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THE SEEDEVIStrata Titles Board
Small development of 15 units at Evelyn Rd
Decision date: - 10 July 2000
Decision date: - 10 July 2000
(Thevathasan Gnanasundram and Others v Khaw Seng Ghee and Another [2000] SGSTB 4)
Case Number: - STB 19 / 2000
Joint-owners of one unit filed an objection to the sale of the Seedevi at the Strata Titles Board. A summary of their objections and the Board’s responses follows:
1. Insufficient notice was given for EOGM
The notice was sent out by registered post in accordance with the rules set out in the LTSA but the Board said the fact:
“That the objectors were not in Singapore and that receipt of the notice had been delayed is irrelevant. The notice that was sent by registered mail was never returned undelivered”
"In the Board’s opinion, proper and sufficient notice of the EOGM on 3rd March 2000 had been given to the objectors.”
2. Sale price was obtained as a result of a process that was questionable and lacking in good faith demonstrated in 4 aspects –
(a) Selection and role of sale committee
Apparently, 5 of the 6 committee members were related by blood or by marriage. More than 50% of the total number of owners were related to each other; being members of this same family.
The Board saw ‘little merit in the objection’, as ‘according to the minutes of that EGM the [objectors] attended the meeting and all SP’s voted in favour of the appointment of the SC’.
Case Number: - STB 19 / 2000
Joint-owners of one unit filed an objection to the sale of the Seedevi at the Strata Titles Board. A summary of their objections and the Board’s responses follows:
1. Insufficient notice was given for EOGM
The notice was sent out by registered post in accordance with the rules set out in the LTSA but the Board said the fact:
“That the objectors were not in Singapore and that receipt of the notice had been delayed is irrelevant. The notice that was sent by registered mail was never returned undelivered”
"In the Board’s opinion, proper and sufficient notice of the EOGM on 3rd March 2000 had been given to the objectors.”
2. Sale price was obtained as a result of a process that was questionable and lacking in good faith demonstrated in 4 aspects –
(a) Selection and role of sale committee
Apparently, 5 of the 6 committee members were related by blood or by marriage. More than 50% of the total number of owners were related to each other; being members of this same family.
The Board saw ‘little merit in the objection’, as ‘according to the minutes of that EGM the [objectors] attended the meeting and all SP’s voted in favour of the appointment of the SC’.
.
"Notwithstanding the close relationships of the majority of the subsidiary proprietors, the board was not shown any evidence of the related subsidiary proprietors using their dominant position to the disadvantage of the other subsidiary proprietors in the Seedevi where the sale price or the method of distribution was concerned. '
(b) Irregularities in conduct of meetings and pre-determination of agent and lawyer for collective sale
The objectors submitted that:- ‘ the SC wears 2 hats – that of homeowners and that of representatives of other owners. While they might have personal reasons in wanting to rush a collective sale through, they owe a fiduciary duty to other homeowners to ensure that the collective sale is properly conducted’.
The SC ‘should be a conduit for information gathering and that pertinent information regarding the agents, lawyers and their fees should be made available to all homeowners, after which the selection process should be by way of formal vote”
The Board made it clear that:- ‘it is not a court of equity, with powers to grant remedies for any breach of fiduciary duty or for any fraud on the minority. which are based in equity. The Board’s powers are limited to disapproving a collective sale on the grounds specified in the Act and no more. If there had been a breech of fiduciary duty or fraud on the minority committed in the course of the collective sale, the aggrieved minority should institute proceedings in the Courts of Singapore.
The Board “ found it difficult to see how pre-determined and undue pressure in the selection of the MA and solicitors could affect the sale price. These do not fall within the areas of enquiry for determining whether the sale is in good faith.’
(c) The conduct of the enbloc lawyers
(d) The conduct of the marketing agent
'The objector’s argument was that the reserve price is a confidential price and the sellers would be obliged to sell to whoever achieved the reserve price. The reserve price was set low to ‘encourage bidding’. If it were confidential, how could it encourage bidding? '
‘The Board agrees that if indeed the marketing agent had indeed deliberately set the RP low, “leaked” the information to prospective purchasers and then proceeded to close the sale with one of these prospective purchasers, whether by tender or by private treaty, that would be a very clear instance of a sale being less than in good faith. The majority, would have, through they agent, failed to exercise reasonable skill and care or taken reasonable steps to secure a fair price.”
The marketing agent’s explanation was found to be ‘entirely rational’ and not done in bad faith.
…The objectors therefore really have no standing to raise any breach of the collective sale agreement. Only signatories to the collective sale agreement have a cause of action for a breach thereof. Contractual rights are, in any event, not a factor that the Board can ytake into account for purposes of determining good faith under section 84A(9)
“As for public tender, this Board notes that it is not compulsory under the act for every collective sale to be by public tender. That the Seedevi was sold through private treaty itself is not evidence of lack of good faith. What is important to the Board are the circumstances that brought about a change from public tender to private treaty’.
‘The Board did not find anything untoward in the change from public tender to private treaty.’
The Board had to decide whether the collective sale was lacking in good faith with regard to the sale price.
'There is at law a duty on the part of the mortgagee to act in good faith in exercising their power of sale and to take reasonable steps to obtain the best price available, in the circumstances. A mortgagee will have breached his duty if he failed to act with reasonable skill and care or to take reasonably adequate steps to ensure a fair price in relation to the sale. In determining a breach, there are 2 broad areas of inquiry: the steps taken in relation to the sale and the comparison between the sale price and the true price of the property. In this Board’s view, these areas of enquiry are equally relevant for the purposes of section 84A(9).
….The Board agrees with the objectors that the process in which a collective sale is conducted is important in determining whether the sale is in good faith having regard to price. A price obtained after proper steps have been taken is strong evidence of the true value of the property. On the other hand, if it were proven that the price is substantially below the true value, this would be evidence that proper steps were not taken. For example, a rushed and inadequately marketed and advertised sale, which results in a price below a valuation price would not be one done in good faith. Any evidence of collusion between the marketing agent and purchaser would taint the sale transaction beyond redemption.’
…That the majority’s valuation report is an independent one by [valuer] and not by [marketing agent] further strengthens their case that the sale price of the Seedevi is a fair market price and that the sale is at arm’s length. '
The objectors did not put forth any alternate valuation report. '
The Board granted the order to sell.
"Notwithstanding the close relationships of the majority of the subsidiary proprietors, the board was not shown any evidence of the related subsidiary proprietors using their dominant position to the disadvantage of the other subsidiary proprietors in the Seedevi where the sale price or the method of distribution was concerned. '
(b) Irregularities in conduct of meetings and pre-determination of agent and lawyer for collective sale
The objectors submitted that:- ‘ the SC wears 2 hats – that of homeowners and that of representatives of other owners. While they might have personal reasons in wanting to rush a collective sale through, they owe a fiduciary duty to other homeowners to ensure that the collective sale is properly conducted’.
The SC ‘should be a conduit for information gathering and that pertinent information regarding the agents, lawyers and their fees should be made available to all homeowners, after which the selection process should be by way of formal vote”
The Board made it clear that:- ‘it is not a court of equity, with powers to grant remedies for any breach of fiduciary duty or for any fraud on the minority. which are based in equity. The Board’s powers are limited to disapproving a collective sale on the grounds specified in the Act and no more. If there had been a breech of fiduciary duty or fraud on the minority committed in the course of the collective sale, the aggrieved minority should institute proceedings in the Courts of Singapore.
The Board “ found it difficult to see how pre-determined and undue pressure in the selection of the MA and solicitors could affect the sale price. These do not fall within the areas of enquiry for determining whether the sale is in good faith.’
(c) The conduct of the enbloc lawyers
(d) The conduct of the marketing agent
'The objector’s argument was that the reserve price is a confidential price and the sellers would be obliged to sell to whoever achieved the reserve price. The reserve price was set low to ‘encourage bidding’. If it were confidential, how could it encourage bidding? '
‘The Board agrees that if indeed the marketing agent had indeed deliberately set the RP low, “leaked” the information to prospective purchasers and then proceeded to close the sale with one of these prospective purchasers, whether by tender or by private treaty, that would be a very clear instance of a sale being less than in good faith. The majority, would have, through they agent, failed to exercise reasonable skill and care or taken reasonable steps to secure a fair price.”
The marketing agent’s explanation was found to be ‘entirely rational’ and not done in bad faith.
…The objectors therefore really have no standing to raise any breach of the collective sale agreement. Only signatories to the collective sale agreement have a cause of action for a breach thereof. Contractual rights are, in any event, not a factor that the Board can ytake into account for purposes of determining good faith under section 84A(9)
“As for public tender, this Board notes that it is not compulsory under the act for every collective sale to be by public tender. That the Seedevi was sold through private treaty itself is not evidence of lack of good faith. What is important to the Board are the circumstances that brought about a change from public tender to private treaty’.
‘The Board did not find anything untoward in the change from public tender to private treaty.’
The Board had to decide whether the collective sale was lacking in good faith with regard to the sale price.
'There is at law a duty on the part of the mortgagee to act in good faith in exercising their power of sale and to take reasonable steps to obtain the best price available, in the circumstances. A mortgagee will have breached his duty if he failed to act with reasonable skill and care or to take reasonably adequate steps to ensure a fair price in relation to the sale. In determining a breach, there are 2 broad areas of inquiry: the steps taken in relation to the sale and the comparison between the sale price and the true price of the property. In this Board’s view, these areas of enquiry are equally relevant for the purposes of section 84A(9).
….The Board agrees with the objectors that the process in which a collective sale is conducted is important in determining whether the sale is in good faith having regard to price. A price obtained after proper steps have been taken is strong evidence of the true value of the property. On the other hand, if it were proven that the price is substantially below the true value, this would be evidence that proper steps were not taken. For example, a rushed and inadequately marketed and advertised sale, which results in a price below a valuation price would not be one done in good faith. Any evidence of collusion between the marketing agent and purchaser would taint the sale transaction beyond redemption.’
…That the majority’s valuation report is an independent one by [valuer] and not by [marketing agent] further strengthens their case that the sale price of the Seedevi is a fair market price and that the sale is at arm’s length. '
The objectors did not put forth any alternate valuation report. '
The Board granted the order to sell.
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KIM TIAN PLAZAStrata Titles Board
Mixed development on Kirn Tian Road
Decision date: - 04 May 2005
Decision date: - 04 May 2005
(Tan Jui Meng alias Chen weiming and Others v Hoong See Chye and Tan Lem Yee and Others [2005] SGSTB 1)
Case Number: - STB 39 / 2004
Case Number: - STB 39 / 2004
Grounds of Objections of the 8 minority owners:
The collective sale price was below the prevailing market price
Minorities’ valuation was $4 million higher than the purchase price.
"The Board gave due consideration to the [minority valuer testimony and his report] but could not say that the price was…………. “too low”. In one sense the price was not too low because, [ from both majority and minority valuers’ evidence] the collective sale price of $40.2 million resulted in each of the lots getting a better price than if each had been sold individually., which is the main function of a collective sale. The other possible sense of “too low” would be that the property was sold too cheaply in comparison to what it could reasonably have fetched. The Board found no evidence of that. "
"The Board bore in mind the accepted wisdom that valuation is not an exact science but part science and part art requiring subjective judgments to be made. Whilst valuations of professionals are very useful aids and should be given every due consideration, what the Board considered of more importance was what the market itself had to say. "
….that the timing of the sale was not desirable and the sale could have been postponed to a later date when it would have been possible to realize a higher price.
This argument was not accepted by the Board.
Therefore, once the Board is satisfied that the decision to time the sale is not one made in bad faith within the meaning of Section 84A(9), the Board cannot question the majority SP’s timing on the ground that there might be a better price around the corner if they delayed putting the property on sale.
….that the $40,2 million could not be right because when the proceeds of the sale were allocated in the way suggested by the majority SPs, 7 to 8 of the SPs suffered a financial loss within the meaning of Section 84A(7) read with (8).
The Board did not accept this argument.
If any of the SPs suffers a financial loss despite the higher price achieved for every one, as a matter of practicality, the majority SPs will have to deal with this issue if any objection is filed with the Board as otherwise their Section 84A (1) application will be dismissed; but this is a separate issue and has no bearing on whether the collective sale price secured is or is not too low.
Method of distribution
50% Strata Area and 50% Valuation Method
The Board found no inequity in the method of distribution.
The Board granted the order of sale.
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ENG LOK MANSIONSStrata Titiles Board
64 units on Napier Road of varying floor areas but with equal share value.
Decision date: - 11 Oct 2006
Decision date: - 11 Oct 2006
(Tan Hui Peng and Others v Chow Ai Hwa and Another [2006] SGSTB 2 )
Case Number: - STB 41/2006
Two owners (mother and son) objected to the sale.
02 July 2005: - SP’s approved appointment of the marketing agent and solicitors having conduct of the sale and the members of the pro-tem committee.
04 Oct 2005: – 80% threshold was achieved and the CSA ‘was then dated a 4 October 2005’.
02- Mar 2006: – Sold for $138 million (RP was $96 million)
Method of distribution: - based on share value of each unit which was the same for all units, regardless of size.
Grounds of Objections of the 2 minority owners:
One owner had wanted two members of the Board to be disqualified from hearing the case.
She brought the matter to the High Court but was unsuccessful and the court dismissed her application with costs.
That she has an outstanding dispute with the MCST in respect of a debt purportedly owed to the MCST which had yet to be resolved. If the sale were to proceed, the MCST would deduct what was purportedly owed to them and thereby prejudice her case against the claim.
The legality of sale of freehold property.
"The Board is of the view that [this objection is] not a factor that the Board may take into account when determining whether the transaction was in good faith or not. The Act clearly directs that the Board shall only take into account the factors stated in section 84A of the Act and nothing more.
-dispute with the MCST is a private matter for her to deal with and she can pursue them accordingly. Likewise, her contention that properties that are freehold should be owned forever, cannot be upheld. "
(b)That her late husband’s spirit would have no place to go if her property was sold.
The Board, in dealing with [objector’s] emotional objections found some guidance in the parliamentary debate on the 3rd reading of the LTSA Amendment Bill.
…."Professor S. Jayakumar said in respect of the emotional factors, “ the approach by the Board is not to adjudicate and decide on these matters. We should leave it to all parties, whether it is the emotional aspect of an elderly lady, or widow or some other emotional aspects….but in the end, it should be a decision left to the parties to decide”.
(c) That she would suffer financial loss on the basis of replacement cost.
The determining test is whether there is financial loss and not that of a replacement cost. This is clearly provided for under Section 84A 7(a) of the Act..
.…the Act clearly states that a proprietor shall not be taken to have suffered financial loss by reason only that “ his net gain from the sale of his flat will be less than that of the other proprietor”.
(d) That the transaction was not made in good faith in view of
i) the valuation
The Board gave due consideration to the Valuation Report and the sale price. Valuation is not an exact science nor one which can be derived from a formula. Whilst there are objective factors to bear in mind such as location and tenure of the property, it also requires a judgment call. We are satisfied that the valuation was not suppressed in order to achieve the collective sale.
…..The timing of the sale is a decision that can only be made by the owners and it is not for the Board to substitute a decision.
ii)the method of distribution of sale proceeds and
The Board examined the various methods of distribution of the sale proceeds. The Board also took into account the process of the collective decision-making.
….The Board also took into account the overwhelming number of proprietors of Large Lots who willingly agreed or at least did not object to distribute the proceeds based on share value.
The Board does not find any reason why the decision of the majority should be changed and accordingly reject the objectors’ contention on this issue.
iii) the Eogm being conducted improperly and that there was coercion and lack of information on the sale.
. ….The Board is also satisfied that the other claims by the Objectors are unmeritorious.
Each case must be decided on its own facts and merits. The Board has reviewed the entire Objectors’ allegations. We do not have any reason to interfere with the decision of the majority.
The Board granted the order of sale.
Case Number: - STB 41/2006
Two owners (mother and son) objected to the sale.
02 July 2005: - SP’s approved appointment of the marketing agent and solicitors having conduct of the sale and the members of the pro-tem committee.
04 Oct 2005: – 80% threshold was achieved and the CSA ‘was then dated a 4 October 2005’.
02- Mar 2006: – Sold for $138 million (RP was $96 million)
Method of distribution: - based on share value of each unit which was the same for all units, regardless of size.
Grounds of Objections of the 2 minority owners:
One owner had wanted two members of the Board to be disqualified from hearing the case.
She brought the matter to the High Court but was unsuccessful and the court dismissed her application with costs.
That she has an outstanding dispute with the MCST in respect of a debt purportedly owed to the MCST which had yet to be resolved. If the sale were to proceed, the MCST would deduct what was purportedly owed to them and thereby prejudice her case against the claim.
The legality of sale of freehold property.
"The Board is of the view that [this objection is] not a factor that the Board may take into account when determining whether the transaction was in good faith or not. The Act clearly directs that the Board shall only take into account the factors stated in section 84A of the Act and nothing more.
-dispute with the MCST is a private matter for her to deal with and she can pursue them accordingly. Likewise, her contention that properties that are freehold should be owned forever, cannot be upheld. "
(b)That her late husband’s spirit would have no place to go if her property was sold.
The Board, in dealing with [objector’s] emotional objections found some guidance in the parliamentary debate on the 3rd reading of the LTSA Amendment Bill.
…."Professor S. Jayakumar said in respect of the emotional factors, “ the approach by the Board is not to adjudicate and decide on these matters. We should leave it to all parties, whether it is the emotional aspect of an elderly lady, or widow or some other emotional aspects….but in the end, it should be a decision left to the parties to decide”.
(c) That she would suffer financial loss on the basis of replacement cost.
The determining test is whether there is financial loss and not that of a replacement cost. This is clearly provided for under Section 84A 7(a) of the Act..
.…the Act clearly states that a proprietor shall not be taken to have suffered financial loss by reason only that “ his net gain from the sale of his flat will be less than that of the other proprietor”.
(d) That the transaction was not made in good faith in view of
i) the valuation
The Board gave due consideration to the Valuation Report and the sale price. Valuation is not an exact science nor one which can be derived from a formula. Whilst there are objective factors to bear in mind such as location and tenure of the property, it also requires a judgment call. We are satisfied that the valuation was not suppressed in order to achieve the collective sale.
…..The timing of the sale is a decision that can only be made by the owners and it is not for the Board to substitute a decision.
ii)the method of distribution of sale proceeds and
The Board examined the various methods of distribution of the sale proceeds. The Board also took into account the process of the collective decision-making.
….The Board also took into account the overwhelming number of proprietors of Large Lots who willingly agreed or at least did not object to distribute the proceeds based on share value.
The Board does not find any reason why the decision of the majority should be changed and accordingly reject the objectors’ contention on this issue.
iii) the Eogm being conducted improperly and that there was coercion and lack of information on the sale.
. ….The Board is also satisfied that the other claims by the Objectors are unmeritorious.
Each case must be decided on its own facts and merits. The Board has reviewed the entire Objectors’ allegations. We do not have any reason to interfere with the decision of the majority.
The Board granted the order of sale.
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WATERFRONT VIEWStrata Titles Board
99 year Privatised HUDC estate
583 units all having the same share value
Decision date: - 05 Feb 2007
583 units all having the same share value
Decision date: - 05 Feb 2007
(Tan Yew Lee kevin and Others v Wee Beng and Others [2007] SGSTB 1 )
Case Number: - STB 68/2006
04 Mar 2006: - commenced signing of CSA
17 Apr 2006: – 80% threshold was achieved
23 May 2006: – Sold for $385 million (RP was $370 million)
15 Aug 2006: - Application to the STB
17 initial Objections to the sale – 1 went for Hearing.
Method of distribution: - share value only
Grounds of Objections of the 1 minority owner:
That the applicants did not comply with the provisions of Section 84A (3) of the act in that the applicants failed to annex to their Application a separate valuation report and a separate report by a valuer on the proposed method of distributing the proceeds of the sale under the S&P agreement.
(The Marketing Agent was also a national director and head of the valuation advisory services for the property consultants who did the Valuation report. The recent changes to the rules now state that an “independent valuer’ has be used)
The complaint of the [objector] is that the Annex 8 of the Application contained only a Valuation Report prepared by [the Valuer] with a paragraph entitled “COMMENTS”. The valuation report states that;
“We have been informed that the distribution of sale proceeds is by way of share value only. i.e. each unit is entitled to 1/583 of the sale proceeds. We are of the opinion that the method recommended by [the marketing agent] is not unreasonable, taking into account the composition of the units within the development.”
The Board examined the Valuation Report that was prepared by [the Valuer] and concluded that the objections raised by the [objector] were without merit. Although the relevant portion of the Valuation Report was entitled “COMMENTS”, it was nevertheless in substance a report containing a valuer’s opinion on the method of distribution adopted by the majority of the SPs. The fact that the valuation Report did not conform squarely to the recommendation issued by the Singapore Institute of Surveyors and Valuers does not detract that it was nevertheless a report.
The Board noted that the report on the proposed method of distribution was not the best report prepared and that it fell short of the high standard expected especially when involving a project of this size. The report should have been given a sufficient reasoned conclusion.
The Objector submitted that they had suffered financial loss of -$139,306.77
The [objector] argued that there would be a financial loss to their CPF accounts because the nett proceeds are insufficient to fully repay the outstanding bank loan and fully refund their CPF monies withdrawn for the purchase of the property. The main thrust of their argument is that outstanding CPF amounts should be an allowable deduction by the Board under Section 84A (8) (a) of the Act. The CPF Board had written to them on 13 November 2006 and confirmed that “if the sale proceeds after deducting the outstanding housing loan owing to the mortgagee is insufficient to fully refund the principle amount withdrawn and accrued interest to both your CPF accounts, the CPF board does not require both of you to make good the shortfall to your CPF account in cash. Instead, only the net sale proceeds (i.e. the selling price less outstanding housing loan) is required to be refunded to your account.” The CPF board treated the shortfall between the total CPF used plus accrued interest and the nett sale proceeds as a financial loss to their CPF accounts.
The Act spells out clearly how the Board is required to deal with the issue of financial losses
Section 84A (8) (a) of the Act states that a SP “shall be taken to have incurred a financial loss if the sale proceeds of the sale for his lot. After deduction allowed by the Board, are less than the price he has paid for his lot”.
…it is clear that there was no financial loss as the proceeds of the sale less allowable deductions are not less than the price they had paid for their lot.
The Board also found that there is no basis to agree with their view that the ‘net proceeds of the sale are insufficient to redeem our mortgage and CPF charge” and this amounted to financial loss. This objection can only be properly made under Section 84A (7) (b) of the Act. Applying this section and in view of the CPF Board’s letter that they will allow the redemption, the [objectors] could with the proceeds of sale redeem the mortgage and discharge the charge. The Board is satisfied that the [objectors’] objection does not come within the ambit of Section 84(A) (7) (b).
That the penalty paid to the bank for should also be an allowable deduction.
The Board’s view is that this should not be an allowable deduction as it is a private contractual matter between the bank and the [Objectors]. It is totally unrelated to the price they had paid for their lot
That the transaction was not done in good faith
That the sale committee “should have seen the tender process through to the end instead of switching to a sale by private treaty, the estate was not sold at a fair price, and the method of distribution was inequitable.”
The Board said “ In STB No 19 of 2000 [the Seedevi] the same issue arose before the Board. In that case it was decided that it was not compulsory under the Act that every collective sale must be by way of public tender.
What is important is for the Board to examine the circumstances and the reasons that led to the change and is satisfied with the reasons given by the applicants.
We examined the circumstances and reasons why the Sale Committee took this course of action. We accepted the reasons given by [ SC Chairman?} as to why the offer was accepted. The reasons which are valid and unchallenged included that few companies had the financial capacity for such a large purchase. More importantly, the offer was $15 million above the reserve price. The nearest concrete offer was made in 2005 by --- Group and for a sum of $380 million.
That the property was not sold at a fair market value
We conclude that there is no evidence before us to uphold their view.
We cannot find any reason why [the valuation] should be rejected more so in the absence of an alternative valuation report that ought to have been given by the [objectors].
That the method of distribution was unfair.
They “suggested that a distribution by share value is unfair as it enhances the proceeds of the lower floor units at the expense of the higher floor units or those with better facing which were purchased at a premium”.
There is no simple solution to this complex problem. The method of distribution is an issue for the Sp’s to decide and the Board will not impose its subjective views on them. As the law stands, the Board will examine and will not approve the application if the board is satisfied that the method of distributing the proceeds of sale is not in good faith.
The Board granted the order of sale
Case Number: - STB 68/2006
04 Mar 2006: - commenced signing of CSA
17 Apr 2006: – 80% threshold was achieved
23 May 2006: – Sold for $385 million (RP was $370 million)
15 Aug 2006: - Application to the STB
17 initial Objections to the sale – 1 went for Hearing.
Method of distribution: - share value only
Grounds of Objections of the 1 minority owner:
That the applicants did not comply with the provisions of Section 84A (3) of the act in that the applicants failed to annex to their Application a separate valuation report and a separate report by a valuer on the proposed method of distributing the proceeds of the sale under the S&P agreement.
(The Marketing Agent was also a national director and head of the valuation advisory services for the property consultants who did the Valuation report. The recent changes to the rules now state that an “independent valuer’ has be used)
The complaint of the [objector] is that the Annex 8 of the Application contained only a Valuation Report prepared by [the Valuer] with a paragraph entitled “COMMENTS”. The valuation report states that;
“We have been informed that the distribution of sale proceeds is by way of share value only. i.e. each unit is entitled to 1/583 of the sale proceeds. We are of the opinion that the method recommended by [the marketing agent] is not unreasonable, taking into account the composition of the units within the development.”
The Board examined the Valuation Report that was prepared by [the Valuer] and concluded that the objections raised by the [objector] were without merit. Although the relevant portion of the Valuation Report was entitled “COMMENTS”, it was nevertheless in substance a report containing a valuer’s opinion on the method of distribution adopted by the majority of the SPs. The fact that the valuation Report did not conform squarely to the recommendation issued by the Singapore Institute of Surveyors and Valuers does not detract that it was nevertheless a report.
The Board noted that the report on the proposed method of distribution was not the best report prepared and that it fell short of the high standard expected especially when involving a project of this size. The report should have been given a sufficient reasoned conclusion.
The Objector submitted that they had suffered financial loss of -$139,306.77
The [objector] argued that there would be a financial loss to their CPF accounts because the nett proceeds are insufficient to fully repay the outstanding bank loan and fully refund their CPF monies withdrawn for the purchase of the property. The main thrust of their argument is that outstanding CPF amounts should be an allowable deduction by the Board under Section 84A (8) (a) of the Act. The CPF Board had written to them on 13 November 2006 and confirmed that “if the sale proceeds after deducting the outstanding housing loan owing to the mortgagee is insufficient to fully refund the principle amount withdrawn and accrued interest to both your CPF accounts, the CPF board does not require both of you to make good the shortfall to your CPF account in cash. Instead, only the net sale proceeds (i.e. the selling price less outstanding housing loan) is required to be refunded to your account.” The CPF board treated the shortfall between the total CPF used plus accrued interest and the nett sale proceeds as a financial loss to their CPF accounts.
The Act spells out clearly how the Board is required to deal with the issue of financial losses
Section 84A (8) (a) of the Act states that a SP “shall be taken to have incurred a financial loss if the sale proceeds of the sale for his lot. After deduction allowed by the Board, are less than the price he has paid for his lot”.
…it is clear that there was no financial loss as the proceeds of the sale less allowable deductions are not less than the price they had paid for their lot.
The Board also found that there is no basis to agree with their view that the ‘net proceeds of the sale are insufficient to redeem our mortgage and CPF charge” and this amounted to financial loss. This objection can only be properly made under Section 84A (7) (b) of the Act. Applying this section and in view of the CPF Board’s letter that they will allow the redemption, the [objectors] could with the proceeds of sale redeem the mortgage and discharge the charge. The Board is satisfied that the [objectors’] objection does not come within the ambit of Section 84(A) (7) (b).
That the penalty paid to the bank for should also be an allowable deduction.
The Board’s view is that this should not be an allowable deduction as it is a private contractual matter between the bank and the [Objectors]. It is totally unrelated to the price they had paid for their lot
That the transaction was not done in good faith
That the sale committee “should have seen the tender process through to the end instead of switching to a sale by private treaty, the estate was not sold at a fair price, and the method of distribution was inequitable.”
The Board said “ In STB No 19 of 2000 [the Seedevi] the same issue arose before the Board. In that case it was decided that it was not compulsory under the Act that every collective sale must be by way of public tender.
What is important is for the Board to examine the circumstances and the reasons that led to the change and is satisfied with the reasons given by the applicants.
We examined the circumstances and reasons why the Sale Committee took this course of action. We accepted the reasons given by [ SC Chairman?} as to why the offer was accepted. The reasons which are valid and unchallenged included that few companies had the financial capacity for such a large purchase. More importantly, the offer was $15 million above the reserve price. The nearest concrete offer was made in 2005 by --- Group and for a sum of $380 million.
That the property was not sold at a fair market value
We conclude that there is no evidence before us to uphold their view.
We cannot find any reason why [the valuation] should be rejected more so in the absence of an alternative valuation report that ought to have been given by the [objectors].
That the method of distribution was unfair.
They “suggested that a distribution by share value is unfair as it enhances the proceeds of the lower floor units at the expense of the higher floor units or those with better facing which were purchased at a premium”.
There is no simple solution to this complex problem. The method of distribution is an issue for the Sp’s to decide and the Board will not impose its subjective views on them. As the law stands, the Board will examine and will not approve the application if the board is satisfied that the method of distributing the proceeds of sale is not in good faith.
The Board granted the order of sale
.
LINCOLNSVALE –HIGH COURT
minority case
Decision date: 27 May 2007
(Sim Lian (Newton) Pte Ltd v Gan Beng Cheng Raynes and Another [2007] SGHC 84)
Suit Number: OS 618 /2007
The respondents in this case were joint owners of one unit. You may remember the Straits Times article about this couple; they claimed they had not been informed by the enbloc lawyer about the enbloc sale and only knew about it when their neighbours started moving out and they were left alone. I have a newspaper clipping which reads:
‘“If he’s not keen on the sale, does it matter if he’s informed or not?” – spokesman for the property agent on why he felt there was no need to inform the home owner that his apartment was put up for sale on enbloc.’
Background:
Sale and Purchase Agreement : 25 November 2005
STB order of sale: 22 June 2006 (the first STB Order)
(a) No objection to the sale of Lincolnsvale had been filed with the STB; and
(b) The STB was satisfied that the sale was in good faith ………..
The Board ordered that all units be sold collectively and that all SPs be bound by all the terms in the S&P Agreement and that all SPs do the necessary to convey Lincolnsvale to the buyers. Because the respondents failed to obey the first STB order, a representative was “appointed to deal with all matters in connection with the sale of the respondents unit”. Consequently the unit was transferred on 10 October 2006. Respondents had 6 months to vacate the premises and when they did not do so, “a letter of demand was issued …..requesting that the respondents move out by 18 April 2006.” The respondents did not do so, and 2 further letters were sent. “[Buyer’s] solicitors then took out the present application to force the eviction of the respondents.”
“In the evening before the hearing…. The respondents handed the key to their unit in Lincolnsvale under protest to the night watchman” Accompanied by a letter which read -
“ As far as notification went, I am able to declare to any Court that I have not received a single cent over the enforced and purported sale of my subsidiary property although I am forced to vacate from it. It was only through my own diligence that I realized, but too belatedly, that some money has gone into my CPF account. If this payment to the transaction [sic] it will be partial and huge shortfall remains.
That I am now leaving a door key to my property to your end’s watchman [sic] is done strictly and solely under severe duress and intimidation for I do not wish myself and wife to go bankrupt, guaranteed, given the project delays your end was hovering my head and, the lack of confidence of a sympathetic court [sic].”
The buyer was not happy with this letter and the manner of handing over the key and so this OS application was made.
I will look at the respondents’ case first (they represented themselves):
The owner raised the following arguments but “Above all, [the owner] was extremely upset at being dragged through the present court proceedings and said as much that the application was an abuse of process and an attempt at intimidating them. She also expressed that she and her husband were under a lot of stress as a result of the entire affair and had, in fact, suffered financially by having to pay some $5,500 to rent alternative accommodation in such a short notice.”;
The respondents claimed that:
(a) The process of the sale was defective, as evidenced in the following instances;
(i) The sale committee was randomly formed based on who signed up first rather than who was most suitable.
The Board said: …..But even if the respondents’ portrayal of the sale committee’s ineptness is correct, it is clear that the LTSA and the BMSMA do not presently regulate the composition of the en bloc sale committee, and therefore the subsidiary proprietors are free to select whomever they wish to represent them in whatever manner they choose to make that selection.
(ii) The extraordinary general meetings (EOGMs) on 12 January 2006, 17 March 2006 and April 26 2006 to consider the sale were held only after the S&P Agreement had been signed, and to this extent, they were a sham and orchestrated simply to fulfill a statutory requirement that there must be an EOGM to consider the sale.
There must of course be an EOGM to consider the sale, but no time lines are mandated in the LTSA. Thus, as in this case, the EOGM to consider the sale may well take place after the collective sale agreement and/or the sale and purchase agreement with the prospective purchaser are concluded. Although this would defeat what I assume to be at least one of the purposes behind the LTSA requiring an EOGM –viz, to publicise and discuss the prospective sale before it is concluded – this cannot be considered, in the absence of legislation stating otherwise, contrary to law
.
(iii) There was no voting at any of the EOGMs
Under para 1(c) of the Schedule of the LTSA, the EOGMs are held to “consider” the sale; there is no requirement for any voting or any passing of any resolutions.
(iv) The proper disclosures of vested interest were not made. For example, the sale committee and/or the lawyers involved in the sale might have been affiliated with the [buyer]. Also, one of the sale committee members seems to have been related to the owners of certain drainage reserve land in Lincolnsvale (which was sold under a separate contract to [buyer] but this kinship was not declared to the STB.
The first instance of non-disclosure, if true, is not material. The LTSA does not forbid a member of the sale committee to possess a vested interest in the sale of the development by virtue of the fact that he owns other lots apart from his residential unit in the same development. What the LTSA does mandate is the disclosure of any links between the proposed purchaser and the subsidiary proprietors in order to ensure that the sale is at arms length:
In this regard, it is mere hypothesis on the part of the respondents that a relationship existed between [buyer] and the subsidiary proprietors, which ought to have been disclosed. It was not even explained whom among the subsidiary proprietors were related to the [buyer]. Clearly, this bare assertion is not sufficient to warrant trial.
In any event, [the buyer] would have had to make a statutory declaration of any relationship (if any) it had with the subsidiary proprietors pursuant to the application to the STB to confirm the sale. Having done so, there is no reason to doubt the veracity of the contents of the declaration given the consequences that [buyer] faces if it had made any false declarations.
More to the point, the LTSA only directs that such relationships are disclosed, it does not forbid them per se.
Put another way, even if [buyer] did share a relationship with the subsidiary proprietors, and even if this was disclosed, the STB would in all probability have still confirmed the sale.
(v) They (i.e. the respondents) were not fully informed, if at all, about the sale of Lincolnville until everything had been signed. Notices should have been sent to the post Office Box address rather than any other address since they were constantly moving between apartments.
…. The LTSA does not make it compulsory for each subsidiary proprietor to be personally informed. While personal notice is eventually required, there is nothing mandating a sale committee (so long as it is able to garner the requisite shareholding) to publicise the sale to each and every subsidiary proprietor personally., save that a notice of who has assented to the collective sale agreement must be affixed in a conspicuous part of each building in the development every eight weeks (para 1(b) of the Schedule of the LTSA)
…..personal notice is only required when an application to the STB to confirm the sale is nigh.
(vi) They (i.e. respondents) had written to enquire as to whether there were other parties who had submitted tender bids for Lincolnsvale during the EOGM on 12 January 2006 EOGM but no reply was forthcoming.
This description may not be entirely accurate, In fact, an examination of the minutes of an EOGM held on 26 April 2006 showed that there was a discussion on the number and details of other bids. Had the respondents been patient, they would have received their answer.
Moreover, the LTSA does not regulate how the sale committee should respond (or indeed if they have to respond at all) to queries and concerns of the subsidiary proprietors. Thus, while one may sympathize with the respondents’ grievances, the only recourse of the subsidiary proprietors who are dissatisfied with the sale committee’s performance appears to be that they may refuse to sign on the collective sale agreement and/or lodge an objection with the STB.
(vii) Statute requires that STB orders must be “certified” before it has binding effect in accordance with s 119 of the Building maintenance and Strata management Act 2004 (No. 47 of 2004)(“the BMSMA”). This was not done for the first and second STB Orders; and
(viii) They (i.e., the respondents) have yet to receive the full sum they are entitled to under the sale of Lincolnsvale.
… this could not be further from the truth. The bulk of the sale proceeds has either been paid into court (pursuant to s 84C(2)* of the LTSA or withheld by [solicitor] until vacant possession is delivered.
*84C(2) The president, deputy president or registrar of the Board may authorise the person appointed under subsection (1) to act for the subsidiary proprietor concerned in all aspects of the sale, including the redemption of mortgages and charges, the execution of the transfer, the receipt of moneys, the settlement of encumbrances on the lot, applying for a replacement subsidiary strata certificate of title, giving valid receipts thereof and as soon as practicable paying the remaining moneys into court under section 62 of the Trustees Act (Cap. 337).
(c) Even on the [buyer’s] best case, vacant possession should be delivered only on 15 May 2007 at the earliest, as this was the indication in the EOGM minutes; and
Even a cursory study of the relevant portion of the minutes, as quoted above, will reveal that the minutes do not indicate a firm date of May 15 2007. More importantly, the tenor of the minutes suggests that any dates indicated were only estimates.
(d) The respondents have a fee simple title to their unit in Lincolnsvale and this was inviolable and insulated them from any court proceedings, including the present application by the [buyer].
In 1998, Parliament enacted legislation to facilitate the collective sale of individual strata titles; and a conscious decision was made that unanimity was not required to sell an entire development collectively.
….the law would be amended to remove the need for unanimous consent.
These limitations on the absolute right of subsidiary proprietors of property in land to decide whom to sell to, when to sell, and to reject a sale have been imposed by Parliament’s careful weighing of the various constituent interests of the nation and individual subsidiary proprietors. The rules apply to all subsidiary proprietors regardless whether they own a fee simple or leasehold.
The applicant’s case
The applicant in this case is the buyer.
[Buyer’s] position is relatively straightforward: due process having been followed, it is contractually entitled to the delivery of vacant possession of all units in Lincolnsville. Accordingly, the court should allow its application under O 81 of the Rules and order that the respondents hand over possession of their unit immediately.
..[buyer] , being the registered owner of Lincolnsvale, holds an indefeasible title free from all unregistered encumbrances, liens, estates and interests. This is sufficient to find that the respondents are trespassers and that they must turn in vacant possession of their unit to [buyer[. It was also contended that there was no place for equity to intervene in the present context, primarily because the respondents knew of the ongoing collective sale but willfully chose not to participate or even register their protests in accordance with the procedures laid down by the relevant statutory provisions.
It follows from the foregoing analysis that the application in OS 618 2007 should be allowed for the following reasons;
(a) the burden on the respondents is to show that there are triable issues – real and substantial conflicts of fact of law – present in this case such that a summary proceeding for the possession of their unit would be inappropriate:
(b) [Buyer} is the registered owner of all the units in Lincolnsvale, and its title is subject only to a showing that the respondents case falls within one of the enumerated exceptions under ss 46(2) or 160 of the LTA. The respondents could also demonstrate that a personal equity has arisen in their favour…..
(c) On the facts before me, I am not persuaded that there was any procedural error in the conduct of the collective sale of Lincolnsvale. As such, I cannot find any triable issue in respect of whether [buyer] has been defeated by fraud, mistake or unconscionable conduct on its part.
(d) In addition, I am not convinced that the respondents are bound to hand over vacant possession of their unit only on 15 may 2007, as purportedly recorded in the minutes of the EOGMs. This argument was based on an erroneous reading of the minutes and there was no agreement to this effect. Even if such an agreement had been reached, this was clearly varied by subsequent events and conduct of the parties. Once more, there is no triable issue in respect of the date that vacant possession must be delivered, and
(e) Even as owner of a fee simple in their unit, the respondents are bound in law to convey they unit pursuant to a collective sale confirmed and approved by the STB. There is no triable issue in relation to whether the respondents’ ownership of a fee simple estate in their unit entitles them to immunity from the present claim and attendant proceedings.
Accordingly, [buyer] is entitled to recover the property known as [#01-##] ….and I order that the respondents do give possession of this property immediately. This order is made without prejudice to [buyer]‘s rights to bring further and separate action against the respondents for damages for trespass to the said property.
Suit Number: OS 618 /2007
The respondents in this case were joint owners of one unit. You may remember the Straits Times article about this couple; they claimed they had not been informed by the enbloc lawyer about the enbloc sale and only knew about it when their neighbours started moving out and they were left alone. I have a newspaper clipping which reads:
‘“If he’s not keen on the sale, does it matter if he’s informed or not?” – spokesman for the property agent on why he felt there was no need to inform the home owner that his apartment was put up for sale on enbloc.’
Background:
Sale and Purchase Agreement : 25 November 2005
STB order of sale: 22 June 2006 (the first STB Order)
(a) No objection to the sale of Lincolnsvale had been filed with the STB; and
(b) The STB was satisfied that the sale was in good faith ………..
The Board ordered that all units be sold collectively and that all SPs be bound by all the terms in the S&P Agreement and that all SPs do the necessary to convey Lincolnsvale to the buyers. Because the respondents failed to obey the first STB order, a representative was “appointed to deal with all matters in connection with the sale of the respondents unit”. Consequently the unit was transferred on 10 October 2006. Respondents had 6 months to vacate the premises and when they did not do so, “a letter of demand was issued …..requesting that the respondents move out by 18 April 2006.” The respondents did not do so, and 2 further letters were sent. “[Buyer’s] solicitors then took out the present application to force the eviction of the respondents.”
“In the evening before the hearing…. The respondents handed the key to their unit in Lincolnsvale under protest to the night watchman” Accompanied by a letter which read -
“ As far as notification went, I am able to declare to any Court that I have not received a single cent over the enforced and purported sale of my subsidiary property although I am forced to vacate from it. It was only through my own diligence that I realized, but too belatedly, that some money has gone into my CPF account. If this payment to the transaction [sic] it will be partial and huge shortfall remains.
That I am now leaving a door key to my property to your end’s watchman [sic] is done strictly and solely under severe duress and intimidation for I do not wish myself and wife to go bankrupt, guaranteed, given the project delays your end was hovering my head and, the lack of confidence of a sympathetic court [sic].”
The buyer was not happy with this letter and the manner of handing over the key and so this OS application was made.
I will look at the respondents’ case first (they represented themselves):
The owner raised the following arguments but “Above all, [the owner] was extremely upset at being dragged through the present court proceedings and said as much that the application was an abuse of process and an attempt at intimidating them. She also expressed that she and her husband were under a lot of stress as a result of the entire affair and had, in fact, suffered financially by having to pay some $5,500 to rent alternative accommodation in such a short notice.”;
The respondents claimed that:
(a) The process of the sale was defective, as evidenced in the following instances;
(i) The sale committee was randomly formed based on who signed up first rather than who was most suitable.
The Board said: …..But even if the respondents’ portrayal of the sale committee’s ineptness is correct, it is clear that the LTSA and the BMSMA do not presently regulate the composition of the en bloc sale committee, and therefore the subsidiary proprietors are free to select whomever they wish to represent them in whatever manner they choose to make that selection.
(ii) The extraordinary general meetings (EOGMs) on 12 January 2006, 17 March 2006 and April 26 2006 to consider the sale were held only after the S&P Agreement had been signed, and to this extent, they were a sham and orchestrated simply to fulfill a statutory requirement that there must be an EOGM to consider the sale.
There must of course be an EOGM to consider the sale, but no time lines are mandated in the LTSA. Thus, as in this case, the EOGM to consider the sale may well take place after the collective sale agreement and/or the sale and purchase agreement with the prospective purchaser are concluded. Although this would defeat what I assume to be at least one of the purposes behind the LTSA requiring an EOGM –viz, to publicise and discuss the prospective sale before it is concluded – this cannot be considered, in the absence of legislation stating otherwise, contrary to law
.
(iii) There was no voting at any of the EOGMs
Under para 1(c) of the Schedule of the LTSA, the EOGMs are held to “consider” the sale; there is no requirement for any voting or any passing of any resolutions.
(iv) The proper disclosures of vested interest were not made. For example, the sale committee and/or the lawyers involved in the sale might have been affiliated with the [buyer]. Also, one of the sale committee members seems to have been related to the owners of certain drainage reserve land in Lincolnsvale (which was sold under a separate contract to [buyer] but this kinship was not declared to the STB.
The first instance of non-disclosure, if true, is not material. The LTSA does not forbid a member of the sale committee to possess a vested interest in the sale of the development by virtue of the fact that he owns other lots apart from his residential unit in the same development. What the LTSA does mandate is the disclosure of any links between the proposed purchaser and the subsidiary proprietors in order to ensure that the sale is at arms length:
In this regard, it is mere hypothesis on the part of the respondents that a relationship existed between [buyer] and the subsidiary proprietors, which ought to have been disclosed. It was not even explained whom among the subsidiary proprietors were related to the [buyer]. Clearly, this bare assertion is not sufficient to warrant trial.
In any event, [the buyer] would have had to make a statutory declaration of any relationship (if any) it had with the subsidiary proprietors pursuant to the application to the STB to confirm the sale. Having done so, there is no reason to doubt the veracity of the contents of the declaration given the consequences that [buyer] faces if it had made any false declarations.
More to the point, the LTSA only directs that such relationships are disclosed, it does not forbid them per se.
Put another way, even if [buyer] did share a relationship with the subsidiary proprietors, and even if this was disclosed, the STB would in all probability have still confirmed the sale.
(v) They (i.e. the respondents) were not fully informed, if at all, about the sale of Lincolnville until everything had been signed. Notices should have been sent to the post Office Box address rather than any other address since they were constantly moving between apartments.
…. The LTSA does not make it compulsory for each subsidiary proprietor to be personally informed. While personal notice is eventually required, there is nothing mandating a sale committee (so long as it is able to garner the requisite shareholding) to publicise the sale to each and every subsidiary proprietor personally., save that a notice of who has assented to the collective sale agreement must be affixed in a conspicuous part of each building in the development every eight weeks (para 1(b) of the Schedule of the LTSA)
…..personal notice is only required when an application to the STB to confirm the sale is nigh.
(vi) They (i.e. respondents) had written to enquire as to whether there were other parties who had submitted tender bids for Lincolnsvale during the EOGM on 12 January 2006 EOGM but no reply was forthcoming.
This description may not be entirely accurate, In fact, an examination of the minutes of an EOGM held on 26 April 2006 showed that there was a discussion on the number and details of other bids. Had the respondents been patient, they would have received their answer.
Moreover, the LTSA does not regulate how the sale committee should respond (or indeed if they have to respond at all) to queries and concerns of the subsidiary proprietors. Thus, while one may sympathize with the respondents’ grievances, the only recourse of the subsidiary proprietors who are dissatisfied with the sale committee’s performance appears to be that they may refuse to sign on the collective sale agreement and/or lodge an objection with the STB.
(vii) Statute requires that STB orders must be “certified” before it has binding effect in accordance with s 119 of the Building maintenance and Strata management Act 2004 (No. 47 of 2004)(“the BMSMA”). This was not done for the first and second STB Orders; and
(viii) They (i.e., the respondents) have yet to receive the full sum they are entitled to under the sale of Lincolnsvale.
… this could not be further from the truth. The bulk of the sale proceeds has either been paid into court (pursuant to s 84C(2)* of the LTSA or withheld by [solicitor] until vacant possession is delivered.
*84C(2) The president, deputy president or registrar of the Board may authorise the person appointed under subsection (1) to act for the subsidiary proprietor concerned in all aspects of the sale, including the redemption of mortgages and charges, the execution of the transfer, the receipt of moneys, the settlement of encumbrances on the lot, applying for a replacement subsidiary strata certificate of title, giving valid receipts thereof and as soon as practicable paying the remaining moneys into court under section 62 of the Trustees Act (Cap. 337).
(c) Even on the [buyer’s] best case, vacant possession should be delivered only on 15 May 2007 at the earliest, as this was the indication in the EOGM minutes; and
Even a cursory study of the relevant portion of the minutes, as quoted above, will reveal that the minutes do not indicate a firm date of May 15 2007. More importantly, the tenor of the minutes suggests that any dates indicated were only estimates.
(d) The respondents have a fee simple title to their unit in Lincolnsvale and this was inviolable and insulated them from any court proceedings, including the present application by the [buyer].
In 1998, Parliament enacted legislation to facilitate the collective sale of individual strata titles; and a conscious decision was made that unanimity was not required to sell an entire development collectively.
….the law would be amended to remove the need for unanimous consent.
These limitations on the absolute right of subsidiary proprietors of property in land to decide whom to sell to, when to sell, and to reject a sale have been imposed by Parliament’s careful weighing of the various constituent interests of the nation and individual subsidiary proprietors. The rules apply to all subsidiary proprietors regardless whether they own a fee simple or leasehold.
The applicant’s case
The applicant in this case is the buyer.
[Buyer’s] position is relatively straightforward: due process having been followed, it is contractually entitled to the delivery of vacant possession of all units in Lincolnsville. Accordingly, the court should allow its application under O 81 of the Rules and order that the respondents hand over possession of their unit immediately.
..[buyer] , being the registered owner of Lincolnsvale, holds an indefeasible title free from all unregistered encumbrances, liens, estates and interests. This is sufficient to find that the respondents are trespassers and that they must turn in vacant possession of their unit to [buyer[. It was also contended that there was no place for equity to intervene in the present context, primarily because the respondents knew of the ongoing collective sale but willfully chose not to participate or even register their protests in accordance with the procedures laid down by the relevant statutory provisions.
It follows from the foregoing analysis that the application in OS 618 2007 should be allowed for the following reasons;
(a) the burden on the respondents is to show that there are triable issues – real and substantial conflicts of fact of law – present in this case such that a summary proceeding for the possession of their unit would be inappropriate:
(b) [Buyer} is the registered owner of all the units in Lincolnsvale, and its title is subject only to a showing that the respondents case falls within one of the enumerated exceptions under ss 46(2) or 160 of the LTA. The respondents could also demonstrate that a personal equity has arisen in their favour…..
(c) On the facts before me, I am not persuaded that there was any procedural error in the conduct of the collective sale of Lincolnsvale. As such, I cannot find any triable issue in respect of whether [buyer] has been defeated by fraud, mistake or unconscionable conduct on its part.
(d) In addition, I am not convinced that the respondents are bound to hand over vacant possession of their unit only on 15 may 2007, as purportedly recorded in the minutes of the EOGMs. This argument was based on an erroneous reading of the minutes and there was no agreement to this effect. Even if such an agreement had been reached, this was clearly varied by subsequent events and conduct of the parties. Once more, there is no triable issue in respect of the date that vacant possession must be delivered, and
(e) Even as owner of a fee simple in their unit, the respondents are bound in law to convey they unit pursuant to a collective sale confirmed and approved by the STB. There is no triable issue in relation to whether the respondents’ ownership of a fee simple estate in their unit entitles them to immunity from the present claim and attendant proceedings.
Accordingly, [buyer] is entitled to recover the property known as [#01-##] ….and I order that the respondents do give possession of this property immediately. This order is made without prejudice to [buyer]‘s rights to bring further and separate action against the respondents for damages for trespass to the said property.
.
PHOENIX COURT
(High Court decision – minority case)
47 units at St Thomas Walk
Decision date: 09 Nov 2007
47 units at St Thomas Walk
Decision date: 09 Nov 2007
(Ng Swee Lang and Another v Sassoon Samuel Bernard and Others [2007] SGHC 190)
Suit Number: OS 1089 /2007
[This is a 28 page decision; much of it concerning tedious case law which I will leave out.
[I stress; this is just a layman’s reading and summarization!]
The Plaintiffs in this case were joint owners of one unit.
Their purpose of bringing this appeal was to dismiss the order of sale by the STB in respect of their development and that the costs of the proceedings and appeal were to be paid by the defendants to the plaintiffs.
The plaintiffs’ grounds for objections were as follows:-
(a) The Board erred in law in granting the collective sale ……there was no valid collective sales agreement.
The plaintiffs argued that on a plain reading of 13.1 of the CSA dated 16 April 2006, it expired upon the effluxion of 12 months after that date (“the 12 month period”).
[The plaintiffs’ lawyer] drew support for this construction from the word “any” appearing in line 3 of cl 13.
It is clear that cl 13 is unhappily drafted.
Suit Number: OS 1089 /2007
[This is a 28 page decision; much of it concerning tedious case law which I will leave out.
[I stress; this is just a layman’s reading and summarization!]
The Plaintiffs in this case were joint owners of one unit.
Their purpose of bringing this appeal was to dismiss the order of sale by the STB in respect of their development and that the costs of the proceedings and appeal were to be paid by the defendants to the plaintiffs.
The plaintiffs’ grounds for objections were as follows:-
(a) The Board erred in law in granting the collective sale ……there was no valid collective sales agreement.
The plaintiffs argued that on a plain reading of 13.1 of the CSA dated 16 April 2006, it expired upon the effluxion of 12 months after that date (“the 12 month period”).
[The plaintiffs’ lawyer] drew support for this construction from the word “any” appearing in line 3 of cl 13.
It is clear that cl 13 is unhappily drafted.
It is little wonder then that the Board rejected the plaintiffs’ insistence upon a literal construction of the word “any” as one leading to absurdity and went on to conclude that the parties to the CSA could not have intended that the CSA was to terminate while the S&P agreement was extant.
In the present case, we do not even need to go outside the four corners of the CSA to determine the context. The CSA read as a whole clearly shows the intention of the Majority to confer on the SC authority to act on their behalf to procure the sale of the Development and to take all necessary steps to bring the sale to a successful conclusion.
There is simply no room for the contention that the majority intended the CSA to terminate at the end of 12 months regardless of whether an S&P agreement had been executed. There is therefore no breach of any statutory requirement in this regard. It follows that it is unnecessary to go on to consider what the consequences would have been if there was no valid CSA. However, for completeness, I should just say that if truly there was no valid CSA; there would be no basis for any application to the Board.
(b) ……..the sale and purchase agreement had not been validly extended because (i) The CSA (from which the SC derived their authority) expired on 16 April 2007 so when the SC exercised their authority to extend the S&P Agreement, they lacked the authority to do so.
(ii) The CSA did not confer on the SC authority to extend the S&P Agreement.
The first point has already been shown to be untenable. The second point is, likewise, devoid of merit.
Under cl 2.5 of the CSA, the majority gave full authority and discretion to the SC to deal with all matters relating to the collective sale,
(c) ……..the defendants were not persons appointed by the subsidiary proprietors as their authorized representatives in connection with the application before the Board
Assuming arguendo that the first and second defendants were not authorized (which is not the case here) at the very least the third defendant was. No prejudice has been suffered by anyone even if the first and second defendants joined in the application without having been duly authorized. Applying the approach to the statutory construction discussed earlier in my judgment ([43]), I arrive at the conclusion that, given that the purpose of the legislation is to facilitate en bloc sales, Parliament would not have intended that the collective sale, consented to by all but the plaintiffs and ordered by the Board, should be nullified by this technical objection.
(d) ……..notice of application for a collective sale order was not accompanied by a valid valuation report
The fourth ground of appeal is that the valuation report was invalid because the valuer’s appraised the Development as of 6 December 2006 when (on the plaintiffs contention) they should have measured its value as at the date of the S&P Agreement.
The plaintiffs argued that in deciding whether a property was sold at its true market value, the valuation had to be done with reference to the time of sale agreement.
The court took the view that – “the duty of the mortgagee is only to take reasonable precautions. Perfection is not required. On the contrary, some latitude is allowed to a mortgagee”
…It is a matter for the mortgagee how that general duty is to be discharged in the circumstances of any given case. Such decisions inevitably involve an exercise of informed judgment on the part of the mortgagee, in respect of which there is no absolute requirements. The mortgagee will not be adjudged to be in default unless he is plainly on the wrong side of the line…The burden of proof is on the mortgagor, or other person seeking to set aside the sale, to prove breach of this duty by the mortgagee.
Second, and consistently with the absence of absolute requirements …… is there any suggestion that the mortgagee must have obtained a valuation with reference to the actual date of sale. In practice, it is certainly not uncommon for a valuation to be obtained at or around the time a decision was taken to sell the property rather than at the time of sale.
If the period of time between the dates of the decision to sell and of the sale is short, there nay be no difference in value between the two dates and indeed in many (if not most cases) this may be readily assumed.
In the present case, the Schedule does not prescribe that the valuation must be undertaken with reference to the date of S&P agreement. On the contrary, the requirement clearly is only that the valuation report should not be more than 3 months old.
The plaintiffs did not furnish any proof that the development was sold at an undervalue.
But even if I were to assume that the plaintiffs were correct, what would be the consequences of such non-compliance?
Given that the purpose of the legislation is to make it easier to achieve enbloc sales, and no prejudice to the plaintiffs having been shown, I am of the view that the legislature would not have intended that the decision of the Board be invalidated by such a footling objection.
(e) ……..there was no sale and purchase agreement which specified the proposed method of distributing the sale proceeds to all the subsidiary proprietors
Although there was no provision in the S&P Agreement specifying the proposed method of distribution of the sale proceeds, such specification was provided in the CSA, a copy of which was given to all the subsidiary proprietors and to the Board. The SPs were therefore provided with the information so as to be able to decide whether or not to object to the sale.
Considering that the purpose of the legislation is to make enbloc sales easier to achieve and taking into account compliance in effect if not in form with the requirement for specification of the method of distribution and in the absence of any real prejudice to the plaintiffs., I am of the view that Parliament would not have intended that the approval of the sale by the Board should be invalidated by reason of such a technical objection.
(f) ……the transaction was not in good faith with regard to the price
This ground and the arguments made in support of it relate to questions of fact as to which there is no right to appeal. Furthermore, the contentions raised under this ground are devoid of merit.
…the onus of satisfying the Board that the transaction was not in good faith fell on the party making the allegation.
(g) ……the transaction was not in good faith with regard to the method of distribution of sale proceeds
(Ditto to 131; the plaintiffs have no right to appeal on questions of fact.)
The principle questions arising in this appeal are:-
(a) Whether the grounds of appeal raise points of law
There was a lengthy clarification as to the distinction between a point of law and one of fact. (The defendants objected to the plaintiffs appeal on the grounds that they were not entitled to an appeal other than on a point of law.)
(b) Whether there was a failure to comply with any statutory requirement in connection with the en bloc sale or the application for the Board’s order; and
(c) If so, what is the consequence of such non-compliance?
The approach to the question as to what the consequences of non-compliance is has evolved over time. Under the traditional approach, the answer to this question depended on whether the requirement was held to be mandatory or directory. Non-observance by an authority of a mandatory requirement was fatal to the validity of the authority’s decision. However, if the requirement was held to be merely directory, non-compliance therewith would not invalidate the authority’s decision.
To conclude, the modern approach in Singapore as well as in England, Australia and Canada is to treat the question as one of statutory construction to be answered by looking at the whole scheme and purpose of the Act and by weighing the importance of the particular requirement in the context of that purpose and asking whether the legislature would have intended the consequences of a strict construction, having regard to the prejudice to private rights and the claims of the public interest (if any).
This is not to say, however, that apart from the express grounds, there cannot be any other circumstance in which a Board may decline) or even be precluded from) ordering a sale. Obviously, if lower than the requisite percentage of owners consented to the sale the Board should not approve the sale and, if it did, the court should set aside the Board’s approval. Applying the modern approach, one would quite easily arrive at the conclusion that Parliament would not have intended that less than the requisite majority of owners could drag an unwilling owner into an enbloc sale. A breach of this sort is clearly prejudicial to the rights of the minority and cannot be countenanced. However, whilst I do not wish to be categorical about it, it seems to me that the instances in which a Board’s approval of an enbloc sale is liable to be struck down for non-compliance must be few, bearing in mind the overall objective and scheme of the legislation.
At the end of the day, each objection must be examined on its own facts and the particular requirement breached set against the overall purpose of the legislation. One should then consider whether a strict construction and the invalidation of the Board’s order is what Parliament would have intended…
It follows from the foregoing that the Board must have power where an application contained any error or omission, to allow correction of the same.
.The appeal was dismissed
.
PHOENIX COURT
Court of Appeal
Minority Appeal against the High Court decision
Minority Appeal against the High Court decision
Date: 29 Feb 2007
(Ng Swee Lang and Another v Sassoon Samuel Bernard and others [2008] SGCA 7)
Full decision can be found for free in the Spreme Court website here
The court dismissed the appeal with costs.
.
Horizon Towers
Strata Titles Board
Decision date: 22 Aug 2007
(Doreen Siow and Others v lo Pui Sang/Kuah Kim Choo and Others [2007]SGSTB 3)
.
The Board rejected the sale
.
Horizon Towers
High Court
01 Oct 2007
(Siow Doreen and Others v Lo Pui Seng and Others (Horizon partners Pte Ltd, first interveners and Renghenzani Claude Augustus, second interveners) [2007] SGHC 167)
.
Horizon Towers
High Court
11 Oct 2007
OS 1269/2007
(Siow Doreen and others v Lo Pui Sang and others (Horizon Towers Partners Pte Ltd, first interveners and Reghenzani Claude Augustus and others, second interveners) [2007] SGHC 174)
Court allowed the appeal and remitted the case back to the STB for it to continue where it left off.
.
Holland Hills Mansion
High Court
Minority appeal against the decision of the STB approving the sale
Date: 13 Dec 2007
(Dynamic Investments Pte Ltd v Lee Chee Kian Silas and Others[2007] SGHC 216)
.
I call this the 'method of distribution' case. The sole minority owner owned a 642 sqm apartment and wanted the method of distribution to based on strata area only.
Full decision can be found on Lawnet for a fee.
Court of appeal against the decision of the High Court (newspaper article) here
Court of appeal against the decision of the High Court (newspaper article) here
The court dismissed the appeal with costs.
.
Mayer Mansions
Mayer Mansions
Court of Appeal
Developer's Appeal against the decision of the High Court
Date: 31 Dec 2007
(Travista Development Pte Ltd v Tan Kim Swee Augustine and Others [2007] SGCA 57)
Full decision can be found on lawnet for a fee.
The court found that the developer had not used its best endeavours to complete the sale within the time frame and so dismissed the case with costs. In other words, in this rare case, the developer lost.
.
Futura
High Court
Futura
High Court
Date: 08 Jan 2008
Minority appeal against the decision of the STB approving the sale.
(Liu Chee Ming and Others v loo-Lim Shirly [2008] SFHC 3)
Full decision can still be found for for a fee on Lawnet
The courst dismissed the appeal with costs.
.
AirView TowersHigh Court
Date: 19 March 2008
Sale Committee appeal against the decision of the STB to reject the sale.
(Tan Siew Tian and Others v Lee Khek Ern Ken[2008] SGHC 41)
Full decision can be found on lawnet for a fee
The applicants failed in their appeal against the dismissal by the STB of their application.
Appellate Court:
Decision date: 24 June 2008 (free to view for 3 months)
Minority owner Mr. Ken Lee lost and was awarded costs at all 3 levels (STB, HC and AC)
.
Regent Garden
High Court
Decision date: 26 Feb 2008
High court appeal against the dismissal of the STB of the sale to Allgreen OS No 254/2008
STB decision reversed, owners ordered to complete the sale with Allgreen.
.
Regent Garden
High Court
Decision date: 18 Sept 2008
Majority owners sue Allgreen OS 54/2008, 90/2008
Wong Lai Keen and Others v Allgreen Properties Ltd and Another Matter
[2008] SGHC 155
Majority lost.
45. "I found that there was no express provision made against the making of the additional payments to the minority owners in the [CSA or S&P]. Clause 24 of the [S&P] clearly provides that the method of apportionment set out in Schedule C pertains to the Purchase Price."
51. ".....I found there was no express or implied term in the [S&P], [CSA] and the ACT prohibiting the additional payments tp the minority owners. It follows that there was in fact no wrongful repudiation of the [S&P] and [CSA] by Allgreen to be accepted by the majority owners and thus I did not order any damages to be paid to the majority owners. It also follows that the minority owners are entitled to retain these additional payments and are under no obligation to share the additional payments they have received from Allgreen with the majority owners."
Regent Garden
High Court
Decision date: 26 Feb 2008
High court appeal against the dismissal of the STB of the sale to Allgreen OS No 254/2008
STB decision reversed, owners ordered to complete the sale with Allgreen.
.
Regent Garden
High Court
Decision date: 18 Sept 2008
Majority owners sue Allgreen OS 54/2008, 90/2008
Wong Lai Keen and Others v Allgreen Properties Ltd and Another Matter
[2008] SGHC 155
Majority lost.
45. "I found that there was no express provision made against the making of the additional payments to the minority owners in the [CSA or S&P]. Clause 24 of the [S&P] clearly provides that the method of apportionment set out in Schedule C pertains to the Purchase Price."
51. ".....I found there was no express or implied term in the [S&P], [CSA] and the ACT prohibiting the additional payments tp the minority owners. It follows that there was in fact no wrongful repudiation of the [S&P] and [CSA] by Allgreen to be accepted by the majority owners and thus I did not order any damages to be paid to the majority owners. It also follows that the minority owners are entitled to retain these additional payments and are under no obligation to share the additional payments they have received from Allgreen with the majority owners."
