Ong Keh Choo v Paul Huntington Bernardo and another

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 03 September 2019
• Neutral Citation: [2019] SGHC 204
• Court: High Court (Singapore)
• Hearing Date: 11 July 2019,09 July 2019,16 August 2019,12 July 2019
• Docket Number: Suit No 258 of 2018
• Plaintiff Counsel: Edwin Lee Peng Khoon and Ng Wei Ying (Eldan Law LLP)
• Defendant Counsel: N Sreenivasan SC, Claire Tan Kai Ning and Partheban s/o Pandiyan (K&L Gates Straits Law Practice)
• Subject Matter: Contract,Formation,Acceptance
• Published date: 21 July 2020

Choo Han Teck J:

The plaintiff, Ong Keh Choo (“Ong”), is a property agent with 35 years’ experience and was also the owner of an apartment at 8 Balmoral Road (“the Property”). The defendants are a married couple, Paul Huntington Bernardo (“Bernardo”) and Tran Hong Hanh (“Tran”). Bernardo, an American, is a research scientist and Tran, a Vietnamese, is a medical concierge. They are Singapore permanent residents. Ong advertised the Property for sale and showed the flat to the defendants on 7 October 2017. The defendants handed her a cheque for $316,000 which Ong claims was in exchange for an option to purchase (“the Option”), but the defendants later cancelled the cheque. Ong now sues on this cheque. The defendants allege that Ong misled them into giving that cheque.

Mr Edwin Lee, counsel for Ong, submits that this is a simple case of buyer’s remorse. He submits that the defendants knowingly entered into the Option and are now trying to avoid the contract. He says that on her part, Ong had honoured the terms of the Option. According to Ong, the defendants were so eager to purchase the Property that they initially issued a cheque for $3,160,000, the full purchase price, and she advised them to reduce it to 10%. It is not disputed that Ong has since sold the Property to a third-party buyer for a higher price, $3,820,000, but Mr Lee submits that this is irrelevant to the present claim.

On the other hand, the defendants claim that Ong told them to issue a cheque to demonstrate their interest, but assured them that it was “for show” only and she would not hand it to the owner. She did not disclose the fact that she was the owner. Later that same day, Ong met Tran alone and told her to sign a document to acknowledge the cancellation of some words. At that time Tran did not know that that document was the Option.

Tran showed that document to a lawyer on the same day and she was told that it was an option to purchase with highly unusual terms. First, the option fee was 10% of the purchase price – the value of the “for show” cheque – when the usual market practice for an option fee was 1%. Second, the defendants had to pay the remaining 90% of the purchase price upon exercise of the Option, and not at completion. That was unheard of. Third, the full sum was to be paid immediately to the owner rather than held by stakeholders.

Alarmed, Tran asked Ong to destroy the cheque but Ong tried to assure her that nothing was unusual. It was only when Bernardo filed a complaint with the Council of Estate Agents (“CEA”) on 8 October 2017, the very next day, that the defendants realised that Ong was the owner of the Property. The defendants countermanded the cheque before Ong could encash it.

Mr N Sreenivasan, SC, counsel for the defendants, submitted that no agreement had been reached because there was no offer or acceptance. Alternatively, he submitted that any agreement had been procured by fraudulent misrepresentation, or had been validly rescinded, or the Option was unenforceable as illegal or against public policy, or would lead to Ong being unjustly enriched, or that Ong suffered no loss. He also submitted that Bernardo is entitled to rely on ss 29 and 30 of the Bills of Exchange Act (Cap 23, 2004 Rev Ed).

I found Tran to be a credible and forthright witness. I had no difficulty accepting her version of events, namely that Ong had assured her and Bernardo that the cheque was “for show” and procured her signature on the Option without informing her of its nature. Tran appeared to be a simple and guileless individual. I also...