Jul 28, 2009

The Holy Grail attained

TAMPINES COURT
$692,000
1,690 sqft
Jul-09
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Well, look at that, the old RP! TC resale prices have been climbing upwards over the last 2 months. Clearly, our enclave has been discovered and our generous size and layout appreciated! With a shrinking supply of larger apartments on enormous plots of land, expect the resale prices to climb even further.
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........... and they said they never
would.
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Those who clamoured to sell should now pull up stakes and leave the real homeowners in peace. There is no excuse to drag the estate through the mud again; your dream price has been reached, your plans to downgrade with money in the bank can be realised. The best part is, you won't be forcing others to downgrade along with you with the loss of tens of thousands in CPF. Still others can enjoy the remaining years of their life in the home they have lovingly cared for over the decades. Go now - take your money and run.

I had an interesting chat with an ex-majority owner recently. He was so certain the sale would be approved at the STB that he had bought a replacement unit in 2006/07, but no matter, he is still going strong; renting out the other whilst remaining in TC. He asked whether or not TC should/would go for another en bloc, what was the mood on the ground etc. I really don't have a finger on the pulse, but judging by the large number of units presently undergoing renovation works, I would hazard a guess that people are here to stay. He said that he had been approached to start it up again....... a tho
ught that horrified me for the following reasons:
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1) It shows a callous disregard to the a person's right to a peaceful life in their own home. The last en bloc caused distress to many owners for a great many reasons. Now that Tampines Court is still just getting back on it's feet again, is it right that a few want to 'try their luck' once again?
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2) It perpetuates the divide between those who view their house as their home and those who want to make money.
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3) The person talking to me was clearly unqualified for the task, and the thought that a group of like-minded and ill-equipped individuals driving the en bloc bus without a drivers licence should give TC residents cause for alarm. A nice guy, yes, but niceness is not a prerequisite for such a weighty responsibility. One needs to have a hard head, be mathematical, analytical, intelligent, an experienced negotiator, highly proficient in English, unflappable, someone who can hold their own, nobody's fool ..... with absolute integrity............and Tampines Court hasn't been able to throw up anyone of that calibre yet - never mind three.
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Straits Times - 15 Aug 20009

Jul 17, 2009

The dreamers dream on....

S'pore could see first en bloc sale in a year by year-end
ChannelNewsAsia - 16 June 2009

Well, there will be some estates who set their reserve prices now in the downturn - and will be surprised YET AGAIN when their en bloc sale is finalised 3 years down the road when property prices could very well be higher! How many past en blocs set benchmark reserve prices and attained benchmark prices at the time of sale only to find that their 'benchmark' was a mirage, a sum quickly surpassed in an escalating market. Owners of fine private apartments reduced to joining the HDB ranks yet again. It may have taken 10 years to gain that private property - but only 3 to lose it in an en bloc.
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What is 30% premium now? What is 80% even? All that matters is that AT THE TIME OF COMPLETION OF SALE 2 to 3 years DOWN THE LINE - that is; after the sale has been cleared by the STB and owners get their sale proceeds in the bank, they have sufficient cash and CPF left to buy a replacement unit EQUAL TO or BETTER THAN their present unit in the SAME AREA. Bear in mind, also, an owners age and ability/inability to secure a mortgage. There should be no forced downgrading.

Why would developer-buyers buy extensively now?:-
1) Their land banks are relatively full, though they may still sniff out a few bargains from sellers taken in by the latest property agent spiel - 'catch the next wave' or 'lower your RP by 20%', and my personal favourite : 'sell now before the developer's money runs out'
2) The economic fundamentals are not improving
3) There is still the none-too-small matter of a glut of new units downstream as estates, such as Farrer Court, Gillman Heights & Leedon Heights have been sold en bloc but have not yet even been demolished. Some estates have been leased out in the interim. According to our Minister of National Development, Mr. Mah - over 40,000 new units will be on the market in the next 3 or 4 years.
4) The new flipper tax may keep some speculators away for the time being (4 years maybe?).
5) 99 year properties will be less attractive as they have a short time frame for development.
6) The developers know there is no need to rush in as land does not disappear.
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Straits Times - 10 July 2009
Straits Times - 31 July 2009
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The LTSA rules are still full of loopholes for the unscrupulous to exploit. Owners have become a teeny bit smarter which may translate into either more transparent and honest transactions or (more likely) highly contentious battles between the minorities and majorities right from the word go.
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Channel NewsAsia – 16 July 2009.
Business Times - 16 July 2009
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From 'seeing one en bloc deal' to ' 5 to 10' is quite a jump. By deal, they must only mean the number of estates jump-starting their en bloc processes being ramped up. It's a never-ending treadmill for some estates. The flippers especially have an interest in seeing things escalate as they have a 01 Jan 2010 deadline to get their deals through before they come under the IRAS microscope.

Jul 16, 2009

Ex-Condo MCST Chairman at Laguna Park Fined

Ex-condo chief scoffs at fine for mischief
Straits Times - 22 April, 2009
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FOR his acts of mischief in Laguna Park condominium, Lee Kok Leong, 62, former chairman of its management committee, was fined $1,200.
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'Fine, then fine lah. After all, I can afford it. I can spend $4,000 in one night on karaoke.’


Lee has paid for the damage he caused to his neighbours’ property, amounting to about $600.

But no, he had not apologised to them, he told reporters. And no, he had no regrets about what he had done.

'What’s there to regret? What’s done is done. I am not remorseful.’
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Arrogant bullies are present whenever greed is allowed to get the upper hand, en bloc is match-made for this type of personality. It's a pity the Court didn't make more of an example of Mr. Lee; a rap on the knuckles is not much of a deterrent.
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But then again, look at this case Lim Hong Eng v Public Prosecutor[2009] SGHC 92 at the High Court 17 April 2009.
Here a woman was witnessed as driving through a red light and crashed into a motorbike, resulting in serious injury to the motorcyclist and the DEATH of his pillion rider.
For this, she received only a 1 day imprisonment and a $2000 fine.
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So taking a life through negligent driving is only a tad more serious than gluing your neighbour's lock?
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Condo glue case: Lower court to hear new evidence
THE prosecution has appealed against a $1,200 fine handed down to the former chairman of the Laguna Park management committee for his acts of mischief.

The appeal came up for hearing in the High Court yesterday, but the case was sent back to the lower court for new evidence to be heard.


Businessman Lee Kok Leong, 62, was convicted in April over two mischief charges.


He admitted to inserting super glue into the keyholes of padlocks at the front and rear gates of Mr Yap Cher Sim’s flat in Block 5000E on Aug 25 last year. For that, he was fined $800.


The same day, he committed the same offence at another flat in the same block, belonging to Ms Alice Elizabeth Rappa, resulting in another $400 fine.


Lee could also have been jailed for up to a year for each offence.


The acts of vandalism occurred last July amid a row among residents over whether the condominium should be sold en bloc. Lee was caught in the act by a closed-circuit television camera installed by Mr Yap in the common corridor.


The prosecution appealed against the fine. It also applied for new evidence to be cited for the appeal.
Yesterday, Lee’s lawyer, Mr Ramesh Tiwary, sought an adjournment.


Judge of Appeal Chao Hick Tin noted that the prosecution was seeking to enter new evidence, but he could not hold a trial or make a determination based purely on affidavits.


‘There has to be a further hearing before some other tribunal,’ he said, referring to a provision on criminal procedure.


Deputy Public Prosecutor Jennifer Marie asked for the additional evidence to be recorded by the same district judge that sentenced Lee.


No details of the evidence were disclosed.


But Justice Chao described it as a ‘pertinent piece of evidence’, noting there were three affidavits from the prosecution and one from the defence.


The judge directed that the additional evidence be taken by the sentencing judge without him making any finding.
Straits Times - July 16 2009
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Straits Times - 29 Aug 2009

Jul 15, 2009

Buyer Stamp Duty at the STB



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. For a multi-million dollar deal (eg, $400m) the stamp duty payable is considerable (approx $12m). 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. Regent Court's en bloc sale was thrown out by the STB at the second visit - even though it had just been approved at the High Court - because the Stamp Duty had not been paid.
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Registrar's Circular 1/2009 on Stamping of Agreements Related to the Collective Sale of Property under the Land Titles (Strata) Act, Part VA
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From the High Court decision (Regent Court)
Suit No: OS 17/2008, SUM 3938/2009

28 I would add that I was informed by Mr Low that there is apparently now a practice direction that an applicant for approval of a collective sale is to adduce evidence that the relevant sale and purchase agreement is stamped in support of the application.

What is Stamp duty?
 


Stamp duty is a tax on executed documents relating to properties or interest in properties and shares or interest in shares. Stamp duty is payable only on documents described in the First Schedule to the Stamp Duties Act (Cap 312). These documents include a lease, sale and purchase, gift or mortgage of property. It is not a tax on transactions.
Liability arises once the document is executed. Hence, even if the transaction has been aborted, stamp duty is still payable on the document.
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A document can be presented for stamping at any time before executing (signing). However, once a document is executed (signed), stamp duty must be paid within:
14 days from the date of execution if the document is signed in Singapore;

30 days of its receipt in Singapore if the document is signed overseas.
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An enbloc purchase or ‘block’ purchase is regarded as a single sale transaction, notwithstanding that multiple documents may have been executed. Stamp duty is therefore computed on the collective sale price or block purchase price (i.e. total consideration).

IRAS CIRCULAR on Stamp Duty Treatment for Properties acquired on an En Bloc or "Block" Basis
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4. The Stamp Duties Act provides for a penalty of up to 4 times the amount of deficient duty for a document that is insufficiently stamped. Similarly, a penalty of up to 4 times the stamp duty due may be imposed for stamping after the stipulated time period.
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DRAGON MANSION

First en bloc sale to be marketed in 2009
The freehold Dragon Mansion at 18 Spottiswoode Park Road, near Outram and Tanjong Pagar, has an asking price of about $120 million or $1,020 per sq ft per plot ratio. This is significantly higher than the transacted enbloc sale prices in the area during the 2007 boom. If this price is achieved, the estate’s owners will get around $1.7 million for each of the 72 units.
The estate has a land area of 41,874 sq ft and can be redeveloped into about 120 apartments of 1,000 sq ft in size.
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$120m target for first en bloc site this year
Straits Times - 15 July 2009
This year’s first en bloc sale hits the market
Business Times - 15 July 2009
Channel NewsAsia – 14 Jul 2009
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No matter what the property agents say - owners should set their reserve price high to reflect a good price in a boom market. In 2007, many properties were sold at RPs set in the down period and lived to regret it. Even $1,020 psf for a unit in the Tanjong Pagar seems cheap to me - perhaps the owners should consider upping the RP! It's all about getting a REPLACEMENT PRICE - forget about the flippers and desperados who want to sell to make money; .... it is your one and only property and it is your home.

Jul 12, 2009

Flipper's Tax (and it's repeal)

The Government has come out with an anti-speculation measure (though they insist it is not) which could put a dampener on flipper activity in the en bloc sale market. I don't think it will have a huge effect, but there could be some short term selling to beat the deadline for it's implementation. Flippers with multiple units sold over the last 4 years (with profits undeclared to the taxman) could be saddled with a large tax bill if they put themselves on the IRAS radar after 01 Jan 2010. Better to sell their unsold units now at a loss and lie low. Tax dodging is a fine art...
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Property Tax gains; up to IRAS to decide
Sunday Times - 12 July 2009
Property investors still jittery about tax policy
Sunday Times - 12 July 2009
Analysts-say-more-feedback-should-be-gathered-before-amending-tax-policy
ChannelNewsAsia - 10 July 2009
Draft Income Tax (Amendment) Bill 2009
Today- 10 July 2009
Government clears air over tax on property gains
Business Times - 10 July 2009
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If you are interested, the Ministry must receive your feedback (using the template provided) by 14 JULY 2009
Click on the above link for details.
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22 Aug 2009
The Government has decided to drop the implementation of the new property tax - with 64 feed back receieved , 60 were against the idea.
So, flippers can flip on.

Jul 9, 2009

HORIZON TOWERS COSTS

A very interesting decision on COSTS for Horizon Towers :-
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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 30
07 July 2009
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To recap on the order of proceedings:
1) STB dismissed the sale because of a technicality. (First Tranche)
2) High Court overturned the STB decision and approved the sale and sent it back to the STB.
3) STB approved the sale. (Second Tranche)
4) High Court approved the sale again.
5) Court of Appeal dismissed the sale.
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1. .... A party’s vindication on the merits may prove to be hollow if the fruits of success are soured by uncompensated costs. The primary objective of a costs order is to compensate the successful party for all reasonable costs incurred rather than to punish the unsuccessful party. Nevertheless, it is trite law that the court may exercise its discretion to give different costs orders on the basis of what it thinks is fair and just. In adjudicating on costs, the court also has to bear in mind that unmerited barriers in the path of recovering reasonably incurred costs might well have the chilling effect of deterring parties, in future, from legitimately pursuing or defending their rights.
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This decision determined (a) who is entitled to costs; (b) what costs are recoverable ; and (c) who is liable to pay. The appellate court has the power to deal with the costs of all proceedings preceding the appeal (13).
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From my layman's reading this is what I can glean from the decision..
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(a) Who is entitled to costs
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1.The winning party - in this case the appealing minority owners.
2. The non-appealing minority objectors
11. Where a lower court or tribunal has made a decision against two or more parties with overlapping interests and the appeal succeeds on grounds earlier raised by parties who have chosen not to appeal, should the parties who have chosen not to appeal be also awarded their costs below by the appellate court?
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16. All that need be said for now is that the court’s power to order costs to be paid to parties who have chosen not to appeal must always be judicially exercised. Applications for such orders must also be made timeously to the appropriate appellate court.
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17 The fact that they did not appeal is not critical because other appellants were able to appeal and succeed before us on precisely the same issues. The fact that they had not accepted the “risk” of paying the costs of an unsuccessful appeal is neither here nor there.
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18 We are especially mindful that, given the significant costs (and not insignificant irrecoverable out-of-pocket expenses) incurred at every step of these bitterly fought, convoluted and labyrinthine proceedings, it was not unreasonable for some of the objecting subsidiary proprietors to forgo their appellate participation before this court. We cannot lose sight of the fact that the non-appealing parties have (together with the appellants) been literally driven from pillar to post in their arduous efforts to protect their homes. In their submissions to this court, they have cogently explained why they should be entitled to the costs they have incurred in these proceedings[note: 1]:
[W]e were made to defend our homes against an en bloc process actuated by a lack of good faith. We have sacrificed time, effort and money, not for any gain but to maintain the status quo, that is, to keep our homes.
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All applicants are entitled to one set of costs each as it was not deemed oppressive nor embarrassing or excessive. It was reasonable that each party engage it's own lawyer given the importance of the subject matter at stake - their homes.
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26 Given the emotional and sentimental attachment that people tend to form to their homes, it was quite understandable that each set of appellants chose counsel they trusted to personally manage their case, rather than simply casting their lot together with all of the other objecting subsidiary proprietors. The appellants have quite reasonably explained that they had indeed aligned themselves with other subsidiary proprietors they were familiar with and on that basis had attempted to engage common counsel where feasible.
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3. Successful litigants-in person (ie appealing owners without legal representation).

34. ..successful litigants-in-person would generally be awarded “such costs as would reasonably compensate the litigant for the time expended by him, together with all expenses reasonably incurred”.

(b) What costs are recoverable and (c) Who is liable to pay
Costs were not recoverable for the first STB hearing because the defect (3 missing pages) on which the sale was first dismissed had not been part of the objections filed by the objecting minority owners.
1. The Buyer (the intervener) came in for a dressing down and was ordered to share the costs along with the respondents (majority) for the High Court and Appeals as they
37 . ..[the intervener] took the lead in defending the Horizon Board’s decision to make an order for the collective sale. Indeed, although the intervener was not allowed to appear in the Horizon Board proceedings, it was quite apparent that the intervener was directly or indirectly influencing the majority owners in the conduct of those proceedings. Furthermore, it can be fairly said that the intervener by its conduct engendered the continuation of the dispute in the Second Tranche, the High Court proceedings and the present appeals
38 On the other hand, we note that the respondents could well have simply stood their ground and insisted that the collective sale had been aborted instead of meekly acquiescing to the intervener’s attempt to prevail on them through legal means .... They cannot be permitted to shirk all responsibility for their role in this matter and especially the conduct of the proceedings below.
2. The repondents (majority) are to pay for the second STB proceedings alone, the High Court and Appeals along with the Buyer.
In Summary:
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43 To conclude, our costs orders are as follows:
(a) No order as to the costs for the First Tranche of the Horizon Board Proceedings and OS 1269/2007.
(b) The appellants in CA 119/2008 (represented by HEP) are entitled to, firstly, one set of costs for the Second Tranche of the Horizon Board proceedings, to be taxed for two counsel and borne in full by the respondents; and, secondly, one set of costs for the High Court proceedings and one set of costs for CA 119/2008, each to be taxed on the basis of two counsel and borne equally by the respondents and the intervener. The appellants in CA 119/2008 are not entitled to recover any costs apropos the administrative and constitutional law arguments raised in the Horizon Board proceedings and the High Court proceedings. They are limited to recovering only 60% of the assessed costs of the aforementioned proceedings (see [28] above).
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(c) The appellants in CA 120/2008 are entitled to, firstly, one set of costs for the Second Tranche of the Horizon Board proceedings, to be taxed on the basis of two counsel and borne fully by the respondents; and, secondly, one set of costs for the High Court proceedings and one set of reasonable compensatory costs for CA 120/2008, each pursuant to O 59 r 18A of the Rules and to be borne equally by the respondents and the intervener. They are limited to recovering only 80% of the assessed costs of the aforementioned proceedings (see [28] above), and the costs of the Second Tranche of the Horizon Board proceedings are to be shared equally with the non-appealing parties (see [28] above and (d) below).
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(d) The non-appealing parties (ie, Then Khek Koon and Tan Kim Lian Jasmine) are entitled to, firstly, one set of costs for the Second Tranche of the Horizon Board proceedings, to be taxed on the basis of two counsel and borne fully by the respondents; and, secondly, one set of reasonable compensatory costs for the High Court proceedings pursuant to O 59 r 18A, to be borne equally by the respondents and the intervener. They are also limited to recovering only 80% of the assessed costs of the aforementioned proceedings (see [28] above), and the costs of the Second Tranche of the Horizon Board proceedings are to be shared equally with the appellants in CA 120/2008(see [28] above and (c) above).
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(e) The interest on the deposit money is to be shared by all the subsidiary proprietors and each subsidiary proprietor’s entitlement is to be calculated, based on the share value and strata area of each unit in equal weightage, as illustrated in cl 17.1(a) of the CSA. It is for each individual objecting subsidiary proprietor to decide how he wants to deal with the amount paid over to him.
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Interesting addition..

The distribution of the interest on the deposit was set out in the CSA under paragraph 17. It stated that the interest be distributed to the majority owners only - after deduction of disbursements accrued for individual units (eg solicitor's aborted legal costs). Clever lawyer to make sure his costs were covered even under an aborted sale...
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HOWEVER, this clever clause 17 received a knocking form the Court of Appeal. The solicitors who drew up the CSA had confused beneficial rights with contractual rights and the sale committee is not entitled to decide that only the signatories to the CSA are entitled to the interest. They ordered that ALL owners receive their share in accordance withtheir share value.

The majority owners are tied to their contractual agreement to pay disbursements from their share BUT THE OBJECTING MINORITY OWNERS CAN DO WHATEVER THEY LIKE WITH THE MONEY!.
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TOUCHE!
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16 July 2009
The Straits Times Newspaper is a bit slow off the mark - the ruling came out a week ago...
Straits Times - 16 July 2009