Apex court clears air on property deal: My
reservations (Ver 2.0)
Ver 1.0 accessible here: http://groups.google.com/group/soc.culture.singapore/msg/edb25174560759f7?hl=en
Comments?
http://business.asiaone.com/Business/My%2BMoney/Property/Story/A1Story20091111-179261.html
Something not right here that disturbed me enough (see news reports
above) to make me try reading the honorable judge's judgment.
Please advise if I've assumed/ devised anything to the contrary as
I'm not legally trained, what is written here is mostly from the
media report a/m.
The result of which is that I have found suspect the eventual
outcome. The honorable judges (para 1
have IMHO, in their over emphasis upon the validity of an
'option' omitted answering the second, equally important
issue.
Joseph Mathew and Another v Singh Chiranjeev and Another [2009]
SGCA 51
Suit No: CA 200/2008, Decision Date: 29 Oct 2009,
Court: Court of Appeal
Coram: Andrew Phang Boon Leong JA, Chan Sek Keong CJ, V K Rajah
JA
Andrew Phang Boon Leong JA (delivering grounds of decision of
the court)
http://www.singaporelawwatch.sg/remweb/legal/ln2/rss/judgment/64650.html?utm_source=rss%20subscription&utm_medium=rss
.
My understanding is that there should be 2 distinct issues at hand
in this case:
- The first being whether the respective email/ phone
correspondences constituted a valid 'option to purchase',
(“option”).
- The second one being the consequence one should suffer as a
defaulting party of an 'option to purchase', which in this case was
by of the seller, Mr Joseph Mathew who refused to honor the option.
I believe the courts have omitted/ erred on this issue.
Granted Mr Joseph Mathew has probably behaved in a despicable
manner by later refusing to sign the option form despite his
13May2007 email (reproduced below, para 7 of 'Joseph Mathew and
Another v Singh Chiranjeev and Another [2009] SGCA 51'), clearly
instructing Helene Ong (property agent) to sell his property via
acceptance of the buyer's check of $5060.
However, I believe that the courts (or Mr Matthew's lawyers) have
made the glaring omission of either mis judging/ mis-advising Mr
Matthew about his rights.
My opinion about the high/ appeal court/ advising lawyers is that
the final decision was lacking/ illegal. The court/ lawyers, having
laboriously decided that the 'option' contract was valid, did not
seem to appropriately direct the case towards an amicable
resolution. Viz allowing both parties to act upon a valid option;
instead, compelling Mr Matthew to accept $506K for his property at
a then $164K loss.
My contention is thus that having having decided upon the validity
of the $5060 contract, the courts/ lawyers should have have
appropriately (fairly) advised that in the absence of further
contractual documentation, a defaulting party to the 'option' would
be penalized up to $5060. i.e. the actual worth of the 'option'. It
was the failure to offer such pertinent advise/ misjudgment that
resulted in an unfair compromise Mr Matthew's interest and rights
that caused him a $164K loss as a result.
(IMHO, any default of an 'option' by either party should only
result in nett forfeiture of such said 'option fee' (or an
approximate amount) by the defaulting party to the other. (i.e. the
value to which the 'option contract' is worth in the absence of any
other extenuating circumstances/ details.)).
I refer to:
http://www.propertyhub.com.sg/Singapore-Property-Information/Buy-and-Selling-Procedures/Steps-by-Steps-guide-to-Property-Buying.html
“4.(ii) Entering Sale and Purchase Agreement: The purchaser will
need to put up another 9% of the agreed sale price known as Option
Exercise Fee to accept the Option to Purchase (OTP) which will then
form a valid sale contract, known as Sale and Purchase Agreement
(SnPA). The two payments (Option fee and Option exercise fee) then
form the down payment, which is 10% of the agreed sale price. The
balance of the payment must be settled on or before legal
completion date.”
The infancy of the Matthew- Singh contract is seen in the fact that
as the 'option exercise fee' had not yet been paid/ accepted in
this case, there wouldn't even be a valid 'SnPA'. So to be fair,
this fact should also be taken into consideration.
The other fact I state would be in 2 distinct examples(simple
terms):
1) house gets washed away by flood,
2) someone offers seller a better deal/ a mortgagee bank may object
half way into the sale.
Each scenario will cause the respective party to withdraw from the
deal due to physical/ legal impediment stymieing the sale (It can
happen both ways). In the absence of elaborate contractual
documentation except that an 'option fee' has been paid/ received
(as in this case I assume), how should a fair judge decide this and
the many other cases that are wont to come in terms of property
restitution/ dispute resolution?
I repeat: “What's sauce for the goose is sauce for the
gander.”
It is thus beyond comprehensibility how the eventual sale at $506K
could have occurred after June 2008 given that the property was
“worth some $670K” at that time. Was Mr Matthew forced to sell has
property by the courts, if so, why so?
In conclusion, I have no objections to (Singh Chiranjeev v Joseph
Mathew [2008] SGHC 222) that “if the appellants should refuse or
neglect to sign the Option, the Registrar of the Supreme Court
shall have the power to sign and grant the Option to the
respondents on behalf of the appellants (Matthew) ”
However, anyone forcing Mr Matthew to honor the 'option', without
giving him the option to default (with contractually predetermined/
equitable penalties) would in my opinion, be certainly acting
expediently but unjustly and certainly beyond one's
authority.
Default of an option CANNOT costs more then the option's mutual
worth.
It remains a shame that a 1% deposit can hold an entire property
hostage under all conditions- a tyranny and a travesty of simple
Justice. This judgment, if not repealed, will set precedence for a
$1 option fee to hold a million dollar property hostage and at the
mercy of legal intricacies; remaining a threat to the integrity of
property investment in Singapore for years to come.
----
PS:
- 'Option fee', in my opinion is a misnomer as it only becomes a
fee for the defaulting party should the contract not be finally
fulfilled.
- “ upon the respondents exercising the Option to Purchase the
property, the appellants are to pay the said sum of $15,510.05 to
the respondents”
I cannot understand why $15,510.05 is only paid when Mr Singh
exercises option to purchase, if it's compensation for the nuisance
Mr Singh (buyer) suffered (legal costs) as a result of Mr Matthew's
(seller) mischief of refusing to physically sign the 'option' form
as previously agreed to via email.
==========
13May2007 email by Joseph Mathew, reproduced from http://www.singaporelawwatch.sg/remweb/legal/ln2/rss/judgment/64650.html?utm_source=rss%20subscription&utm_medium=rss
7 The third key e-mail is
the first appellant’s e-mail on 13 May 2007 to Helene in
response to her earlier e-mails (“the Third E-mail”), and it reads
as follows:[note: 3]
Dear Helene,
Understand that at this growing market, the property price is going
up including rental market. However I am taking a decision to
proceed to sell the property at this price of S$506K which is
reasonably OK as my minimum expectation was S$510K which we
couldn’t achieve.
After deducting agent fee and lawyer fee at least I should get
minimum of S$500K. I had taken loan of S$250K and also paying heavy
interest for the last one year (not much gain), also very less
rental of S$1500 which is also not attractive. As discussed through
phone I can only agree for an agent fee of S$4000 + tax which is
reasonable. Also I can give more business for you through various
contacts. Pleas [sic] raise the invoice accordingly.
· You can also deposit the cheque to my
account POSB-026-XXXXX-X
· Pls send me the draft letter for
Mr. Igwe so that I can sign the letter with effect from
14 May 07.
· My address as follows
Joseph Mathew
Keppel FELS Offshore,
Unit No. 3, 8th floor, Prism Tower A,
Mindspace, Malad West,
Mumbai – 400062
India.
· Also appreciate your follow up to find a
suitable flat which can demand higher rental value (ex. Summerdale
etc) or Any new EC coming up /any good deal.
Thanks for your understanding and support.
Best Regards
Joseph Mathew
[emphasis added; underlining in original] Back to top 
