Re: UOB Sue Lippo Marina For Misrepresenting Condo Sales Price! Subprime Crisis Loomi
UOB gets nod to sue over inflated home loans for Sentosa Cove condo
Marina Collection, a luxury condominium at Sentosa Cove. PHOTO: JLL
High Court allows bank to sue Lippo Group subsidiary, 7 others for 'misrepresentation'
K.C. Vijayan
Senior Law Correspondent
The High Court has
cleared the way for United Overseas Bank to sue two real estate agents for alleged deceit and conspiracy over inflated loans for 38 units at a luxury condominium in Sentosa Cove.
Apart from the two agents, the bank is also suing five other individuals and developer Lippo Marina Collection (LMC) for conspiracy, with damages to be assessed.
UOB is alleging that excessive furniture rebates provided to buyers had deflated the stated sale prices of the Marina Collection condo units, which the housing loans were based on.
The sale price adjustments of the 99-year lease units breached housing loan cap rules set by the Monetary Authority of Singapore, UOB alleged.
The bank also claimed it had been misled by Lippo Group subsidiary LMC and the other defendants, as it was not informed about the substantial rebates that exceeded the market norm.
For instance, a unit with a stated sale price of $5.98 million was given a furniture rebate of $1.78 million, while the bank loan granted to the buyer was $4.79 million - more than the actual sale price of $4.2 million.
UOB also claimed that many of the buyers did not have genuine means to service the housing loans, but were merely fronts procured by the defendants to enter into purchase agreements with Lippo Marina. Of the 38 loans, 37 have defaulted.
LMC, represented by lawyer Siraj Omar, is vigorously denying the claims made against it.
Among other things, it said the loans were a matter solely between the buyers and UOB, and that it had no knowledge of any alleged misrepresentation of the purchase price.
The other defendants, variously represented by lawyers A. S. Shanker, Eugene Thuraisingham and Mirza Namazie, have also filed defence documents denying the claims. Pre-trial exchanges are ongoing.
In judgment grounds released last week over a preliminary point of the case, Judicial Commissioner Aedit Abdullah ruled that UOB was not precluded from suing for fraud or deceit against the two real estate agents.
The two defendants had jointly denied there was conspiracy or deceit in their defence to the main suit, and had countered that UOB's vice-president of housing loans at the time had been aware of all matters in relation to the buyers' housing loan applications.
They claimed she had also suggested cash transfers between relevant accounts.
Their lawyer A. S. Shanker argued that as she was from UOB, whatever she did was attributable to the bank and, thus, it cannot be said that the bank was defrauded by the two defendants.
Her knowledge would have stopped the bank from bringing the various claims against them.
At issue before the court was whether this knowledge, or action, by the vice-president can be attributed to the bank and, therefore, preclude it from claiming the two misled the bank and committed deceit.
UOB had applied to settle this issue, but an assistant registrar had dismissed its case.
The High Court has since allowed the bank's appeal as argued by its lawyer Eddee Ng.
The judicial commissioner stressed that his finding does not mean the two defendants had committed fraud or were involved in a conspiracy.
He clarified that the defendants are free to defend against the bank's claims in the main trial in due course and the issue he ruled on will be relevant in relation to specific defences they had raised in denying the claims.
The judge also allowed the bank's appeal to strike out several portions in the duo's statement of defence, as they "disclosed no reasonable defence".
A High Court pre-trial conference in relation to the main case involving all eight defendants and UOB was held last week.
