AP Rajah J:

On 14 July 1978 the plaintiff, a Malaysian citizen, entered into an unconditional agreement (completion date 7 August 1978) to purchase No. 135 Chun Tin Road, Singapore for $107,000 from Tan Nam Sui (the defendant). The vendor knew that the purchaser was a Malaysian citizen and what is more the contract was entered into by the parties inspite of the fact that approval to purchase the said property had already been refused, under s. 16 of the Residential Property Act, 1976 (the Act), on 5 July 1978.

On 11 July 1978, before the agreement came into being, the plaintiff sent her cheque for $10,700 by way of deposit in favour of the defendant's solicitors to be held by them as stakeholders.

Purporting to act under cl 15 of the agreement, the defendant, having been advised that ss. 3(1)(c) and 3(2)(c) of the Act did not apply in this matter, forfeited the said deposit on the ground that the plaintiff had failed to complete the sale on 7 August 1978. As against this, the plaintiff was advised 'that the defendant was and is under a legal disability' to forfeit the said deposit 'as the defendant was and is purporting to exercise a term in the said agreement for sale a