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13-04-12, 02:34
http://www.straitstimes.com/Money/Story/STIStory_785402.html

Investors lose court battle to suspend payments for condo units

Published on Apr 5, 2012

By Yasmine Yahya


A GROUP of investors that bought 53 units at upscale condominium Grange Infinite has lost its case to suspend further payments for two of those units.

Justice Lee Seiu Kin of the High Court has ruled that the investors must fulfil the outstanding payments on these units - $1.37 million for one and $1.93 million for the other - by today.

If they fail to pay up by today, the sale and purchase agreements for these two units will be annulled and developer Grange Properties, an associated company of mainboard-listed Chip Eng Seng, will be able to repossess the properties.

The investors - a group of funds managed by ARA Asset Management - took Grange Properties to court last year, claiming that the units were not as luxurious, stylish or elegant as had been promised. The total cost of the 53 units was $388 million. They have since resold 15.

Last month, the investors asked the High Court to order that their remaining payments for the 38 units they still own be 'suspended, deferred and/or postponed until the disposal of the suit'.

Grange Properties has been chasing ARA for payment of $37.6 million - the final instalments for the 38 units - since Jan 13. On Feb 23, Grange issued a 21-day notice with respect to two of the units that ARA had purchased - one on the 20th floor, the other on the 36th.

This notice was a warning to ARA that if it did not make the necessary payment by March 15, Grange would be entitled to exercise its rights to resell these units.

ARA argued in its application that Grange Properties might transfer the money from the resale of the units and so leave it technically unable to pay any damages that might be awarded to ARA by the court.

However, Grange Properties countered that this argument was inconsistent with ARA's own pleaded case that it lost potential buyers and tenants because the units were poorly built, and therefore difficult to sell.

Grange also argued that it was an associated company of a listed firm that is financially sound, and thus there was no evidence that there could be a risk that it might transfer out money in order to deprive ARA of any potential damages.

Now that the High Court has ruled on these units, Grange Properties said it is 'considering its position in relation to the outstanding amounts for the other units purchased' by the investors. The remaining instalments to be paid on these 36 units amount to more than $34.3 million.

Grange has not decided whether it will pursue further legal action against ARA for this.