UOB has won an appeal against developer Lippo Marina Collection (LMC) in a dispute over “furniture rebates” granted by the latter to property buyers.

The appellate division of the Singapore High Court, in a judgment dated Oct 28, allowed UOB’s claim against LMC in the tort of unlawful means conspiracy, but not on the claim in the tort of deceit.

LMC must pay damages to UOB, the quantum of which will be determined at the assessment of damages. UOB was also awarded costs of the appeal and disbursements to the tune of S$59,000.

To recap, UOB first filed a lawsuit in November 2014 alleging that LMC – a subsidiary of Indonesia’s Lippo Group – had conspired with two property agents to offer “excessive” furniture rebates provided to buyers, inflating the stated sale prices of units at the Marina Collection, a luxury condo in Sentosa Cove.

The bank claims it was misled into granting housing loans based on inflated sale prices.

For instance, a unit with a stated purchase price of S$6.1 million was sold with a furniture rebate of S$1.4 million. This put the actual purchase price at S$4.8 million.

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The bank loaned the property buyer S$4.9 million, or 80 per cent of the stated purchase price. But the loan amount exceeded the property’s actual purchase price. In some cases, the rebates ran up to 34.5 per cent of the stated purchase prices.

The judges of the appellate division observed that LMC did not seem to “fully appreciate the gravity of its conduct”.

The magnitude of the rebates suggests they were not genuine, and LMC had also paid sale commissions based on the actual purchase price rather than the stated purchase price.

Yet, LMC had issued documentation bearing the inflated purchase prices – arming the purchasers with the “instrument to deceive UOB”.

Also, LMC’s inflated stated purchase prices would have formed the benchmark for valuations of other units within the property.

“Not only did it deceive UOB, other appraisers and purchasers would also rely on the purchase price in the option to purchase to value other units in Marina Collection which are purchased or in comparable projects,” said Justice Woo Bih Li, who delivered the judgement.

“The purchase price presented a distorted picture of a segment of the property market.”