The Court of Appeal decision is out. The collective sale of the ex-HUDC estate ShunfuVille will proceed.
The decision can be found
here
This decision will have ramifications for all collective sales in progress. Our SC/MA will be dancing in the aisles with this decision. The Minority Objector focused on points that were plainly unwinnable, but I am going to focus on one issue that was not even raised (just something I latched on to in the reading).. RPs and how two can exist at the same time .
We have always been told that signing the CSA was a 'big step', that we would be legally binding ourselves hand & foot to a legal document until the very end. Sure, there was a brief 5 day 'cooling off' window in which we could change our minds, but after that, we were well and truly hooked. Voluntarily, I might add.
We all believed there could only be ONE RP, and to make sure we were all signing on the same page, we were given the added safety measure of having the signing done in the presence of a lawyer (rather than some smooth-talking marketing agent ambushing old people in their living rooms).
It is common practice that if the RP were raised in the course of the collective sale attempt, then those who had signed for the lower RP would rise with the tide and be party to the new, higher RP along with the new signatories.
Along comes ShunfuVille and the notion of ONE RP goes out the window with the crystallisation of Supplemental Agreements and their vastly different RPs that operate in a kind of legal-limbo.
I am not legally trained, but I do believe a person cannot legally sign for two different RPs on 2 different documents and have them
both operational
at the same time. One has to give way to the other - the same way you cannot legally be married to 2 different people at the same time.
So, how do you keep one RP alive and legally kicking whilst collecting fresh signatures for a lower RP?
Simple - throw out the idea that your signature is legal the moment you put ink to paper - and instead make a provision in the CSA that says it is only binding
when 80% is reached for that particular RP.
So, there are 2 kinds of RPS -
one that locks you in at the start and
one that locks you in at the 80%.
This rule-bending allows for two RPs to co-exist side-by-side until the lower one has the muscle to take over the reins of the 80%.
The ShunfuVille CSA
'had a clause about a Supplemental Joint Agreement taking effect only if the consent of subsidiary
proprietors representing at least 80% of the total share value and total strata
area of the Property was obtained.' (COA 24) '
Check out out Tampines Court CSA.... Clause 1.4(c)
So, this is common practice, so you say, all Collectives Sales have this provision for a supplementary agreement in their CSA.
True, but now we have a case study - a successful template - and one which will be applied to many collective sales from now on. TC included.
One benefit (or drawback) is that the original 80% mandate remains in force for 12 months from date of first signature and it can be used to hold as many tenders that fit in the time frame. Shunfu used it for 2 tenders at the highest RP. The 2nd open tender was used as a bridge to the 10 weeks following an open tender provided for in the LTSA to find a private buyer The buyer had already been found, they just needed the legal framework and an extension of time to garner the necessary signatures to get the deal done.
All very clever, I must say, but there's a deviousness underneath it all that really irks me.
At the end of the day, 80% knowingly signed that supplemental joint agreement, they were
fresh signatures, and I for one, would not have attempted to take this case to High Court, never mind the COA. This template is an 'enbloc winner' from now on.
