A property agent who had his eye on a second-hand Ferrari, but wanted to mull over the purchase, placed a $10,000 deposit to reserve the sports car after being told there were several other prospective buyers.
But Mr Toh Han Yang, who had offered $750,000 for the 458 Italia, backed out of the deal after he failed to drive the price down, upon finding out that the car's market price was about $650,000.
Around this time, the post-dated cheque he had issued to self-styled car dealer Lim Chin Liang was returned due to a problem with his signature.
Two months later, Mr Lim sued Mr Toh for $70,000 over the aborted deal. He sought to recover the $10,000 deposit and claim damages of $60,000, the "loss" he suffered when he sold the car to another buyer for $690,000.
Earlier this month, a district court dismissed Mr Lim's claim for $60,000 but ordered Mr Toh to pay him the $10,000 deposit.
District Judge Seah Chi-Ling found that Mr Toh had been induced by Mr Lim's misrepresentations into signing the sale and purchase agreement and was therefore entitled to rescind the deal.
The judge accepted Mr Toh's testimony that Mr Lim had told him the deposit was just to confirm his interest in the car and that, until he confirms he is going ahead with the purchase, the agreement would not be binding.
Mr Lim has filed an appeal.
On Feb 10 last year, Mr Lim bought the Ferrari from importer Ital Auto for $675,000.
On the same day, he placed an online advertisement on a car listings site, jacking up the car's price to $768,000.
Mr Toh saw the ad and arranged to view the car the next day. The price was knocked down to $750,000 and both men signed a one-page sale and purchase agreement.
Mr Toh handed Mr Lim a cheque for $10,000, post-dated to Feb 20, 2014. That day, Mr Lim banked in the cheque but it was returned.
The circumstances surrounding the signing of the document and the events that followed are in dispute.
Mr Lim argued that the deal had been concluded on Feb 11.
But Mr Toh said that he did not want to commit on the spot and the agreement was just an expression of interest that is non-binding until he confirmed the purchase. The cheque was post-dated to allow him to make more inquiries on the price before making the final decision.
Mr Toh said that after assessing the market price, he offered $650,000 and then $730,000 but was either rejected or ignored, so he told Mr Lim on Feb 13 that the deal was off.
Judge Seah noted a few reasons for accepting Mr Toh's version. He found it unlikely that Mr Toh would commit to the deal after just 20 minutes of negotiations without test-driving the car. He pointed out that Mr Lim could not give a convincing explanation as to why the deposit cheque was post-dated - if the deal was concluded, Mr Lim would more likely have asked for immediate payment.
The judge also noted that the morning after the agreement was signed, Mr Toh had asked another car dealer about two other Ferrari cars. This was entirely consistent with Mr Toh's account that he needed to make further inquiries before committing to the purchase.
This article was first published on April 20, 2015.
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