ST : Law firm to pay more for clients' loss

Oct 21, 2010

Law firm to pay more for clients' loss

Compensation for condo foul-up must be pegged to market price: Judge

By K.C. Vijayan, Law Correspondent



A law firm's one-day delay cost its clients, Mr Ong Hien Yeow and his wife, the chance to buy a $3.5m condo unit at The Seafront On Meyer in Meyer Road. -- ST PHOTO: BRYAN VAN DER BEEK

A COUPLE who sued a law firm for blowing their chance to buy a $3.5 million flat will get compensation pegged to the market price of the property at the time of the court hearing in 2008.

The High Court ruling means the law firm will have to pay Mr Ong Hien Yeow and his wife a sum that would have enabled them to buy a similar unit had their plans to buy the flat not been derailed by the firm, Central Chambers LLC.

Mr Ong had wanted to buy the unit at The Seafront On Meyer in Meyer Road in 2007. Central Chambers was a day late in exercising his option, and failed to meet the April 17, 2007 deadline.

The developers, CRL Realty, refused to sell because of the delay. The couple, who had wanted the flat as their matrimonial home, sued the law firm for the loss caused, after futile efforts to buy an alternative unit.

Previously, the lower court had held that the amount payable should be pegged to the time when the law firm botched the couple's plans, in April 2007.

The ruling capped a case with extra-ordinary circumstances.

Ordinarily, it would be unusual for a significant difference to occur when damages are assessed.

But in this case, there was a huge increase in the value of the unit between the contract date in April 2007, when it was valued at $3.53 million, and the start of the court assessment hearings from April 2008. In May that year, the value of the property had soared to $5.38 million. Central Chambers acknowledged its fault in a November 2007 court hearing, and the issue was how much the couple should be paid in damages.

As this was a negligence claim, insurers for the law firm moved in for the hearing before a High Court Assistant Registrar in 2008 to assess the sum.

Lawyer Imran Khwaja from Tan Rajah & Cheah, acting for the insurers, argued the price should be pegged to within a reasonable time from when the fault occurred in April 2007.

But Senior Counsel Vinodh Coomara-swamy from Shook Lin & Bok, representing the Ongs, countered that the sum to be paid should be the $1.85 million difference between the original $3.53 million asking price for the unit in April 2007 and the new $5.38 million price at which the developer re-released the unit on the market in May 2008. Such a sum would take in the 'current market price of equivalent units in the same development', court documents said.

An assistant registrar in September 2008 awarded the couple about $418,000. This sum was based on the difference in price of the flat within about two months of the law firm's mistake. Both sides appealed against the decision.

Justice Kan Ting Chiu, in a reserved judgment published yesterday, ruled that the quantum be based on the price of the unit during the time when the court hearings took place, between April and September 2008.

He ordered the case to be remitted to the High Court assistant registrar for the damages to be re-assessed as directed.

vijayan@sph.com.sg