Hao Mart sues PropNex Realty, agent for alleged misrepresentation over Taste Orchard lease, cites S$3.5 million in losses

LAWSUIT

Hao Mart is represented by Vita Law’s Sean Francois La’Brooy, and assisted by Watershed Law’s Mr Christian Teo and Ms Esther Yong.  

Its statement of claim, dated Aug 29 this year, stated that Tan’s misrepresentation caused Hao Mart to incur losses amounting to S$3,496,266, consisting of five months’ rental after the project was delayed.

Apart from that, the company alleged that it incurred about S$5.6 million to comply with regulatory approvals, although this amount was not included among the current claims it is seeking. Hao Mart will be relying on the Misrepresentation Act.

It alleged that Mr Tan had a fiduciary relationship with Hao Mart through its director, Dr Tan Kim Yong, who is also CEO of Hao Corp, but failed to act in the company’s best interests. 

Mr Tan had “voluntarily placed himself in a position where he undertook fiduciary duties” to Hao Mart, it argued, referring to six past property transactions in support. Mr Tan was supposedly involved with Hao Mart in these transactions, which occurred between 2019 and 2022. 

Hao Mart also referred to a WhatsApp message Mr Tan had sent to Dr Tan on Nov 14, 2021.

In the message, which came before the letter of intent, Mr Tan told Dr Tan he would “always fight” for him. 

He allegedly continued in the message: “You know my style and the good standing relationship between us, what I can squeeze I sure will.”

“If for the purpose of the letter of intent, (Mr Tan and PropNex Realty) were acting as agents for OG, (Hao Mart) avers that (the defendants) knew or ought to have known that they were placing themselves in a conflict of interest position yet still undertook the fiduciary duties to the claimant,” Hao Mart argued. 

The company further added that Mr Tan indicated he would act in the best interests of Hao Mart for the letter of intent, and there would be no need to seek legal or other professional advice.

As a result, Dr Tan supposedly believed that Hao Mart did not have to inspect the premises or seek legal advice, or engage consultants within the tight time constraints, before signing the letter of intent and lease agreement.

According to Hao Mart, Mr Tan also undertook to sell one of Dr Tan’s properties to raise working capital for the project. However, Mr Tan failed to do so, causing Dr Tan to enter into a facility agreement with OG.

The alleged misrepresentations also encompass several clauses within the letter of intent, such as one which stated that maintenance to be undertaken “for the podium by the tenant including utilities, maintenance of elevators/escalators and air-cons and internal toilets” would not be an issue for Hao Mart. Hao Mart said that these turned out to incur costs.

Mr Tan also failed to ensure a timely handover of the premises, resulting in costs incurred to due to the delay, Hao Mart said. 

Mr Tan had “actually made the representations fraudulently and either knowing that they were false and untrue or recklessly not caring whether they were true or false”, Hao Mart added.