SINGAPORE – Forty home owners of 43-unit freehold Ampas Apartment, which was sold last year in a $95 million collective sale, have sued the buyer for wanting to pull out of the deal.
Buyer Oxley Jasper, a subsidiary of public-listed Oxley Holdings, said it was entitled to call off the deal after its proposal for a new residential development was rejected by planning authorities.
Under the sale and purchase agreement, the deal was subject to outline planning permission for a new development comprising at least 120 units each averaging 700 sq ft.
But the Urban Redevelopment Authority (URA) said the maximum allowable number of dwelling units for the site is 112.
It added that the formula for computing the permissible number of units can be found in guidelines issued in 2012.
But the 40 home owners, in a High Court suit filed earlier this month, argued that the buyer was not entitled to rescind the agreement.
The suit, filed in the name of five owners representing 35 others, says the alleged rescission should be declared null and void.
The home owners, represented by Mr Lee Ee Yang of Covenant Chambers, contend that there was a mistake by both parties in the drafting of the condition, but it could be rectified.
They say parties would not have concluded the agreement knowing that there was a condition which could not be met based on existing laws, regulations and guidelines.
The plaintiffs contend that the contract should be amended to state 112 units instead of 120.
Oxley has applied to strike out the lawsuit, arguing that the 40 plaintiffs do not have the legal standing to sue.
All 43 owners need to be on board, contends the buyer, represented by Rajah & Tann’s Paul Tan.
It also argues that the plaintiffs’ claim that the number 120 can be rectified to 112, was without basis.
According to court papers filed by the plaintiffs, the terms and conditions of the sale were discussed during a seven-hour meeting in March last year.
The plaintiffs contended that at the meeting, the collective sale committee members were assured by the marketing agent for the sale that the condition on planning permission could be met.
Under the agreement, if the buyer fails to receive planning permission, it was entitled to rescind and cancel the contract.
The buyer also has the right to waive this condition and proceed with the deal, but the owners do not have a corresponding right.
The deal was inked on March 27 and the buyer paid a first deposit of $4.75 million, or 5 per cent of purchase price.
Under the contract, the buyer was to pay a further deposit of $4.75 million within seven business days after receipt of written notice that the order for sale for the property had been obtained.
The deadline was extended to Dec 1 after Oxley’s request.
On Sept 17, URA rejected Oxley’s proposal.
On Oct 26, Oxley’s lawyers wrote to the committee’s lawyers, saying it was entitled to rescind and cancel the agreement on the basis that the condition has not been met. It demanded the return of the first deposit.
More legal correspondence followed, with the committee rejecting the purported rescission.
The committee also demanded payment of the further deposit by the deadline.
Oxley rejected the demand and maintained that the contract had been validly rescinded and cancelled. It repeated its demand for the first deposit to be refunded.
The plaintiffs allege that Oxley’s failure to pay the further deposit by Dec 1 was a breach of contract and thus, they were entitled to forfeit the first deposit.
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