Lord Brightman:

This appeal from the Court of Appeal of Singapore raises a short point on a contract for the sale of land: whether a provision in the contract for the payment of liquidated damages in the event of the vendor's delay in completion is valid, and, if so, to what extent it applies on the facts of the instant case.

In or about 1971 the appellant ("the vendor") started to develop a building estate in Singapore known as the Phoenix Heights Estate. Phase 2 of the development consisted of the erection of some 100 buildings for use as houses, flats and shops.

Such a development is governed by certain ordinances and regulations, to some of which it is necessary to refer. Under s. 9(1) of the Planning Act, the development of land requires the permission of the competent authority. Under sub-section (3) of that section the "sub-division" of land requires a similar permission. "Sub-division" has a defined meaning in the Act, but for present purposes, it is sufficient to say that this sale, being a part disposal of the vendor's estate, involved a subdivision.

The Local Government (Building) Regulations 1966 deals with fitness for occupation. Under reg. 34(1) a certificate of fitness for occupation of a building is to be given when (shortly stated) the Chief Building Surveyor or his authorised officer has inspected the building and is satisfied that it conforms with the approved plans. Under sub-rule (3) it is unlawful for a person to occupy a building, or to permit it to be occupied, unless a certificate of fitness for occupation has been issued. There is, however, a proviso

that the chief building surveyor may in his discretion grant a licence for the temporary occupation of such building for a period not exceeding six months, in cases where only minor deviations from the approved building plans in respect thereof have been made and pending full compliance with the requirements of the chief building surveyor before the issue of a certificate of fitness.

Lastly it is necessary to refer to the Housing Developers Rules 1965, which were made under the Housing Developers (Control and Licensing) Ordinance 1965, and were amended by the Amendment Rules of 1967. Rule 9(A) of the amended Rules provides (sub-rule 1) that an agreement for sale between a housing developer and a purchaser shall be in the form prescribed in a schedule thereto, and (sub-rule 2) that no amendment, deletion or alteration to any such form shall be made except with the approval of the Controller of Housing.

On 6 January 1973 a written agreement ("the sale agreement") was made between the vendor and the respondents ("the purchasers") for the sale to the purchasers of a plot forming part of the Phoenix Heights building estate, and for the erection thereon of a detached dwelling house which came to be known as No. 8 Phoenix Garden. The sale agreement followed the prescribed form.

The purchase price was $180,000 payable by instalments as the building advanced. The payment of the final instalment was regulated cl. 3(h) in the following terms -

On completion of the sale and purchase herein as hereinafter provided and on delivery to the purchaser of vacant possession of the property sold the balance of 10% of the purchase price, 5% of which shall forthwith be paid to the vendor and the remaining 5% shall be paid to the purchaser's solicitors as stake-holders to be paid to the vendor only on production of the certificate of fitness for occupation of the chief building surveyor in respect of the building.

Clause 10 of the sale agreement provided that the vendor should at its own expense obtain the approval of the competent authority to the necessary subdivision.

Clause 11 of the sale agreement is the crucial one. In reading the clause it will be convenient to divide it into its component parts.

(A) The sale and purchase herein shall be completed at the office of the vendor's solicitors 14 days after the receipt by the purchaser or his solicitors of the notice t