Newspaper reports

Collective sale impetus fizzles out
Sunday Times-5 April 2007

"At the height of the property boom in 2007, 116 collective sales were completed. This figure was whittled down to just eight last year, after the onslaught of the global economic crisis.
There was no collective sale done in the first three months of this year."

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A much needed respite for genuine home owners and "The once fever-hot collective sale market is now stone-cold, and property experts predict it will take at least five years for transactions to reach the pitch seen before."

Though, in five years, the lessons learned from our failed en bloc might well be forgotten through collective amnesia!

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Not an end for en bloc sales

Straits Times - 10 April 2009

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"The judgment has been met by howls of protest from many in the property sector. The fear is that the bar has been set so high that any future deals will be impossible. They say the balance has been shifted too far in favour of en bloc dissenters, such that an en bloc deal becomes vulnerable to even the smallest objections.

As long as sale committee members act on behalf of all owners and transparently, it shouldn’t be a problem,’ said Knight Frank investment sales head Foo Suan Peng.

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It restores the requisite level of care and attention that should be paid when people contemplate selling something they are as emotionally attached to as their homes.
And if society in general eventually learns to be guided by principles other than monetary gains, then it can only be a good thing."

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Let them howl! The scoundrels have had it their way for far too long. The problem was the bar was set so low that sale committees, devoid of all moral responsibility, were acting like gangsters to drive a sale to completion. The gangster character, the desperate bankrupt, the retrenched, the flipper, the double unit owner, the soon-to-be-emigre should all be banned from serving on sale committees. They are at the bottom of any list of suitable candidates and owners should be wary of their ulterior motives.

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"It is the first time the minority group has won on the basis that the sale was not in good faith, and not on a technicality,’ said Mr Philip Fong of Harry Elias Partnership, who represented the objectors."

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Excuse me? That should read "It is the first time the monority group has won on the basis that the sale was not in good faith at the court of appeal."

Tampines Court also won on the basis that the sale was not done in good faith in the method of distribution of the sale proceeds AND in the sale price.

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Glitches at Grangeford

Business Times-15 April 2009

Think of the elderly

Straits Times - 15 April 2009

HORIZON TOWERS WIN!

HORIZON TOWERS MINORITY

WIN AT APPELLATE COURT!
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This is a HUGE win for the minority and a much needed breath of fresh air from the courts . The minority fought long and hard on this one, and they have been rewarded with the most sensible judgment on the en bloc process ever to come out of the courts, and the first ever in favour of the minority. It has taken a long time for the courts to mirror the 'everyman'' view of justice; that if 80% want to force 20% out of their homes against their will, then they had better do it properly. Too long have sale committees/property agents/en bloc lawyers run roughshod over the minority, and increasingly, the majority, too. Looking after their vested interest being the prime motivation in a sale. It seems almost too good to be true. This decision puts POWER back into the hands of the STB to take a good hard look at the sale, especially in the area of good faith; power that previous rulings had stripped away from them, leaving the STB (in my humble layman's opinion) almost impotent in the face of legitimate minority objections. This decision reigns in somewhat the crazy excesses of the purposive approach, defining what the duties of the SC are and when they overstep the mark. Fiduciary duty has regained it's central importance and the Board has to play a "proactive inquisitional role" (reversing Hon. Choo Han Teck's pronouncement that the STB "was not the appropriate forum for considering the conduct of the SC"). The hallowed words of Parliament that the 'safeguards are found in the rules' don't ring so hollow anymore (at least, these are some important wrongs that have been righted).

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The pendulum of Justice has swung back to the centre.

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Horizon Towers ruling: All owners to get slice of $1.9m pie
Straits Times; 17 Jul 2009

En bloc sale of Horizon Towers falls through

ChannelNewsAsia - 2 April 2009

Horizon Towers sale won't go ahead

Business Times - 2 April 2009

Court quashes en bloc sale of Horizon Towers

Business Times - 3 April 2009

Troubled Towers: A timeline

Sunday Times - 5 April 2009

The Lawyers 21/2 tear bonanza of billable hours

Sunday Times - 5 April 2009

Minority Owners: "Sweet victory" but no winner

Sunday Times - 5 April 2009

The Buyers: a good deal that turned sour

Sunday Times - 5 April 2009

The Majority turned Minority: Mixed feelings

Sunday Times - 5 April 2009

The majority Sellers: Stuck with their units

Sunday Times - 5 April 2009

Just glad the saga is over

Sunday Times - 5 April 2009

No ill feelings over failed sale

Sunday Times -5 April 2009

Horizon Towers owners ready to move on

Sunday Times - 5 April 2009

Not an end to en bloc sales

Straits Times - 10 April 2009

Scrutinise future collective sales to protect home owners

Straits Times - 14 April 2009

Failed deal nets Horizon Towers owners $1.5m

Straits Times - 23 April 2009

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The Court of Appeal has issued two documents

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1) Summary of Case (5 pages)

2) Judgment (122 pages long!)

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Ng Eng Ghee and Others v Mamata Kapildev Dave And Others (Horizon Partners Pte Ltd, intervener and Another Appeal[2009] SGCA 14

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From the 'Summary of Case' :-

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"(2) An SC was the agent of all the subsidiary proprietors in relation to the collective sale of their strata units as a result of which a fiduciary relationship arose between the SC and the subsidiary proprietors. Since ............ an Sc had the power to sell the units of objecting subsidiary proprietors against their wishes, the need for the imposition of high standards of conduct upon the SC ................... was even more pressing than in the case of an ordinary common law agency relationship".

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"The SC's duties included: (a)the duty of loyalty or fidelity; (b) the duty of even-handedness (c) the duty to avoid any conflict of interest (d) the duty to make full disclosure of relevant information; and (e) the duty to obtain the best price for the properties of the subsidiary proprietors:"

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(3) In considering whether there was "good faith" in the transaction ..... The Horizon Board should not have confined itself to determining whether the sale price was fair or not, but should have considered what was good faith in general law (common law and equity). The word "transaction" in s 84(A)(9)(a)(i) of the LTSA embraced the entire sale process....."

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(4) A Strata Titles Board had to play a proactive inquisitional role in determining applications for collective sale whenever objections had been filed. It was not confined to the evidence presented to it by the contending parties, but had to seek out the facts whenever there was reason to believe that the SC had not disclosed everything about the transaction to the Board:

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(5) In refusing to subpoena (ex sale committee member) to testify and in allowing the original SC to assert legal privilege in respect to the advice given by it's solicitors, the Horizon Board had erred in law."

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(6) ....the Horizon board had applied the wrong test for conflict of interest. The correct question to ask was whether there was a possible conflict of interest. Furthermore , the Horizon Board had wrongly placed the burden of proof on the objectors:

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(8) In it's ruling that the requirement of "good faith" ........... :meant "honesty, fairness, and absence of unconscionable and perhaps even reckless behaviour", the Horizon Board had erred in law by adopting a narrow interpretation of "good faith":

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(9) In concluding that the original SC had acted in good faith in selling the property to HPL as it had received and relied on legal advice when deciding ......... the Horizon Board had erred again. It was not the law that a fiduciary was entitled to rely on legal advice alone to exonerate itself from any breach of duty.

...ultimately the trustee had to make his own decision in good faith, responsibly and reasonably.

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(10) The judge had erred in law in taking a restricted view of the duties of a Strata Titles Board in dealing with applications for approval for collective sales.

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(11) The original SC had breached its duties as fiduciary agent for all the subsidiary proprietors by failing to act with due diligence and transparency in the process of appointing a property agent; failing to proactively follow up on the Vineyard offer and other expressions of interest; failing to improve the chances of obtaining a better price for the property by leveraging on the Vineyard offer in negotiations with HPL; failing to obtain advice from an independent property expert prior to the sale and disregarding First Tree's obviously conflicting motivation in pushing for the sale; acting with undue haste in finalising the sale to HPL when there was no legal or moral obligation to do so; deciding to sell the Property to HPL when there were undisclosed potential conflicts of interest on the part of the two key SC members; and failing to consult (or even to update) the consenting subsidiary proprietors to seek further instructions despite the surge in the property market: "

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Future sale committees,

en bloc lawyers and property agents beware!

You can no longer get away with blue murder,

engage in tricky business with impunity,

close your ears to minority concerns,

look after your own vested interest,

keep owners out of the picture,

show scant regard to the rules,

ignore higher counter offers

hide behind legal privilege,

sell at the lowest price,

or in haste,

because

the STB is back in the saddle!

Furthermore, they now have INQUISITIONAL POWERS!

REGENT COURT

After losing at the Appellate Court over financial loss and the having the case returned to the STB for continuance ..........Regent Court had it's case dismissed at the STB again; this time for another reason!

Something about the STB insisting that the developer pay Stamp Duty on the sale before the case would be heard by the Board unless all parties agree to 'impound the S&P'. At least two dissenting minority owners did not agree to impound the S&P and so the case was dismissed. Actually, it was a case of the application being rejected rather than the case being dismissed.

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The STB now insist that the stamp duty on the S&P MUST be paid upfront, before an application is made to the Board. Stamp duty is usually paid within 2 weeks of the sale and purchase agreement being signed, but this rule has not been enforced for en blocs up until now. A late payment incurs a heavy penalty by the IRAS. If the STB does not approve a sale then the stamp duty is returned but not the penalty.

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STB circular on Stamp Duty
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Mohamed Amin bin Mohamed Taib and Others v Lim Choon Thye and Others
[2009] SGHC 216