Another door closes on Horizon minorities

July 18, 2008
Another door closes on Horizon minorities
High Court dismisses appeal, says there's no proof that sale was in
bad faith
By MICHELLE QUAH

(SINGAPORE) Minority owners seeking to stop the en bloc sale of
Horizon Towers have been defeated yet again. Singapore's High Court
yesterday dismissed their appeal, on the grounds that they failed to
prove the sale was done in bad faith and prejudiced their rights.

This decision, coming on the heels of the High Court's dismissal of
an appeal against the sale of Gillman Heights Condominium, marks the
second major defeat for minorities here.

The minority owners of Horizon Towers whom BT spoke to said they were
still considering their options at this time. But they will soon be
meeting to decide if they will take the matter to the Court of
Appeal, or start a civil suit to claim for any financial loss - which
will be their final recourse.

If they decide not to appeal further, the $500 million sale of the
Leonie Hill development to a consortium led by Hotel Properties Ltd
(HPL) will go through. It will also mean that the closely watched
saga - which has been playing out in the public eye for more than a
year - will finally come to a close.

HPL group executive director Chris Lim told BT: 'We are pleased with
the High Court judgment and hope to move forward with the deal as
it's been one-and-a-half years since the sale agreement was inked.'

Justice Choo Han Teck, who presided over the minorities' appeal, said
in his judgment yesterday that the minorities had failed to show that
the Strata Titles Board (STB) erred in law in its decision to approve
the en bloc sale in December.

The High Court only has powers to consider questions of law on appeal.

The minorities had argued that the sale had been conducted in bad
faith. They claimed a better sale price might have been achieved if
the sales committee had pursued a second offer from a party called
Vineyard, which had reportedly offered $510 million. The minorities
claimed the sales committee did not pursue the offer - and even
concealed it - because the development's sales agent, First Tree, was
getting a higher sales commission from the HPL consortium.

But Justice Choo said the minorities failed to prove bad faith, as
their argument was essentially concerned with whether the eventual
sale price was fair - which is 'a question of fact' for the STB to
decide, and not a question of law for the court to deliberate on.

Justice Choo said, if the minorities feel the sales committee had
deliberately or negligently not pursued the Vineyard offer, they can
pursue a civil claim for the purported financial loss.

He also ruled that the minorities had failed to prove there was a
lack of good faith in the way the sales proceeds were to be
distributed amongst the various owners. The minorities argued the
apportionment method used was unfair because it resulted in penthouse
owners getting about 16 per cent less on a per- square-metre basis,
compared to non-penthouse owners.

Justice Choo said there can't be a lack of good faith in the
selection of the apportionment method just because it was the only
one considered or it led to some owners getting more than others. He
noted that the STB had considered the evidence of several experts and
it seemed no one method would satisfy everyone.

He added that, even if the STB had deemed the chosen method
inappropriate, it would be an error of fact and not an error of law.

He also dismissed the minorities' arguments that the en bloc sale was
unconstitutional, and that the sale agreement had lapsed by the time
the STB approved the sale.

Justice Choo also noted the 'intrigue' that has surrounded the en
bloc sale of Horizon Towers. There have been numerous accusations on
the conduct of the various parties involved - ranging from whether
the sales committee should have worked harder to get a better sale
price, to whether the minorities were only against the sale because
the price was too low.

'The STB was not bound to examine the rights and preferences of each
individual subsidiary proprietor and it was not the forum to inquire
into the conduct of individual members of the SC (sales committee),
or even the SC as a whole,' Justice Choo said. 'If the STB were to
embark on the kind of inquiry and make the findings the appellants
say it ought to have done, the STB would never get its job done
within the time limited.'