(My comments and the CA summary findings article are in the next
post).
26Jan2010
Horizon Towers saga roars back to life with new lawsuit
Source: Business Times, Michelle Quah
Suit filed against some members of original sales panel
A fresh lawsuit has just been filed over the failed en bloc sale of
Horizon Towers – and a new chapter in the long-running saga is
about to begin.
It’s a suit that’s set to be a closely watched one in Singapore,
seen as a litmus test for the possible legal action that can be
brought to bear against those involved in this, as well as all
other, en bloc sales.
A group of Horizon Towers’ minority owners – those who had
originally opposed the sale of the Leonie Hill development – are
now suing some members of the original sales committee for their
handling of the en bloc sale.
According to documents filed with the High Court, these minority
owners are looking to reclaim close to $1 million in legal and
administrative costs which they say they’ve incurred during the
lengthy fight to keep their homes.
The sale of Horizon Towers – first tabled for $500 million to Hotel
Properties Ltd (HPL) in January 2007 – has been one of the most
dramatic and long-drawn- out en bloc battles in Singapore’s
history. The whole affair spanned more than two years and went back
and forth between the Strata Titles Board (STB) and the High Court
twice before finally being decided in the Court of Appeal.
The Court of Appeal ruled in April last year that the deal could
not go through because the development’s sales committee had failed
to fulfil its duty on several counts.
And now, three sets of minority owners – represented by Kannan
Ramesh of Tan Kok Quan Partnership – have cited that landmark
judgment, as a basis on which to seek reimbursement for the
hundreds of thousands they have each spent in this battle.
They have served writs on former sales committee chairman Arjun
Samtani and member Tan Kah Gee, alleging that they were ‘key
players in the process leading up to the commencement,
facilitation, management and finalisation of the collective sale
process’.
The minorities, in their claim, allege that Mr Samtani and Mr Tan
had ‘pushed for a quick sale of the property for their personal
benefit’, because both had bought additional units in Horizon
Towers, at the start of the collective sale process, and were keen
to profit from that.
Their statement of claim frequently cites the
Court of Appeal judgment which had accepted, as facts of the
case, that:
# Mr Samtani and Mr Tan had bought additional units in the
development;
# The sales committee had received an alternative higher offer of
$510 million from Vineyard Holdings, one day before HPL verbally
indicated it was willing to purchase the development for $500
million; and
# The sales committee agreed to go ahead and sell Horizon Towers to
HPL, in spite of a suggestion from one committee member that it
seek the approval of the other consenting owners because property
prices had shot up, because it was concerned that the deal would
fall through if the other owners were consulted.
Justice Rajah, in his judgment, had also ruled that HPL and the
estate’s majority owners should share the legal costs for the
second High Court hearing, as well as the Court of Appeal hearing –
and that the majority owners should bear the costs for the second
STB. He also allowed two minority objectors who did not participate
in the final appeal to be given 80 per cent of the costs incurred
in the second STB and High Court hearings.
The minority owners are now seeking compensation for the sums not
covered by Justice Rajah’s judgment. The three sets of owners are
seeking between $117,000 to $370,000 in costs – making for a total
claim of more than $800,000.
In his defence, filed with the High Court, Mr Samtani states
repeatedly that he was not alone in driving the sale process. He
said ‘each and every member of the SC (sales committee) played an
equally important role’ and that he ‘did not have any special
powers’ that could influence the committee’s decisions.
Mr Samtani also claimed that the committee ‘followed up on all
expressions of offer’ for Horizon Towers and that it received no
offer better than HPL’s at the relevant time. He said that, on the
advice of the committee’s lawyers, Drew & Napier, the committee
proceeded with the HPL offer.
As for the additional unit he purchased, Mr Samtani said that it
‘was not for investment, instead it was for use by his son’. He
claimed he had disclosed the purchase of an additional unit to
Drew, and was not advised by Drew that he had to announce it to the
other consenting owners.
Mr Tan, who is represented by TSMP Law Corporation, has requested
an extension of time to file his defence. Mr Samtani is represented
by N Sreenivasan from Straits Law Practice.
http://www.businesstimes.com.sg/mnt/html/btpre/registration/redirect.jsp?dlink=/sub/news/story/0,4574,369734,00.html?