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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%.

It was not in dispute that the Respondents knew about the 5 October Notice around the time it was announced.8 On 10 October 2012, the Respondents made an oral offer to the Appellant to purchase the Property.

This notice was prescribed for the purpose of regulating residential property loans.

The Judge held that the said option was enforceable at the instance of the Respondents.3 As we shall see, the present appeal necessitates the consideration of the applicable legal principles in relation to one of the most confused (and confusing) areas in the common law of contract – that of illegality and public policy.

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.