ST : IndoChine owner wins court battle

Nov 11, 2010

IndoChine owner wins court battle

INDOCHINE pub and restaurant chain owner Michael Ma has won a court battle to get back, with interest, the $386,000 he put down nearly 3-1/2 years ago on a property deal that had to be aborted.

The Court of Appeal yesterday ruled in his favour, overturning an earlier decision by a High Court judge who had dismissed his case for a refund.

In June 2007, Mr Ma had viewed five shophouses in Tanjong Katong Road and agreed to buy them for $7.72 million.

He first paid the 1 per cent option fee of $77,200; then, after the option was exercised, another $308,800, or 4 per cent of the purchase price.

Later, Mr Ma, an Australian who is a permanent resident in Singapore, found out that as a foreigner, he was not eligible to buy the shophouses as they were partially restricted for residential use.

Since the deal could not be completed, the seller, Goodman Development, said he had to forfeit his deposit.

Mr Ma, represented by lawyer Kenneth Pereira, sued Goodman, claiming it had misrepresented the status of the shophouses, saying they were for commercial use.

He claimed that he had asked Goodman's property agent whether the shophouses were zoned 'commercial' and she confirmed they were.

But Goodman, represented by Ms Felicia Ng, denied misleading Mr Ma. The property agent said she told him the upstairs unit was residential and downstairs commercial.

And in May, the High Court said that given Mr Ma's business acumen and experience, he would not have paid without verifying the zoning. The judge found that Mr Ma knew what the zoning was when the balance of the deposit was paid.

And although the contract was void because Mr Ma was not eligible to buy the property, he failed to show a strong case for a refund, said the High Court.

But yesterday, a three-judge appeals court disagreed.

During the hearing, Justice V.K. Rajah said both parties were under a 'mistaken common assumption' at the time that Mr Ma was entitled to buy the property.

Both acted in good faith and did not think they were doing anything improper, so the contract was void but not illegal.

SELINA LUM