In the recent Singapore High Court decision in PACC Offshore Services Holdings Ltd v Kensteel Engineering Pte Ltd [2017] SGHC 175 , Justice Tan Siong Thye held that a purchaser’s (of land) lien over monies paid as a deposit creates a security interest that is capable of being the subject matter of a caveat.

The crux of the Judge’s holding may be found at [19] of the judgment, available on Singapore Law Watch here.

This provides:-

“To sum up the position in Whitbread (CA), the purchaser’s lien is a security interest that equity has invented because it would be unfair to the purchaser under a rescinded or terminated sale agreement if such a lien did not exist, given that the purchaser has a right to claim the sum paid towards the sale of the property. In fact, the situation in which a purchaser’s lien becomes relevant is when the contract for sale has been rescinded or terminated, and specific performance of the contract is no longer available. Given that practical reality, it would be illogical for a purchaser’s lien to be dependent on the availability of specific performance because that would deprive the device of the purchaser’s lien of all utility.”

The purchaser’s lien is considered separate and distinct from the purchaser’s equitable interest in the property which arises upon the execution of a sale and purchase agreement. This independently constitutes a caveatable interest in the property that is the subject matter of the SPA.

Consequently, pending the final resolution of the issues between the parties, the Court ordered that the caveat remain in respect of the deposit paid by the initial purchaser of the property (and in respect of which the caveat was lodged), unless the vendor was able to provide an alternative form of security.