Indeed, in this appeal, we would need to consider the legal principles with regard to not only statutory illegality but also illegality at common law.4 Before proceeding to set out the applicable legal principles as well as applying them to the facts of the present appeal, it would be appropriate – by way of background – to first set out the relevant facts, the decision of the Judge, the relevant issues which arise in the present appeal, as well as a summary of the parties’ respective cases.5 The Appellant is the sole owner of 30 Jalan Angin Laut Singapore 489226 (“the Property”). In October 2012, the Appellant granted the Respondents an option to purchase the Property (“the Option”), which was backdated to 4 October 2012.6 Around mid-2012, the Respondents were interested in purchasing a landed property and approached their banker at United Overseas Bank (“the Bank”), Mr Leslie Ong (“Ong”), about the financing of such a purchase.
On 25 October 2012, the Respondents’ solicitors unsuccessfully attempted to exercise the Option at the offices of the Appellant’s solicitors.A series of correspondence between the parties’ solicitors ensued.On 24 October 2012, one day before the expiry of the Option, the Appellant’s solicitors wrote to the Respondents’ solicitors, stating that the Appellant “[did] not want to be a party to any illegality or irregularity” and was withdrawing her offer.According to the Appellant, she only learnt about the 5 October Notice on 19 October 2012 and was then advised not to proceed with the sale of the Property.10 The Respondents’ solicitors responded on 24 October 2012, stating that the Appellant had no right to withdraw the offer as stated in the Option.The focus here is not so much on the individual as such but rather, on society.
To this end, the courts are prepared to override the contractual rights of the parties concerned if to do so would give effect to the greater public good.
 4 SLR 820 (“the Judgment”).2 This appeal concerns the enforceability of an option to purchase a property granted by the Appellant to the Respondents, which was backdated at the request of the latter.
It was common ground that such backdating was effected for the purpose of enabling the Respondents to obtain a higher bank loan in circumvention (as well as contravention) of MAS Notice No 632, a notice prescribed by the Monetary Authority of Singapore (“the MAS”) pursuant to s 55 of the Banking Act (Cap 19, 2008 Rev Ed) (“the Act”).
The Appellant submitted that the illegality in this case was not too remote, given that the procuring of financing was central to the Respondents’ ability to perform their obligations under the Option and the instrument of the Respondents’ deception of the Bank was the backdated Option itself.20 The Respondents argued that any illegality was now irrelevant since the loan from the Bank was never drawn down and since they had already expressed their unequivocal intention to obtain financing in compliance with the 5 October Notice.
They also argued that the Appellant had shifted her case on appeal by raising new characterisations of the alleged illegality and that she should not be allowed to do so because this would unduly prejudice the Respondents.21 In so far as the issue of statutory illegality was concerned, the Respondents submitted that the Judge was correct in concluding that there was no express or implied legislative intention to render the Option unenforceable since s 55 of the Act and the 5 October Notice were directed only at banks and not the public at large.22 In so far as the issue of illegality at common law was concerned, the Respondents argued that the Option was for the legitimate purpose of granting them an option to purchase the Property and that they could not be said to have deceived the Bank when the idea of backdating the Option had originated from Ong, an officer of the Bank itself.
At that time, this was the prevailing limit imposed by MAS Notice No 632 on the quantum of residential property loans for borrowers in the Respondents’ position.7 On 5 October 2012, the MAS issued an amendment to MAS Notice No 632 (“the 5 October Notice”), the effect of which was that the LTV ratio of the Respondents’ proposed loan from the Bank would have to be lowered from 80% to 60%.