SINGAPORE: A High Court judge dismissed a woman’s negligent misrepresentation suit on Dec 5 after she bought an $18.68 million Good Class Bungalow (GCB) and sued her real estate agency.
Ms Jane Lam alleged that the property agency had falsely represented that the entire land area of 12,454 sq ft could be fully redeveloped. However, her father found a drainage reserve of 278.8 sq ft on the property that could not be used for redevelopment.
Ms Lam’s father, Mr Patrick Lam, founded boutique property developer JBE Holdings. The discovery was made after Ms Lam paid $934,000 for the right to buy the property. In her lawsuit against the agency, Realstar Premier Group, Ms Lam contended the agent should be held responsible for passing on a marketing brochure from the seller that she claimed had painted a false picture of the property’s redevelopment potential. She claimed that she suffered losses amounting to $418,160.76, which was derived by using the purchase price divided by the proportion of the area of the property that could not be used for redevelopment.
Senior Judge Lai Siu Chiu disagreed with Ms Lam’s argument that the brochure implied the entire 12,454 sq ft of the property could be used for redevelopment. The judge considered that the property agent, Mr Darren Teo, had no knowledge of any drainage reserve. It appeared that even Mr Gregory Tan, the seller’s property agent who had prepared the brochure, was unaware of the drainage reserve, said Justice Lai.
The judge added that a reasonable person in Ms Lam’s position would not have believed that depictions of potential layouts implied that the entire land area would be available for redevelopment. Justice Lai said the property agent’s role was limited to a conduit passing the brochure to her. The agent’s standard of care did not require him to independently verify the brochure’s contents.
Ms Lam offered $18.68 million for the property and paid $186,800 for an option to purchase it. The seller accepted the offer on the same day.