Four months after the bank took possession of their apartment for defaulting on mortgage payments, prominent businesswoman Jannie Chan and her younger daughter granted a pair of potential buyers an option to purchase the property.
The Keppel Bay View property was eventually sold by DBS for $3.85 million.
The sale netted balance proceeds of more than $420,900 would ordinarily have been paid out to Chan, 74, the co-founder of luxury watch retailer The Hour Glass, and Sabrina Tay.
But complications arose when the potential buyers successfully sued Chan and Tay over the aborted deal, and Chan was made bankrupt by other creditors, leading to competing claims over the proceeds.
On Tuesday (Oct 15), the High Court ruled that Chan’s half-share of the proceeds would be paid to the Official Assignee (OA), which administers the affairs of bankrupts and distribute assets to creditors.
Tay’s share has been released to the potential buyers, named in court documents as Davis Colin Niel and Kim Ji Soo.
In his judgment, Justice Choo Han Teck said the potential buyers only have a legal right over the proceeds to the extent of their $187,750 deposit.
As Tay’s half-share of $210,471.52 has been paid to them, the buyers have no security over the remainder of the disputed sum, said the judge.
Justice Choo said if the buyers want to pursue the rest of their $212,163.66 claim against Chan, they must file proofs of debt with the OA.
The buyers were granted an option to purchase the apartment for $3.755 million on Sept 17 last year. They exercised the option on Sept 28 that year.
The deal was not completed, after a bankruptcy application was filed against Chan on Nov 2.
The buyers sued Chan and Tay for the return of the deposit and damages for breach of the option and won a judgment sum of $212,163.66.
The apartment was sold by DBS on May 13 this year.
Two weeks after the mortgagee sale, Chan was declared bankrupt, which meant her assets were vested in the OA as her trustee.
DBS filed an application asking the High Court to determine the competing claims to the balance proceeds of $420,943.04.
It was agreed that Tay was entitled to half the sum, but Chan’s share remained in dispute.
The Comptroller of Income Tax initially laid claim to part of the disputed sum, as Chan owes $141,946.88 in income tax.
But the taxman later said it would defer to the OA’s determination and filed two proofs of debt with the OA.
The buyers argued that their claim should be paid in priority to all other creditors.
They also argued that in addition to the judgment sum, they should get another $95,000 as the appreciation in the price of the property.
But the judge said the buyers, having obtained damages for the breach of the option, can no longer be regarded as the owners of the property and are therefore not entitled to the appreciation in value.
Chan recently completed a two-week jail term for contempt of court, while her older daughter Audrey, 45, is serving a 22-month term for drug offences. – ST