May 16, 2007

COLLECTIVE SALE OF SOMERSET PROPERTY

[SIZE="5"][B]Firm loses suit against owners who call off $30m deal[/B][/SIZE]

[B]Delays ended in deal being cancelled. Owners to keep $3m deposit, have got $42m offer from another buyer[/B]

By Selina Lum



[SIZE="1"]VICTORY: The owners of Mayer Mansion on Devonshire Road have won their case against a company that had sued them for cancelling a $30-million collective sale. -- ALPHONSUS CHERN[/SIZE]


THE owners of a 10-unit residential property in the prime Somerset area have scored a victory in the High Court against a company that had sued them for cancelling a $30-million collective sale.

The owners had been keen on the deal, but delays ended in it not going through.

On Monday, Justice Judith Prakash agreed that the owners of Mayer Mansion on Devonshire Road were therefore right to rescind the sale-and-purchase agreement last month.

The 13 owners, represented in court by Mr Hri Kumar and Mr Tham Feei Sy of Drew & Napier, will also get to keep the $3 million deposit paid by Travista Development, a foreign-owned property developer.

And in a property market that is steadily hotting up, the owners have also since received a higher offer of $42 million from another buyer.

It all began on Dec 12 last year, when Travista - incorporated in Singapore just six days before this - agreed to buy Mayer Mansion to redevelop it. It offered the owners $30 million in the collective sale.

But because Travista was foreign-owned - its sole shareholder is based in the British Virgin Islands - it had to obtain government approval to buy the property.

Travista applied to the Singapore Land Authority (SLA) for the approval, known as a qualifying certificate, on Dec 21.

Eight days later, the SLA approved the application, subject to the submission of a banker's or insurance guarantee for $3 million.

The owners' position was that, based on the agreement, the transaction was to be completed on March 12.

When Travista failed to complete the purchase by that date, the owners issued a letter giving it 21 days to do so. By the end of the grace period, the deal had still not gone through.

According to the terms, the agreement was then considered as rescinded.

On April 3, Travista sued the 13 owners and applied for an injunction to restrain them from exercising their rights under the agreement. The application was turned down.

Two days later, the owners notified Travista that they had rescinded the sale-and-purchase agreement.

On submitting its $3 million, Travista finally obtained the qualifying certificate on April 11.

Last Tuesday, when the suit came before Justice Prakash, Travista wanted the court to declare that it was entitled to complete the purchase and that the 21-day notice period was null and void.

But the lawyers for the owners argued that Travista had been obliged to use its 'best endeavours' to obtain the certificate and to do so 'without delay'.

'While the completion is determined by the date of receipt of the qualifying certificate, the plaintiffs are not entitled to drag their feet in procuring it,' they argued.

On Monday, Justice Prakash dismissed Travista's case.

She declared that the agreement was rescinded, that the 21-day notice was valid, and that the deposit paid by Travista had been validly forfeited.

She also ordered that the caveats lodged by Travista - to prevent the sale of the property - be lifted.

Travista was also ordered pay the owners costs of $15,000 plus disbursements.

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