SINGAPORE - A father-and-daughter pair from China who paid almost $1.2 million for a condominium unit, but did not go through with the deal after finding out that their property agent had embezzled other funds, will have to lose their $380,000 deposit.
The purchasers, Ms Li Jialin and her father Li Suinan, who live in Shenzhen, had taken the property developer to court in a bid to get a full refund of the money they paid in two aborted attempts to buy a unit at The Crest, off Alexandra Road.
Both transactions were terminated because they defaulted on payment obligations.
Wingcrown Investment, a unit of listed developer Wing Tai Holdings, said it was contractually entitled to keep the $380,000, adding that it had returned nearly $490,000 to the pair.
A High Court judge ruled that the sum of $380,000, which represented 20 per cent of the purchase price, was validly forfeited as a deposit.
Justice Kwek Mean Luck ordered that the remaining sum of about $326,000 is to be kept by Wingcrown for now, pending a further court decision on the amount of damages it can claim as fees and expenses incurred from the aborted transactions.
In her affidavit, Ms Li blamed their then property agent Liu Siyu for failing to make the requisite payments on their behalf.
Ms Li said that between December 2015 and July 2018, she transferred about $2 million to Liu to pay for the property. She said the agent paid only $1.2 million towards the purchase price of the property, and $315,900 in stamp duty.
On Oct 3, 2018, Ms Li travelled to Singapore to make a police report against Liu. Later that month, she told her lawyers that she could not complete the transaction in the light of ongoing police investigations.
The Straits Times had previously reported that Liu was sentenced to three years’ jail for misappropriating nearly $600,000, which she used to buy Louis Vuitton, Christian Louboutin and Hermes luxury goods.
Liu, who has made full restitution and was sentenced to three years’ jail, is not named as a party in the current civil case.
Justice Kwek’s written grounds, issued on Tuesday, centred on contract issues and made no mention of the misappropriation.
The father and daughter had entered into a sale and purchase agreement with Wingcrown to purchase the property for $1.785 million on Dec 28, 2015.
Under the agreement, the developer was entitled to forfeit 20 per cent of the purchase price, or $357,000, should the deal fall through.
In March 2018, the deal was annulled by Wingcrown after the pair failed to make the requisite progress payments.
By then, more than $1.2 million had been paid. The developer forfeited the $357,000 deposit and other sums, and said it would return the balance sum of $838,354.42 to the purchasers.
Despite the termination, father and daughter remained interested in buying the property.
Following negotiations, Wingcrown granted the pair a fresh option to purchase (OTP) to buy the property for $1.9 million.
Under the OTP, the pair was obliged to pay the balance purchase price by June 26, 2018. A condition of the OTP stated that the vendor may forfeit “any deposit” if the purchaser does not complete the transaction.
Despite several extensions of time and repeated reminders, the pair failed to complete the transaction.
Wingcrown notified the pair in a letter on Nov 20, 2018, that the OTP had been terminated.
The developer retained the sum of $1,195,354.42, comprising the $357,000 originally paid as a deposit under the first transaction, and the $838,354.42 that it would otherwise have returned to the pair.
Wingcrown eventually sold the property to other purchasers in April 2021.
On March 21, 2023, the pair sent a letter of demand to Wingcrown for the return of the entire sum.
On April 19, 2023, the developer returned the pair $488,957.04 out of the $1,195,354.42.
It said it was entitled to $380,000 as the 20 per cent deposit on $1.9 million, and $326,397.38 to off-set the fees and expenses incurred as a result of the aborted deals.
On April 26, 2023, the pair, represented by lawyers from Covenant Chambers, filed a High Court application, asking for a full refund of the $1,195,354.42, along with interest.
In written grounds of decision issued on Tuesday, Justice Kwek said it was undisputed that the OTP was validly terminated, and thus, the developer had the contractual power to keep any deposit paid by the purchasers.
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This article was first published in The Straits Times. Permission required for reproduction.
