UOB prevailed on appeal against LMC in their dispute over “furniture discounts” offered to home purchasers.
In a ruling dated October 28, the appeal division of the Singapore High Court ruled in favor of UOB in its tort of illegal means conspiracy against LMC but against UOB in their tort of deception.
UOB is entitled to compensation from LMC, the amount of which will be established when damages have been assessed. The appeal costs and disbursements were granted to UOB in the amount of S$59,000.
As a refresher, in November 2014, UOB filed a lawsuit against LMC, a subsidiary of Indonesia’s Lippo Group, alleging that LMC had conspired with two property agents to offer “excessive” furniture rebates provided to buyers, thereby inflating the stated sale prices of units at the Marina Collection, a luxury condo in Sentosa Cove.
The financial institution alleges it was duped into making mortgage loans based on inflated home values.
A furniture refund of S$1.4 million was included in the sale of a unit with a reported purchase price of S$6.1 million. As a result, the true cost of the acquisition was calculated to be a cool S$4.8 million.
The buyer of a S$4.9 million house was granted a loan by the bank for 80% of the purchase price. However, the sum borrowed was more than the value of the property. In certain situations, reimbursements were as high as 34.5% of original prices paid.
The appeal court’s justices expressed concern that LMC did not “completely comprehend the seriousness of its behavior.”
LMC paid sales commissions based on the true purchase price, not the claimed purchase price, and the size of the rebates strongly implies they were not real.
The buyers were equipped with a “instrument to fool UOB” since LMC had given papers with the inflated purchase pricing.
As an added bonus, LMC’s inflated stated purchase prices would have served as the basis for appraisals of other apartments inside the building.
According to the court that handed down the ruling, Justice Woo Bih Li, “not only did it mislead UOB, but other appraisers and buyers would also depend on the purchase price in the option to purchase to evaluate other units in Marina Collection which are acquired or in similar developments.”
The purchase price gave a skewed impression of one sector of the real estate market.