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Case Studies

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In 1992, Mr Koh Lian Chye, an administrative manager, and his wife, Madam Peck Seok Hoon, a teacher, agreed to sell their five-room flat to Taiwanese businessman for $221,000.
But the Taiwanese application for permanent residency had not been approved and they all agreed to let the buyer's brother Mr Yang Tseng Pu who is a PR here to be registered as the buyer.
However, in March 1993, an HDB inspection found that unauthorised renovations had been done to the flat by the Koh's contractor. The Kohs could not rectify the matter as the contractor had gone out of business, so by the end of March 1993, the HDB cancelled the resale application.
Around that time, the sellers wanted to sell the flat to a relative for $245,000. But in April, they agreed to a new sale price of $235,000. They also agreed on a penalty of 10 per cent of the purchase price if either party defaulted on the agreement.
Later, the buyer's brother, Mr Yang lodged a caveat against the flat. At the same time Mr Yang's PR application was approved. But the HDB said the sale of the flat to him could not go through until the caveat was removed.
This led to another wrangle as the Yangs would not remove the caveat, fearing the Kohs would sell the flat to someone else. This came to a standstill. Taiwanese businessman commenced legal action. The sellers counter sued, claiming that Mr Yang had caused the failure of the sale by refusing to remove a caveat.
The court agreed and ordered the buyer to pay costs and $18,500 ($23,500 damages less $5,000 deposit already paid) in damages.
The judge ordered Mr Yang to withdraw his caveat. Now the Kohs can sell the flat which is currently (16/6/96) valued at about $500,000.

Compensation payable for wrongfully lodging caveats, etc.
128. —(1) Any person who wrongfully, vexatiously or without reasonable cause —

(a) lodges a caveat with the Registrar;

(b) procures the lapsing of such a caveat; or

(c) being the caveator, refuses or fails to withdraw such a caveat after being requested to do so,

shall be liable to pay compensation to any person who sustains pecuniary loss that is attributable to an act, a refusal or a failure referred to in paragraph (a), (b) or (c).

(2) The compensation referred to in subsection (1) shall be recoverable in proceedings taken in a court by the person who claims to have sustained the pecuniary loss.

(3) A person who is a caveator shall not be entitled to bring proceedings under subsection (1) (b) if that person, having had an opportunity to do so, has failed to take all reasonable steps to prevent the caveat from lapsing.

(4) For the purposes of this section, a caveator shall be deemed to allow a caveat to remain without reasonable cause if he fails to withdraw it within 7 days of the day on which his right to the interest claimed terminates.

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