HARBOUR VIEW GARDENS

The Court of Appeal upheld the High Court decision to reject the sale on grounds of bad faith.

Appellate Court decision (15 Nov 2013) here

MA; Colliers

Questions before the court :-

Did the CSC breach its duties under the law, resulting in the transaction not being in good faith? 

46 In our view, the CSC patently breached its duty to act even-handedly as between the Consenting Proprietors and the respondents, having regard to the CSC’s involvement in the manner in which the Additional Payment was offered. 

48 The facts of Allgreen were materially different from those in the present appeal.

51 The CSC also breached its duty of disclosure, transparency and openness.

Did Colliers breach its duties under the law, resulting in the transaction not being in good faith?

52 We also found that Colliers breached its duty of transparency and openness owed to all the proprietors in the Development,

Did the respondents suffer prejudice as a result of the CSC’s and Colliers’ breaches of duty?

Procedural fairness in arriving at the 80% threshold (or, in general, the requisite consent level) is crucial because the remaining minority proprietors would be obliged to sell their properties without having consented to the collective sale if that threshold is met.

In the present case, we found that the process was tainted by elements of non- disclosure and lack of even-handedness on the part of the CSC, with one member of the CSC obtaining the most favourable offer and effectively, the only offer of an incentive payment, at the expense of the other minority proprietors. This amounted to an unacceptable inequality of treatment of the Dissenting Proprietors, and a fortiori, where a member of the CSC was favoured over the other minority proprietors. In the circumstances, the process by which the 80% threshold was achieved had been seriously tainted, and the respondents suffered prejudice as a result 

A final observation 

54 We note that the public tender for the Development was launched even before the 80% threshold was achieved, 

Although para 7(3) of the Third Schedule to the LTSA does not explicitly state that the 80% threshold must be reached before a public tender is launched, it is, in our view, implicit in the opening words of para 7(3) that the requisite threshold under s 84A(1) of the LTSA should be met before the specified modes of sale under para 11 (viz, public tender and auction) can be launched. 

    A DEFINITIVE RULING ON THE 80% AT LAST!   

How does this line up with previous HC decision vis-a-vis the all-important requisite 80%??  Namely the High Court decisions of RAINBOW GARDENS  and REGENT GARDENS
.

Up to now , the requirement was for the estate to have garnered the 80% at point of application to the STB and NOT at point of sale - theoretically  doubling the signature collection from 12 mths to 24.

THIS new ruling has finally moved the goalposts back to their just and equitable point in the process - and not even at the point of sale but AT THE POINT OF TENDER

To a question I put to the enbloc lawyer in TC en bloc Round 1 (6 years ago!): "Is the 80% applicable at point of sale or point of application to the STB?" To which he replied " That has yet to be determined in a Court of Law"

Well, the Court of Appeal has finally made that determination - a day late and a dollar short - but I am happy that at last this prejudicial loophole is now closed.