A former teacher trusted a property agent so much she gave him four signed blank cheques to be used to settle a property purchase. But the rogue agent instead used the cheques to embezzle $830,000 from her bank account.
Yesterday, Ms Rohini Balasubramaniam, 56, lost her suit to recover the money from his agency, HSR International Realtors.
She had earlier won a default judgment against the former agent, Kelvin Yeow Khim Whye, but has yet to recover any money. Yeow, a bankrupt, is believed to have fled the country.
Justice Chua Lee Ming said it was unfortunate Ms Rohini had suffered loss at the hands of Yeow. But there was no basis in law to hold HSR liable for Yeow's wrongful acts of misappropriating her money, he said, adding that Yeow was able to do so because she had given him signed blank cheques, trusting him to use them for her property deals.
Ms Rohini had testified that she trusted Yeow as he was from a reputable firm and had acted for her parents in previous transactions, which went well.
She was in and out of hospital as a result of knee problems and relied heavily on him to handle the sale of a Bayshore Park apartment and the purchase of a Bedok Court apartment.
"The first defendant was very kind to me. He would visit me and was very helpful to me," she testified.
She said Yeow advised her to take a loan to buy the Bedok Court unit as the proceeds from the sale of the Bayshore apartment might not arrive in time. On Dec 1, 2009, she gave him four cheques, to be used for various payments, including the first loan instalment.
Yeow wrote the cheques in her presence but she did not see what he wrote.
Her January 2010 bank statement would have shown that her loan had not been repaid but she did not check, as she trusted him.
She discovered the fraud only in mid-2010, when she wanted to sell the property and found that the proceeds from the Bayshore flat sale, which she had told him to collect, were not in her account. In fact, the proceeds of about $833,000 had been deposited. But $830,000 was withdrawn shortly after via the four blank cheques.
Granted legal aid, she sued Yeow, who is no longer a registered property agent, and HSR.
Her lawyer, Mr Edmond Pereira, argued it was not inconceivable that she trusted Yeow as he was not a stranger and she expected the group director of a reputable firm to "do the correct thing".
But yesterday, Justice Chua said: "It is not the plaintiff's case that she gave Kelvin the cheques signed in blank because he was authorised by HSR to ask for cheques signed in blank. The plaintiff's case is that she had done so simply because she had trusted Kelvin. Unfortunately for the plaintiff, that is not sufficient reason to hold HSR liable."
Ms Rohini, who uses a wheelchair, said she was very upset with the "totally unexpected" decision.
HSR, through its lawyer Eugene Thuraisingam, said it was sympathetic. "The court has however scrutinised the facts... and held that HSR was in no way negligent in its conduct and therefore cannot be blamed for her loss."
Under the law, property agents cannot handle transaction money related to the sale and purchase of properties.
Mr David Poh, chief executive of real estate firm Asia Wisdom Group, described the case as "unique". This is not a common practice as "99.9 per cent" of buyers and sellers would fill up a cheque before handing it to an agent, he said.
He noted that this was a case of the consumer "over-trusting" the agent and the agent taking advantage of the trust.