Developer can't retain 'unreasonable' $1.2m deposit for $1.9m unit, apex court rules

When a father-and-daughter pair from China decided not to go through with the purchase of a $1.9 million condominium unit after paying almost $1.2 million for it, the property developer initially had the entire sum forfeited and refused to return the deposit to them.

- Selina Lum

Nearly five years after the aborted transaction, it was only under the threat of legal action that the developer of The Crest in Prince Charles Crescent, off Alexandra Road, reduced the forfeited sum to $380,000.

Wingcrown Investment, a unit of listed developer Wing Tai Holdings, kept another $326,397.38 to offset the expenses incurred as a result of the aborted deal and returned the balance of $488,957.04 to the pair.

Still, Ms Li Jialin and her father Li Suinan took the developer to court in a bid to get a full refund, arguing that the sum of $1.2 million was not a true deposit.

In 2023, a High Court judge ruled that the developer was entitled to a forfeited sum of $380,000, which was 20 per cent of the purchase price.

The pair, who are represented by Mr Lee Ee Yang from Covenant Chambers, then appealed.

On Nov 6, the Court of Appeal ruled that the developer did not have the contractual right to the forfeited sum of nearly $1.2 million, as it was not a "true deposit".

In written grounds of decision, Singapore's highest court said that it was satisfied that the sum of $1.2 million, which amounted to 63 per cent of the purchase price, was not reasonable as a deposit.