HORIZON TOWERS

It seems like the Horizon Towers saga was ticking away in the background all this while.

A new judgement just out ; 

Five plaintiffs (objecting minority owners) seeking equitable compensation against two defendants (sale com. members) for breaches of fiduciary duties. 

In other words they want their legal costs fully recovered... costs which run into the hundreds of thousands.

I haven't read it yet - just skipped to the end where it said the judge dismissed the plaintiff claims (ie they lost).

Look for it on the Supreme Court website under recent judgements:

Then Khek Koon and another v Arjun Permanand Samtani and another and other suits - [2013] SGHC 213

or here

Gilstead Court New Row

Marketing Agents BEWARE

 I believe head(s) rolled at the HSR agency; careers ruined, people sacked.  Complaints were made to the Council of Estate Agents (CEA).

The paper failed to point out that the extra payment made to the 6 minority in the Regent Garden case was not about reaching the 80% consensus level, but  payment to withdraw their objection at the STB, thus clearing the way for the sale to go through.

Mind you, extra payments should not be encouraged across the board. The former Supreme Court judge is quite right in saying "It is necessary to outlaw such behavior as a form of corruption, with possible criminal, as well as civil sanctions". However,  it is also ironic that this same former Supreme Court judge is enmeshed in his own en bloc debacle (Gilstead Court) whereby the CSA was fashioned in a way which effectively penalized the minority for not signing the CSA.  Thereby ensuring an unfair distribution of proceeds - the majority get more, the minority less.  It is actually worse than it sounds; taking money from the minority and divvying it up amongst the majority...  read the media report here

THOMSON VIEW

Ngui Gek Lian Philomene and others v Chan Kiat and others - (HSR International Realtors Pte Ltd, intervener)
5 September, 2013 12:00 AM

The  issues:

1. Did the CSC fail in its duties?
2. Do minority owners have the ability to raise objections that had not been previously submitted to the STB?
3. Do offers of secret payments made by the marketing agent to some SPs amount to bad faith?
4. ... not so important

Judgement

1. No

In my opinion, the judge was very lenient on the CSC.  They seemed to be harried and pushed along by the marketing agent and buyer. They didn't act like prudent sellers and agreed to new terms that were 'materially less favourable and not in line with market practice'. Their failure to extend the public tender 'was a breach of their duty to obtain the best price for the Development'. 

And still, the judge did not lay any blame at their feet.

2. YES

Ah, this is the most important issue moving forward. This clause just had to be challenged:-

LTSA 84A(4 ) Where a section 84A stop order is issued under subsection (6A)(b) in respect of an application to a Board under subsection (1) for an order for the sale of all the lots and common property in a strata title plan, and an application is then made to the High Court under subsection (1) for an order for the same sale of all the lots and common property in the same strata title plan, any person referred to in subsection (4)(a) or (b) who filed an objection to the Board (but no others) may re-file his objection to the sale, stating the same grounds of objection, to the High Court in the manner and within the time delimited by the Rules of Court.

'43 Nevertheless, my view is that the Section does not preclude the Defendants from raising the issue of the Incentive Payments. While I accept that the intent behind the Section is to avoid new grounds of objection from delaying the collective sale process, this intention does not extend to shutting out legitimate grounds of objection that could not have been known to the objectors at that point in time.

'45 Accordingly, I hold that the Section does not prevent dissenting subsidiary proprietors from raising a new ground of objection at the High Court if, through no fault of theirs, it became known to them only after they had filed objections to the STB. This interpretation of the Section ensures that dissenting subsidiary proprietors are not unfairly barred on a technicality from raising a new objection.'

So, that's a kick in the behind to those who crafted the Law! They thought they could tie the minority's hands by disallowing the fruits of  'discovery' at the High Court.   But this wise judge said No; the dirty deeds that are hidden at the STB level (and cannot be ferreted out) can indeed be uncovered and brought to light at the High Court.  Amen to that.

3. YES

52.    ...   'HSR  breached its duty of transparency by failing to disclose the Incentive Payments to the CSC or the other SPs.'

54 ........ 'HSR had the prospect of earning commission only if the 80% consent threshold was achieved. In order to achieve that 80% consent threshold, HSR promised the Incentive Payments to certain SPs who, but for the Incentive Payments, would not have signed the CSA. In so doing, HSR in effect promised to reduce its commission. The reduction of its commission would result in the net sale proceeds being increased pro tanto. However, the benefit of this reduction would not be shared by all SPs; the reduction would benefit only the few SPs who were promised the Incentive Payments. The ultimate outcome is that, without the consent of all the SPs who signed the CSA, the method of distributing the sale proceeds set out in the CSA would be surreptitiously departed from. Hence, there was bad faith in the transaction involving the method of distribution of the sale proceeds.'

Gilstead Court Row

'Sure fail' at the High Court! An unfair distribution of sales proceeds!

Blatantly treating the minority owners unfairly? Ignoring their obligation for 'even-handedness' when dealing with minority? Minority owners who are only exercising their right not to sign the CSA? What was this former supreme court judge thinking???

Only options for the SC now are:-

a) remove the penalty clauses on the minority owners. 

b)  pay the minority owners to withdraw their objection at the STB (which is perfectly legal) , but......

Looking at their website and in particular, this page, it looks like they have tied their hands at "willing owners' making ex-gratia payments

Ditto for the purchaser making ex-gratia payments ..

From the Tender Terms:-

Regent Garden .... an estate where the purchaser made ex-gratia payments to the minority to withdraw their objections - and it was deemed kosher by the High Court. 

Thomson View Condo

 Thomson View sale hits a roadblock


This case is presently being heard at the High Court .....

Eunosville first attempt at Enbloc Sale

Today article here

Eunosville seeks $688m in collective bid

Gilstead Court Tender

HARBOUR VIEW GARDENS

This collective sale failed at the High court

... sneaky Compensation/Contribution Agreement paying off 1 owner $200k to reach the 80% was judged BAD FAITH  - and the sale was thrown out .

The Contribution Agreement was in fact two agreements - one agreement between the majority owners and the Marketing agent  and the other agreement between the Marketing agent and the lucky owner. The CSC refused to disclose either agreement to the minority.

Interesting reading - a little wooly perhaps, but interesting all the same.

You can find it for free at the Supreme Court website.. under Recent Judgements

 09 April 2013

https://www.dropbox.com/s/09zshgj78vtrcv4/Harbour%20View%20Gardens.pdf?dl=0

No-go for Harbour View Gardens sale

A PROPOSED $33 million collective sale of Harbour View Gardens in Pasir Panjang Road to Roxy-Pacific Holdings has fallen through.
A High Court appeal by the consenting owners at the project was dismissed yesterday.
The Court of Appeal upheld a ruling by High Court Justice Belinda Ang in April.
She had refused to allow the sale as the Harbour View Gardens collective sales committee "had not acted in good faith" while its marketing agent's conduct was "commercially unacceptable".
The exact reasons for the decision are unknown as the written judgement has not been released yet.
The appeal was mounted by the majority owners, represented by Drew & Napier senior counsel Hri Kumar, who could not be reached for comment.
The Straits Times understands that the appeal was heard yesterday morning and dismissed before noon.
Rodyk & Davidson real estate lawyer Lee Liat Yeang, who was not involved in the en bloc sale or court case, said yesterday that the dismissal of the appeal "is seen as a wet blanket on an already tepid collective sales market".
The freehold development, consisting of 14 three-storey walk-up apartments, was sold to RH West Coast in July last year for $33 million, subject to clearance for the sale. The marketing agent was Colliers International (Singapore).
RH West Coast is a unit of property developer Roxy-Pacific Holdings, which declined to comment yesterday, citing a pending Singapore Exchange announcement on the matter.
The Harbour View Gardens court dispute centred on whether its en bloc sale could go through.
One central issue was a $200,000 inducement that the collective sales committee and Colliers had offered to couple Han Min Juan and Jee Ming Tu to get them to agree to sell their flat.
Mr Han was a member of the committee. Their consent enabled it to reach the requisite 80 per cent majority threshold. However, a few minority owners objected to the sale, saying that the inducement was not paid in good faith.
They also said that the committee had not acted "even-handedly" as the incentive was offered to only one opposing minority owner and not to others.
August 16, 2013 

End of the road for enbloc

From the Minutes of the SC Meeting held on 11 Jan 2013:

As of 11 Jan 2013, 36% of the SPs had signed the CSA. The enbloc exercise has lapsed as it did not attain 80% consensus despite best efforts by SC. The meeting was convened to decide on the procedure on the refund of the en bloc fund.

(details on procedure can be found on the Notice Board)

The Sales Committee recorded a note of thanks to the SPs who have extended their support to the SC for the past 1 year.

Cooling measures

Additional measures to cool the property market

4-weekly Statutory Notices

Shunfu individual unit sells for record $1.33m

SC Letter / Notice of meeting

SC Meeting; 11 Nov 2012

The Final Push

You can never sound the death knell until all options have been exhausted. There has been a fresh injection of hope with an increased RP. A RP that is potentially attractive to about 50-55% of the owners in the estate -  but that is just my opinion. The SC hopes it is enough for 80%.  

Two more signing sessions are penciled in for Nov, and a letter from the SC Chairman on the Notice Board   (The letter has since been removed).

In the News

• Supply numbers do not tell the whole story

•  More Executive units selling for over $1 million
•  MAS restrict loan tenure on residential properties
•  HDB resale oprices rise 2% to record high in 3rd Q
• eCo sees bustling sale at launch
• Green Lodge sold en bloc for $191.888m

SC Meeting : 18 Oct 2012

Minutes can be found on the Official Tampines Court Sales Committee  Blog

Lakeview Estate Development Info

CPF changes

Changes in how CPF is refunded into your account when you sell your property:-

The CPF (Amendment) Bill 2012 Second Reading Speech by Acting Minister for Manpower Tan Chuan-Jin

CPF News-Release 10 Sept 2012

REFINEMENTS TO THE CPF HOUSING REFUND POLICY

Sir, I will now move on to the next amendment that will give effect to refinements that we are making to the CPF housing refund policy. CPF members may use savings in their CPF Ordinary Account (OA) to purchase a property. When members sell off their property, we require them to refund the CPF savings that they have used for their property.

Current housing refund policy

Members who sell their property before age 55 are required to refund into their CPF account the principal amount that they had withdrawn for the property, including the prevailing OA interest that would have accrued on this amount, or P+I in short. This refund aims to restore the member to the position as if he had not withdrawn his CPF savings for the property. Members may still use the refunded amounts towards the purchase of their next property.

The current housing refund requirements change when a member is past age 55. At age 55, a member is required to set aside the Minimum Sum (MS) from his existing CPF balances, and he may withdraw his CPF savings in excess of the MS after having also set aside the required amount in his Medisave Account for his healthcare needs. So when a member sells his property after age 55, only the amount needed to bring the member up to his MS must be refunded, since amounts above the MS can be withdrawn anyway. In other words, for a member who sells his property after age 55, he will refund his MS shortfall or his P+I, whichever is lower. Remaining proceeds from the sale of his property is received in cash. While the current refund rules for members over 55 avoid collection of housing refunds in excess of MS, there may be certain scenarios involving more than one co-owner, where the refunds required of the co-owners may not match the amount of CPF each co-owner used to pay for that property. When this arises, co-owners can decide to distribute the cash proceeds among themselves such that the total of the cash proceeds and CPF refunds for each co-owner matches the amount that each co-owner had contributed towards payment of the property. However, where the co-owners are no longer on good terms, the distribution of cash proceeds becomes more contentious and the co-owners may not always be willing to consider the amount that the other party has contributed towards the property. In cases where the property is sold at a loss, there may not be any cash proceeds for distribution. This is when the current housing refund requirements may create some unhappiness among members. Some of the Members of this House would have received appeals of such nature.

New housing refund policy

We are therefore refining the housing refund policy to address this issue. We will now require members aged 55 and above to refund their P+I. This means the same refund rule will apply to all members regardless of their age. This refinement will ensure co-owners receive CPF refunds that are commensurate with their usage of CPF savings for the property. Sections 21, 21A and 21B of the Act will be amended to give effect to the new housing refund policy.

Where the P+I refund exceeds the MS shortfall for members aged 55 and above, they need not worry that the new refund rule makes them retain in their CPF a higher amount than what is necessary. The refunded amount will first be used to set aside their cohort Minimum Sum in their RA and the required Medisave amount in their MA, and the excess can be withdrawn. This is no different from the existing requirement that applies to all members past age 55 who wish to withdraw their OA and SA savings in excess of the MS.

Under the new housing refund rule, for members aged 55 and above, any remaining housing refunds after setting aside the required amounts (in the RA and MA) will be automatically disbursed to the member in cash, unless he chooses to retain it in his CPF accounts. Changes will be made to section 15 of the Act to give effect to this policy. The majority of members can expect to receive the disbursed funds within one to two weeks of the crediting of the housing refunds into their CPF accounts.

Sir, the new housing refund policy will ensure that the distribution of proceeds from the sale of property reflects the CPF usage among the co-owners, while at the same time not require older members to retain in their CPF more refunds than are necessary. The new housing refund policy will take effect on 1 January 2013. My Question: With the new rules, does the Waterfront View High Court ruling in 2007 still hold? Just asking