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The Court of Appeal has ruled in favour of a couple who had argued that a bank should compensate them for losses they suffered in a forced property sale. They had said its actions prevented them from obtaining funds to stave off the sale.

The High Court, in earlier dismissing the couple’s case, applied a legal principle that if someone suffered losses due to his own lack of funds, the wrongdoer, in this case the bank, cannot be held responsible.

But on appeal by the couple, Chief Justice Chan Sek Keong, delivering the decision of the three-judge appellate court yesterday, said that this legal principle, which has been abandoned in courts elsewhere, ‘has no place in modern jurisprudence’ and should no longer be used here.

The saga began in 2001, when the couple - businessman Ho Soo Fong and his wife Lim Siew Kim - and Mr Ho’s brother, went to Standard Chartered Bank to refinance two bungalows and a shophouse.

Stanchart granted them loan facilities and lodged caveats against the properties to prevent their sale. However, the trio later cancelled the facilities and asked for the caveats to be withdrawn but the bank refused, as cancellation fees were outstanding.

By then, a fourth property, a shophouse, had been force-sold by another bank, the Bank of East Asia.

The trio went to the High Court, which found that Stanchart was wrong in refusing to withdraw the caveats and ruled that the trio were entitled to damages.

But one of the claims - for losses suffered from the forced sale - was rejected by the assistant registrar who assessed the damages. The couple then appealed to the High Court, which dismissed their case.

With their now-successful appeal to Singapore’s highest court, the couple are seeking more than $1.3 million for the forced sale, said their lawyer Christopher Chong of Legal Solutions.

Source : Straits Times - 31 Jan 2007