RUNAWAY lawyer Zulkifli Mohd Amin had moved more than $10 million out of his firm’s client’s account over a 10-month period in 2007, a sum larger than the $6 million previously thought.

These details emerged in a 56-page report by a disciplinary tribunal comprising retired Judge of Appeal L.P. Thean and lawyer Tan Chuan Thye.

The tribunal, appointed in August last year by the Chief Justice to formally investigate the case, found Zulkifli guilty of a total of 211 charges of misconduct.

Zulkifli was one of three partners of the now-defunct firm of Sadique Marican and ZM Amin.

He is not around to face the music, but his partners, Mr Mohd Sadique

Ibrahim Marican and Mr Anand Kumar Toofani Beldar, will have to face a Court of Three Judges for breaching accounting rules and failing to safeguard clients’ money.

Out of the 211 charges against Zulkifli, 208 are related to unauthorised withdrawals of funds from the account used to hold clients’ money.

The remaining charges were for failing to ensure that the client’s account was not overdrawn and failing to keep the books in order.

The accounts of the firm were managed by Zulkifli.

The other partners have each been found guilty of three charges of failing to keep the books in order and failing to supervise transactions involving clients’ money.

In November 2007, Mr Sadique and Mr Anand told the Law Society that Zulkifli was missing and they suspected him of misappropriating money from the firm.

The firm’s accounts were inspected.

Among other things, it was found that the firm had been issuing cash cheques after May 15, 2007 even though it was no longer allowed to do so under the rules.

Fund transfers were made and cash cheques were issued without supporting documents.

Although Mr Sadique’s signature appears on some forms and cheques, a handwriting expert has concluded that they were forged.

The 211 charges form the most serious of three separate disciplinary proceedings against Zulkifli. The tribunal has found that the case is serious enough to be referred to the Court of Three Judges, which has the power to suspend or strike lawyers off the rolls.

On Tuesday, another of the three cases, involving Zulkifli’s inaction in a conveyancing transaction that caused his clients to lose out on a property deal, was brought before the Court of Three Judges by the Law Society seeking to disbar Zulkifli.

This drew criticism from the judges, who questioned why the society brought up less serious charges when it was well-known that Zulkifli had done worse. The court asked for more details about his other disciplinary proceedings.

Yesterday, it emerged that Zulkifli was found guilty earlier this month of the 211 charges. Both cases will be dealt with together by the court.

The third case is pending.

According to sources, the less serious complaint was made in November 2007 and the disciplinary tribunal, in its report in October last year, said the matter should be brought to the Court of Three Judges.

By law, the society had a one-month deadline to make the application.

It is understood that the society had considered deferring the less serious case, but as it was unsure how long it would take to investigate the 211 charges, it decided to go ahead with the less serious case.

Source: Straits Times, 27 Feb 2010

MINORITY owners have had a key victory in yet another court fight over the failed $500 million Horizon Towers en-bloc deal.

An assistant registrar in the High Court yesterday threw out a bid by two former members of the sales committee to halt an action against them by the owners.

The three sets of minority owners are suing the two – ex-committee chairman Arjun Samtani and ex-member Tan Kah Gee – over costs incurred when they tried to block the collective sale.

They want to be reimbursed for more than $800,000 in costs. This includes the cost of hiring lawyers to advise them and other administrative costs.

The sum is expected to be partially offset when the costs awarded to the owners by the Court of Appeal last year, after the en-bloc deal was quashed, are assessed.

The owners argue that both committee members were ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’, according to court documents.

Lawyers for the committee members countered that the minority owners’ suit should be struck off as the action was ’scandalous, frivolous (and) vexatious’. They also pointed out that the Court of Appeal awarded costs last April in a case that dealt with all outstanding issues of reimbursement.

But the minority owners argued that the new case is different from the one settled last year.

In that case last year, costs were awarded for the minority owners’ conduct in opposing the proposed sale by the consenting majority owners.

The present action is different as it is based on what they claim is the lack of good faith in the collective sale deal struck by Mr Arjun and Mr Tan as members of the sales committee.

They allege that this ‘lack of good faith’ resulted in minority owners having to put in a great deal of effort and spend a lot of money to oppose the sale.

In effect, they claim there was a breach of fiduciary duties and they want to be compensated for the costs from the resulting damages.

Mr Kannan Ramesh, who is acting for the owners, said in his submissions: ‘The causes of action in both cases are appreciably different.’

At a closed-door hearing yesterday, assistant registrar Leong Weng Tat ruled in a reserved judgement that the suit by the minority owners should proceed.

Mr Arjun and Mr Tan, represented by Mr N. Sreenivasan and senior counsel Tan Cheng Han respectively, can appeal to the High Court against the decision, otherwise the case will advance to a full hearing. Lawyers say either way, the case may eventually go to the Court of Appeal.

The Horizon Towers collective sale spanned more than two years and involved two Strata Titles Board hearings and two High Court hearings before being thrown out by the Court of Appeal last year.

Source: Straits Times, 25 Feb 2010

High Court dismisses striking out action by 2 former sales committee members

The latest legal tussle involving Horizon Towers looks set to go into full swing, with the High Court having dismissed the action by the two defendants to strike out the lawsuits filed against them.

This means the court will hear the claims brought by three sets of minority owners against the two former sales committee members – unless the defendants succeed in appealing against yesterday’s decision.

BT understands that the first defendant – former sales committee chairman, Arjun Samtani – will appeal the High Court decision, while the second defendant, Tan Kah Gee, is still deliberating if he should appeal.

The High Court yesterday also ordered both Mr Samtani and Mr Tan to jointly bear the costs of the striking-out application and the court hearing – amounting to a total of $6,000.

The minority owners are suing the two former sales committee members to reclaim close to $1 million in legal and administrative costs which they say they incurred during the lengthy fight to keep their homes.

The en bloc sale of Horizon Towers was a saga that dragged out for more than two years, and involved several High Court and Strata Titles Board hearings. The Court of Appeal eventually decided in April last year that the deal could not go through because the development’s sales committee had failed in its duty.

The Court of Appeal had ordered the bulk of costs to be borne by the development’s potential buyer, Hotel Properties Ltd (HPL), and its majority owners.

But three sets of minority owners, represented by Kannan Ramesh of Tan Kok Quan Partnership, are now seeking compensation for the sums not covered by the Court of Appeal judgment. The three sets of owners are seeking between $117,000 and $370,000 in costs – making for a total claim of more than $800,000.

The minorities say they were made to defend their homes against an en bloc process actuated by a lack of good faith on the part of the sales committee, and had to spend much for their effort.

They said Mr Samtani and Mr Tan were ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’.

In his defence, Mr Samtani – represented by N Sreenivasan of Straits Law Practice — said he was not alone in driving the sale process. He said ‘each and every member of the SC (sales committee) played an equally important role’ and that he ‘did not have any special powers’ that could influence the committee’s decisions.

Mr Samtani also claimed that the committee ‘followed up on all expressions of offer’ for Horizon Towers and that it received no offer better than HPL’s at the relevant time. He said the committee was advised by its lawyers to proceed with the HPL offer.

Mr Tan, represented by Senior Counsel Tan Cheng Han and Ian Lim of TSMP Law Corporation, said he was ‘not a key player’ and cited various correspondence and minutes of sales committee meetings which he said showed that he did not play a major role in the various aspects of the collective sale.

Mr Tan also said that the sales committee did not seriously consider an alternative offer made at the time by a Vineyard Holdings, as it had ‘questioned the credibility of the expression of interest from Vineyard and their level of seriousness given that Vineyard was a Hong Kong company that was not well known and its lawyers were not from a Singaporean firm, but from a small Malaysian law firm’.

He claims he suggested waiting for a higher offer, but that the majority of the sales committee did not agree. He said the sales committee genuinely felt they would not get a better offer than the one by HPL, and that they had been advised by their lawyers to accept the offer.

Mr Tan had also sought to strike out the minorities’ suits against him and Mr Samtani, saying that the entire remedy sought by the minorities was already dealt with by the Court of Appeal last April, when it decided on how it would award costs to the various parties. But the High Court chose to dismiss this application yesterday.

The defendants have 14 days to submit their appeal.

Source: Business Times, 25 Feb 2010

HE SKIPPED town with a purported $6 million in clients’ money, yet the Law Society used relatively minor charges of misconduct as a basis to get lawyer Zulkifli Mohd Amin disbarred.

The move puzzled the Court of Three Judges, the highest disciplinary body in the legal profession, which has powers to suspend or strike wayward lawyers off the rolls.

Justice V.K. Rajah said he was perplexed at why the Law Society had laid some minor charges against Zulkifli.

‘We all know that this is a lawyer who absconded with the second largest amount of money in Singapore’s legal history,’ he said.

But the relatively minor charges Zulkifli faced, added Justice Rajah, did not show the gravity of what he had done.

Chief Justice Chan Sek Keong remarked that the court should not be hearing disciplinary proceedings in stages.

He said that if the court felt the facts of the current case did not warrant Zulkifli being struck off, that means the Law Society would have to come back again with another set of charges.

Chief Justice Chan said there was ’something very wrong’ with the way the Law Society was going about handling the case, describing it as ‘worrying’.

The court adjourned the case to Friday for the Law Society to provide information on what else Zulkifli is said to have done, how much he had absconded with and details of any other pending disciplinary proceedings against him.

When contacted, a Law Society spokesman said the society was unable to comment as the matter is still pending.

Zulkifli, who had practised law since 2000, made headlines when he fled in November 2007, reportedly with $6 million in clients’ funds meant for property deals.

Yesterday, Mr Anthony Lee, counsel for the Law Society, applied to the Court of Three Judges to strike Zulkifli off the rolls over a specific conveyancing transaction.

In the case, he did not swipe any money, but his failure to follow up and keep his clients informed of the progress of the transaction caused them to lose out on a property deal in 2007.

The clients, a married couple, had engaged Zulkifli to act for them in a property purchase. They had issued cheques for the necessary payments and got a bank loan, but Zulkifli neither made the payments to the developer, nor did he draw down from the loan to meet the payments.

He also failed to tell his clients about the numerous notices and reminders for payment.

As a result of not getting the payments, the developer annulled the sale. Last year, a two-man disciplinary tribunal found Zulkifli guilty of misconduct.

He remains at large.

Source: Straits Times, 24 Feb 2010

The Ministry of Law is proposing that law firms set up a new type of bank account – a conveyancing account – for lawyers to hold funds entrusted to them by homebuyers and sellers.

The pilot trial of the new scheme could take place as soon as April this year, with the entire scheme taking off as early as next year, BT understands.

These conveyancing accounts will have a host of security measures in place to make sure that lawyers cannot abscond with clients’ money, such as requiring signatures from both the buyer’s and the seller’s lawyers before any money can be moved.

‘A home is often a person’s most substantial asset. The money intended for its purchase and arising from its sale should be properly protected,’ the Law Ministry said in a statement yesterday.

The proposed changes follow the infamous case involving lawyer David Rasif, who ran off with some $10 million of his clients’ money in 2006, as well as other recent cases in which lawyers absconded with their clients’ conveyancing money.

Conveyancing money, which is used for housing transactions, includes stamp duty payment and option deposits. A seller receives an option deposit – typically 4 or 9 per cent of the purchase price, which a buyer pays – once the option to purchase is exercised.

The law currently does not prohibit lawyers from holding clients’ conveyancing money.

In a public consultation paper released in August 2009, the Ministry of Law suggested prohibiting lawyers from holding any conveyancing money. The Singapore Academy of Law (SAL) will be the main entity appointed to hold conveyancing money, the paper said then.

But after public feedback – which included suggestions to allow banks to hold conveyancing money – the ministry has made revisions to the proposed measures. A second public consultation paper was released today.

Under the newest set of measures, approved banks will be permitted to open conveyancing accounts for law firms. But, as an alternative, buyers and sellers may still choose to use the service provided by SAL to hold option deposits in private property or HDB industrial/commercial property transactions.

The Law Ministry also said that a central signature repository will be established to allow the approved banks and SAL to check the signatures.

A pilot trial of the proposed measures will be conducted soon. BT understands that about 30 law firms and the three local banks – DBS Bank, United Overseas Bank (UOB) and OCBC Bank – will be involved in the pilot, which could take place in April and May this year. The new measures could be implemented in early 2011, sources said.

Lawyers welcome the new proposed measures, though they add that it will mean more time for administrative procedures, such as getting the counter signatures.

They also highlight some concerns. For one thing, they say the cost to customers could increase if banks charge a fee for the conveyancing accounts. For another, the interest earned from these accounts will be kept by the banks, as opposed to the current practice where interest earned from law firms’ client accounts is returned to the clients.

Source: Business Times, 18 Jan 2010

Says he was not a key player in en bloc deal sales committee

The newest instalment of the Horizon Towers saga has taken a fresh turn, with one of the parties being sued now applying for the lawsuits against him and another to be struck out.

Tan Kah Gee, a member of the original sales committee being sued by a group of minority owners, yesterday applied to the High Court for the suit to be struck out – saying the action was ’scandalous, frivolous (and) vexatious’.

He also filed his defence against the claims made against him, saying he was not a key player in the sales committee which brokered the en bloc sale of the development.

Mr Tan – and former sales committee chairman Arjun Samtani – are being sued by three sets of minority owners, who are looking to reclaim close to $1 million in legal and administrative costs which they say they incurred during the lengthy fight to keep their homes.

The minorities say they were made to defend their homes against an en bloc process actuated by a lack of good faith on the part of the sales committee, and had to spend much for their effort.

The collective sale of Horizon Towers was an affair which spanned more than two years and involved two Strata Titles Board (STB) hearings and two High Court hearings before finally being decided in the Court of Appeal.

The Court of Appeal ruled against the sale of the development in April last year, saying the sales committee failed to get the best price possible for Horizon Towers. It awarded costs for the second High Court hearing, the second STB hearing and the Court of Appeal hearing to the minority owners who had objected to the sale.

But the minority owners are now suing Mr Tan and Mr Samtani to claim sums which they said they had spent in excess of what the Court of Appeal has awarded them. The three sets of owners are seeking between $117,000 and $370,000 in costs – making for a total of more than $800,000.

But Mr Tan – through his lawyers Senior Counsel Tan Cheng Han and Ian Lim of TSMP Law Corporation – has moved to strike out their claim. He says the entire remedy sought by the minorities was already dealt with by the Court of Appeal last April, when it decided on how it would award costs to the various parties. He said their claim ‘does not form a legitimate item of damage in a separate cause of action’, neither does it ‘flow from a different and additional wrong’ from the Court of Appeal judgment.

Mr Tan also responded to allegations made by the minorities that he was one of the ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’.

In his defence, he claimed he was ‘not a key player’ and cited various correspondence and minutes of sales committee meetings which he said showed that he did not play a major role in the various aspects of the collective sale.

He also responded to the minorities’ claim that he and Mr Samtani ‘pushed for a quick sale of the property for their personal benefit’ because both had bought additional units in Horizon Towers, at the start of the collective sale process, and were keen to profit from that.

Mr Tan’s defence was that he bought a second unit because the location and price were very attractive, and that he had acted in good faith at all times. He said he disclosed his purchase of a second unit to the rest of the sales committee, as well as to one of the minority owners now suing him. He claims he also disclosed the purchase to the sales committee’s legal advisers and was told that he did not have to disclose the purchase of this unit.

The minorities had also claimed, in their suit, that the sales committee had failed to follow up on alternative offers for Horizon Towers, including a higher offer from a Vineyard Holdings. They cited the Court of Appeal judgment, which ruled that the sales committee had failed ‘to proactively follow up on the Vineyard offer and other expressions of interest’.

Mr Tan said Vineyard’s and other expressions of interest ‘never substantively materialised’ and that the sales committee had ‘questioned the credibility of the expression of interest from Vineyard and their level of seriousness given that Vineyard was a Hong Kong company that was not well known and its lawyers were not from a Singaporean firm, but from a small Malaysian law firm’.

He claims he suggested waiting for a higher offer, but that the majority of the sales committee did not agree. He said the sales committee genuinely felt they would not get a better offer than the one by Hotel Properties Ltd (HPL), and that they had been advised by their lawyers to accept the offer.

The minorities will have 14 days to respond to Mr Tan’s defence – and 14 days to respond to Mr Samtani’s defence, which was filed last Wednesday. The court will also convene a date for the hearing of Mr Tan’s striking-out summons.

The minority owners are represented by Kannan Ramesh of Tan Kok Quan Partnership. Mr Samtani is represented by N Sreenivasan from Straits Law Practice.

Source: Business Times, 27 Jan 2010

Suit filed against some members of original sales panel

A fresh lawsuit has just been filed over the failed en bloc sale of Horizon Towers – and a new chapter in the long-running saga is about to begin.

It’s a suit that’s set to be a closely watched one in Singapore, seen as a litmus test for the possible legal action that can be brought to bear against those involved in this, as well as all other, en bloc sales.

A group of Horizon Towers’ minority owners – those who had originally opposed the sale of the Leonie Hill development – are now suing some members of the original sales committee for their handling of the en bloc sale.

According to documents filed with the High Court, these minority owners are looking to reclaim close to $1 million in legal and administrative costs which they say they’ve incurred during the lengthy fight to keep their homes.

The sale of Horizon Towers – first tabled for $500 million to Hotel Properties Ltd (HPL) in January 2007 – has been one of the most dramatic and long-drawn- out en bloc battles in Singapore’s history. The whole affair spanned more than two years and went back and forth between the Strata Titles Board (STB) and the High Court twice before finally being decided in the Court of Appeal.

The Court of Appeal ruled in April last year that the deal could not go through because the development’s sales committee had failed to fulfil its duty on several counts.

And now, three sets of minority owners – represented by Kannan Ramesh of Tan Kok Quan Partnership – have cited that landmark judgment, as a basis on which to seek reimbursement for the hundreds of thousands they have each spent in this battle.

They have served writs on former sales committee chairman Arjun Samtani and member Tan Kah Gee, alleging that they were ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’.

The minorities, in their claim, allege that Mr Samtani and Mr Tan had ‘pushed for a quick sale of the property for their personal benefit’, because both had bought additional units in Horizon Towers, at the start of the collective sale process, and were keen to profit from that.

Their statement of claim frequently cites the Court of Appeal judgment which had accepted, as facts of the case, that:

# Mr Samtani and Mr Tan had bought additional units in the development;

# The sales committee had received an alternative higher offer of $510 million from Vineyard Holdings, one day before HPL verbally indicated it was willing to purchase the development for $500 million; and

# The sales committee agreed to go ahead and sell Horizon Towers to HPL, in spite of a suggestion from one committee member that it seek the approval of the other consenting owners because property prices had shot up, because it was concerned that the deal would fall through if the other owners were consulted.

Justice Rajah, in his judgment, had also ruled that HPL and the estate’s majority owners should share the legal costs for the second High Court hearing, as well as the Court of Appeal hearing – and that the majority owners should bear the costs for the second STB. He also allowed two minority objectors who did not participate in the final appeal to be given 80 per cent of the costs incurred in the second STB and High Court hearings.

The minority owners are now seeking compensation for the sums not covered by Justice Rajah’s judgment. The three sets of owners are seeking between $117,000 to $370,000 in costs – making for a total claim of more than $800,000.

In his defence, filed with the High Court, Mr Samtani states repeatedly that he was not alone in driving the sale process. He said ‘each and every member of the SC (sales committee) played an equally important role’ and that he ‘did not have any special powers’ that could influence the committee’s decisions.

Mr Samtani also claimed that the committee ‘followed up on all expressions of offer’ for Horizon Towers and that it received no offer better than HPL’s at the relevant time. He said that, on the advice of the committee’s lawyers, Drew & Napier, the committee proceeded with the HPL offer.

As for the additional unit he purchased, Mr Samtani said that it ‘was not for investment, instead it was for use by his son’. He claimed he had disclosed the purchase of an additional unit to Drew, and was not advised by Drew that he had to announce it to the other consenting owners.

Mr Tan, who is represented by TSMP Law Corporation, has requested an extension of time to file his defence. Mr Samtani is represented by N Sreenivasan from Straits Law Practice.

Source: Business Times, 26 Jan 2010

THE Law Ministry has tweaked proposed changes restricting lawyers’ access to their clients’ money in property deals and is going for a second round of public consultation before finalising changes.

The new suggestions will let conveyancing lawyers hold their clients’ money, although a string of safeguards will be put in place to make it that much harder for them to run off with the funds.

In the first round of public consultations last August, the ministry had suggested that lawyers no longer be able to deposit conveyancing money into their regular clients’ accounts and that the Singapore Academy of Law (SAL) be the main entity to hold it.

But after feedback, the ministry tweaked the measures to allow clients to choose to leave money matters with their lawyers but to be kept in approved banks, or leave it in the hands of the SAL.

The moves are geared towards providing a final solution to the longstanding problem of lawyers running off with their clients’ money. In the last six years, at least four rogue lawyers have fled with almost $20 million in funds meant for property transactions and held in client accounts in their law firms.

Conveyancing funds include the option to buy deposits, purchase and CPF money as well as the stamp duty payable on the deals. These typically come up to at least a six-digit sum for an average private property transaction.

Last year, about 33,000 private homes were sold. In addition, the HDB recorded some 28,441 flat resale deals, based on its last annual report ending March 2009.

Under the new proposals, law firms will have to open up a separate conveyancing account in approved banks which is separate from the client’s account.

Money from such conveyancing accounts can be withdrawn only with the signature of the lawyers of both parties of the property transaction and the payout will be only via cashier’s order.

In addition, the ministry will also appoint a party to set up a central signature repository of lawyers’ signatures to allow the banks and the SAL to check the counter-signatures against the records.

Lawyers will be allowed to hold up to $5,000 of their client’s money in their regular accounts, if their clients approve, to deal with last-minute payments and miscellaneous costs incurred in transactions.

For en bloc projects, they will be allowed to keep up to $2,000 per unit, subject to a $200,000 cap.

To give the changes bite, new legislation will be tabled in due course to subject those who breach the rules against keeping such conveyancing funds to fines of up to $50,000 or three years’ jail.

The proposals are not expected to slow down the transactions, which typically take two to three months to complete.

A trial run involving SAL and the three local banks – DBS, OCBC and UOB – on 400 new property deals will be conducted in April and May to iron out any kinks in the system.

Source, Straits Times 18 January 2010

A PRIVATE investigator is suing five lawyers for professional negligence over the sale of his house in 2002.

Mr Simon Suppiah Sunmugam, 62, alleged that they had mistakenly paid property agency ERA $28,000 as a commission.

He said in his affidavit that he found the buyer of the property. The agency, therefore, did not deserve any payment.

The lawyers he is suing are Ms Amarjit Kour, Mr Gregory Tang Wee Thiang, Ms Belinda Ang Choo Poh and Mr Peter Cuthbert Low of the now-defunct firm Peter Low Tang & Belinda Ang. The firm represented his ex-wife Nee Shyam Huey in their May 1996 divorce.

The fifth lawyer he is suing is Mr Andrew John Hanam, who acted for him in the divorce.

The defence of the four lawyers is that they were hired by Madam Nee and not by Mr Suppiah, and thus owed him no professional obligation.

Mr Hanam is denying responsibility on the grounds that the sale of the Suppiahs’ matrimonial home after the divorce was arranged by the other lawyers, so Mr Suppiah should refer to them to recover his losses.

Court documents showed that when Mr Suppiah defaulted in the divorce settlement, Madam Nee obtained a court order to sell the matrimonial home in Punggol.

She found a buyer for $1.6 million but Mr Suppiah objected because the price was too low. He then found a neighbour who was willing to pay $1.75 million.

He was expecting his share of the sales proceeds to reach $240,000, but received only $212,000 in July 2002.

When he discovered that a commission of $28,000 had been paid to the housing agent, he instructed Mr Hanam to write to the other lawyers to withhold payment. But it was too late.

At the opening of the civil suit yesterday, Mr Suppiah took the stand to tell his lawyer Alain A. Johns that despite the sale-and-purchase agreement, which did not authorise payment of the housing agent’s commission, the five lawyers failed to protect his interest.

The hearing will continue next year.

Source: Straits Times, 12 Nov 2009

FAILING to sign the option-to-purchase form may not be enough to let one pull out of a property deal.

This is especially so if the buyer’s deposit has been banked in and there are e-mail exchanges to show that a deal had been agreed upon, the Court of Appeal has ruled.

The case in point – the sale of an apartment in an Upper Serangoon condominium in May 2007.

E-mail messages were exchanged indicating that a price of $506,000 had been agreed upon and later, the 1 per cent option fee was paid and banked in.

About a week later, the seller tried to back out.

His lawyer, Mr Leslie Netto, argued that the seller was obliged to go ahead with the deal only after the seller had signed and issued the option to purchase. But the Appeals Court held that this was a ‘mere formality’ as all the conditions needed for a binding written contract had already been fulfilled in this case.

The buyer’s deposit had been banked in and the exchange of e-mail messages between both parties identified them and the property clearly. They showed that the parties had agreed on the price and the terms to close the deal.

Legally, all three Ps – parties, property and price – and the T – terms of the option to purchase – had been met and the Appeals Court said this was enough to satisfy the criteria for a binding written contract.

In law, such property deals have to be made in writing.

The judgment released last week also showed the court was prepared to recognise e-mail messages to transact a property deal.

‘The requirement of a signature had also been satisfied on the facts of the present case,’ said Justice Andrew Phang, who wrote the apex court’s 23-page grounds of judgment.

Another reason cited for enforcing the contract, or recognising the deal, in this case was the exchange of money that had taken place.

The judgment is a timely one, said lawyers and property dealers, as it makes clear that one party cannot pull out at the last minute should a better offer arise. Signing the option letter is not the point of no return in such deals.

Said Drew & Napier’s Mr Adrian Tan: ‘This is a problem that has surfaced in the last few years ever since the property boom started.’

Money has changed hands and then the parties try to get out of the deal by not signing the option forms when they see prices rise. This will not work any more, he said.

‘The Court of Appeal has conclusively established the law in this area. All home owners and property agents should take note.’

Mr Chris Koh, director of Dennis Wee Properties, said banking in the option fee of $5,060 in this case amounted to acceptance of the deal.

His advice: ‘If you are not sure of wanting to sell, then don’t accept the cheque. You cannot accept the cheque and then say you don’t want to sell.’

————————————————
About the case

WHEN a couple who had been renting a unit in Rio Vista condominium in Upper Serangoon learnt that a fourth-floor unit was being sold in 2007, they offered to pay $506,000 for it.

Mr Chiranjeev Singh and his wife then gave property agent Helene Ong a cheque for 1 per cent of the purchase price, which she banked into seller Joseph Mathew’s bank account here, as instructed.

Mr Mathew was then working in India.

Four key e-mail exchanges ensued – three from Ms Ong to Mr Mathew, and one from him indicating acceptance of the deal.

But about a week later, he e-mailed Ms Ong, rejecting the offer and declining to sign the option-to-purchase form she had sent him.

Mr Mathew returned here on May 26, 2007, and went into talks with Mr Singh about the deal.

The talks failed and lawyer Boo Moh Cheh took the case to court for Mr Singh.

High Court Judge Andrew Ang ordered Mr Mathew to sign the option-to-purchase form, failing which the Supreme Court Registrar would exercise its power to sign it on his behalf.

Mr Mathew appealed to the Court of Appeal, which dismissed his suit and ordered him to pay costs.

His unit, which eventually went at the $506,000 price first agreed upon, was understood to be worth $670,000 some 15 months later.

Source: Straits Times, 10 Nov 2009