Condo buyer failed to have Option declared valid .
Cheque bounced because of GIRO deduction!
(Straits Times 14 August 1996)
A Bank Officer has lost his case to get the owner of a $1.158m condominium
unit to sell him the property in Ewe Boon Road, off Bukit Timah Road.
Mr Seah Kiat Seng also lost his $15,800 option fee when Amtel Exports, the owner, forfeited the
sum. He had issued a POSBank cheque for $142,200 on Feb 5, the last day of the option. The cheque was dishonoured.
Mr Seah then had $153,222 in his account. He said the bounced because of
a Giro deduction for his income tax. Further, his wife's cheque for $8,000 did not clear as it was supposed to.
Amtel then treated the option as having expired without being exercised and forfeited the option
fee. Mr Seah, however, insisted he had excercised the option and that there was a binding and enforceable contract for
the sale and purchase of the property. He took the case to High Court, which dismissed his application with costs. He is appealing.
In his grounds of judgment last Thursday, Justice M.P.H. Rubin found Mr Seah's arguement that
a cheque, once given, was to be treated as cash was not according to the principles laid down in law.
Mr Seah's assertion, he said, that the dishonouring of the cheque was beyond his control contracdicted
his earlier stand that his bank did not follow his instructions to transfer funds from his savings to his current account.
The judge said Mr Seah had not convinced the court that the dishonouring was beyond his control.
But once it had happended, Mr Seah could not, in law, be said to have accepted the offer according to the terms of the offer,
Justin Rubin said there could not be any binding contract between the parties when the option
holder had faialed to comply with an agreed essential term of the option within the set time.
He said: " The irrevocable offer made by the vendor lapsed by the failure of the option holder
to underpin the cheque issued with the required funds."
In his judgment, he said, time was of the essence in making the payment and
in this case, "the time allowed could not be extended be reference to any equitable principle".