchase a condominium unit and the legal characterisation of substantial “further payments” made during an extended option period. Mr Kwon exercised an option to purchase the property but subsequently decided not to proceed with completion. Covenson treated the sums received as forfeitable and, in addition, pursued claims for additional rent on the basis of holding over and for reinstatement-related costs.
The High Court (Philip J) dismissed Mr Kwon’s claim for the return of the further payments. The court held that the further payments were part of the consideration for the grant of the option (including the extended option period), rather than advance payments towards the purchase price that would be recoverable if completion did not occur. The court also allowed Covenson’s counterclaim for additional rent, reflecting the contractual and legal consequences of the tenancy continuing beyond its expiry while the property was not reinstated and was not promptly vacated.
What Were the Facts of This Case?
Mr Kwon first expressed interest in the property in or around December 2021. Through an estate agent, he proposed to purchase the unit for S$38.8m, with a booking fee structure that would fund the grant of an option. Initially, the proposal contemplated a four-week option period and a further fee for exercising the option within that period, followed by completion within a relatively short timeframe. Covenson agreed in principle but required a longer period after option exercise to prepare the property for handover.
In December 2021, the Singapore government announced an increase in Additional Buyers’ Stamp Duty (ABSD) for foreigners from 20% to 30%. Mr Kwon, who was in the process of applying for permanent residency, sought commercial relief from the ABSD increase. He requested either a longer option exercise period (18 months) or a lower offer price to reflect the additional ABSD burden. Covenson’s representative engaged internally and, after further negotiations, acceded to the request for an extended option period on the condition that additional payments be made during the longer option period and before the option could be exercised.
On 23 December 2021, Covenson granted the option to purchase agreement (“Option”). The Option set out the purchase price of S$38,800,000, an option fee of S$388,000, and two further payments: Further Payment 1 of S$1,552,000 and Further Payment 2 of S$16,820,000. These further payments were due on specified dates in January and February 2022, well before the option expiry date of 22 June 2023. The Option also provided for a deposit of S$1,000 and stipulated that completion would occur two weeks after the option was exercised.
Crucially, the Option linked the receipt of Further Payment 2 to Covenson’s agreement to “let” the property to Mr Kwon and Mr Kwon’s agreement to take out a tenancy. Accordingly, a tenancy agreement was signed on 17 February 2022 for a fixed term from 28 February 2022 to 22 June 2023. In addition to monthly rent of S$40,000, Mr Kwon had to pay a lump sum rental of S$640,000 prior to commencement. The property was handed over on 28 February 2022 with fixtures installed. Mr Kwon renovated the unit and lived there with his family between around June and August 2022.
On 17 May 2023, Mr Kwon exercised the Option by returning the countersigned Option and the S$1,000 deposit. On 19 May 2023, Covenson’s counsel wrote to Mr Kwon’s counsel appending a completion account showing the balance moneys due as S$19,456,553.30. By that date, Covenson had received S$19,401,000 from Mr Kwon, comprising the option fee, both further payments, the deposit, and the lump sum rental. The scheduled completion date was 31 May 2023 (two weeks after exercise). However, on 31 May 2023, Mr Kwon’s counsel informed Covenson that Mr Kwon had decided not to proceed with the purchase and would not be completing the transaction.
Covenson then issued a notice to complete within 21 days pursuant to Condition 15 of the Law Society of Singapore’s Conditions of Sale 2012. Mr Kwon did not comply. The contract for sale and purchase terminated on 22 June 2023, and the tenancy ended. It was undisputed that the property was not reinstated. The property was vacated only on 21 July 2023 and handed back to Covenson on 25 July 2023. Rent for the period from 23 June to 22 July 2023 was paid on 24 July 2023.
Between August 2023 and January 2024, Covenson removed items left behind and commissioned partial reinstatement works costing S$32,585.20. Later, on 20 December 2024, Covenson granted a new option to purchase to another purchaser. That option was exercised on 17 January 2025 and completion took place on 13 March 2025. Covenson agreed to bear certain costs in the resale arrangement, including repair/replacement/refurbishment costs and certain management and agent-related fees incurred between the original completion date and the eventual completion date.
What Were the Key Legal Issues?
The case turned on two main issues. First, the court had to determine the legal character of the “further payments” made during the extended option period. Mr Kwon argued that these were advance payments for the purchase of the property and therefore should not be forfeited when completion did not occur. Covenson contended that the further payments were part of the consideration for the grant of the option—particularly the grant of an extended option period—and were therefore forfeitable upon termination.
Second, the court had to address the consequences of the tenancy and holding over after the option was exercised but completion did not proceed. Covenson counterclaimed for additional rent on the basis that Mr Kwon had held over the property for a period after the tenancy expired, and that double rent was chargeable for the duration of holding over. The court also had to consider reinstatement-related costs, including whether and to what extent Covenson could recover such costs as part of its counterclaim.
How Did the Court Analyse the Issues?
On the first issue—whether the further payments were advance payments or option consideration—the court focused on the contractual structure and the economic bargain reflected in the Option. The Option expressly set out the option fee and the further payments as separate sums, each with its own due dates. The court considered the timing and purpose of these payments: the further payments were payable before the option could be exercised and before the option expiry date. This timing was consistent with payments made to secure the seller’s commitment to keep the property available for the buyer during the extended option period.
More importantly, the court relied on the internal logic of the Option’s terms. Clause 3 provided that upon receipt of Further Payment 2, Covenson agreed to “let” and Mr Kwon agreed to take out the tenancy. This linkage between Further Payment 2 and the grant of the tenancy supported the conclusion that the further payments were not merely prepayments towards the purchase price, but were part of the overall consideration for the option package that included both the extended option period and the right to occupy the property under a tenancy during that period.
The court also addressed Mr Kwon’s argument that the further payments should be treated as advance payments for the sale. While advance payments may sometimes be recoverable if the sale does not complete, the court’s analysis emphasised that contractual characterisation is determined by the parties’ agreement as a whole. Here, the further payments were not framed as instalments of the purchase price payable upon completion. Instead, they were structured as payments made during the option period, with the option fee and further payments forming a composite consideration for the option grant. The court therefore found that Covenson was entitled to forfeit the further payments when the sale did not proceed.
On the second issue—additional rent for holding over—the court examined the tenancy’s expiry and the period during which Mr Kwon remained in possession. The tenancy was for a fixed term ending on 22 June 2023. Although the contract for sale and purchase terminated on that date, Mr Kwon did not vacate until 21 July 2023 and did not hand back the property until 25 July 2023. The court accepted that this amounted to holding over beyond the tenancy term. The practical consequence was that Covenson was entitled to additional rent, and the court allowed the counterclaim for additional rent.
The court’s approach reflects a common principle in landlord-tenant disputes: where a tenant remains in possession after the expiry of the tenancy, the landlord may claim additional rent or damages consistent with the contractual and legal framework governing holding over. In this case, the court treated the holding over as triggering the contractual consequence of double rent for the relevant period, aligning the remedy with the parties’ bargain and the policy of preventing a tenant from benefiting from continued occupation without paying the appropriate rate.
As to reinstatement works, the court noted that it was undisputed the property was not reinstated when it was vacated. Covenson had commissioned partial reinstatement works and incurred costs. During the hearing, Covenson clarified that if Mr Kwon’s claim were dismissed, it would narrow its rectification costs counterclaim to a reduced figure. The court’s reasoning indicates that reinstatement costs were assessed in light of what had been incurred and what remained recoverable given the procedural posture and the scope of the counterclaim.
What Was the Outcome?
The High Court dismissed Mr Kwon’s claim for the return of the further payments. The court held that the further payments were part of the consideration for the grant of the option, including the extended option period, and were therefore not refundable on the termination of the sale when completion did not occur.
The court allowed Covenson’s counterclaim for additional rent arising from holding over. While Covenson’s counterclaims included reinstatement-related costs and other damages, the judgment’s operative effect (as reflected in the court’s earlier decision and the elaborated reasons) was that Mr Kwon’s forfeiture challenge failed and Covenson obtained monetary relief for the period of continued occupation beyond the tenancy term.
Why Does This Case Matter?
This decision is significant for practitioners dealing with option-to-purchase structures in Singapore real estate transactions, particularly where the option is extended and the buyer is granted occupation rights through a tenancy. The case underscores that courts will look closely at the contractual architecture—especially timing, allocation of risk, and the linkage between option consideration and ancillary rights such as tenancy—to determine whether payments are truly “advance payments” or are instead consideration for keeping the option open.
For buyers and their advisers, the case is a cautionary reminder that substantial sums paid during an option period may be characterised as non-refundable consideration even if the buyer later decides not to complete. For vendors, the case provides support for enforcing forfeiture provisions where the option agreement clearly frames such payments as consideration for the option grant and where the seller has granted corresponding benefits (such as extended availability and tenancy rights). In disputes, the court’s reasoning suggests that documentary linkage clauses—such as provisions tying receipt of a payment to the grant of a tenancy—can be decisive.
For landlords and tenants, the decision also illustrates the financial consequences of holding over after tenancy expiry. The court’s willingness to award additional rent for the holding over period reinforces the importance of timely vacating and reinstating, and it highlights that even where rent has been paid for part of the period, additional rent may still be claimable depending on the contractual regime and the duration of occupation.
Legislation Referenced
- Civil Law Act (Singapore)
- Civil Law Act 1909
Cases Cited
- [2025] SGHC 212
Source Documents
This article analyses [2025] SGHC 212 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.