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Business Times - 02 Oct 2007

Horizon Towers owners, buyers argue against STB's decision

Court allows buyers, 13 owners to intervene in appeal

By MICHELLE QUAH

(SINGAPORE) The majority owners and the buyers of Horizon Towers joined forces for the first time in months yesterday, to argue against the dismissal by the Strata Titles Board (STB) of the development's collective sale application.

This was after Supreme Court Judge Choo Han Teck allowed the buyers - HPL and its partners - and a group of 13 majority owners to intervene in yesterday's appeal.

The appeal at the High Court was originally meant to involve only the majority owners, who consented to the en bloc sale of Horizon Towers in February, and the minority owners, who oppose the sale. But HPL and the group of 13 who wanted separate representation applied to participate in the proceedings, on the grounds that they had a stake in its outcome.

Judge Choo heard their submissions and ruled yesterday morning that it was 'just and convenient' to allow both parties in. He also said that 'prudence requires that HPPL (HPL and its partners) be heard', as the outcome of this appeal would have a bearing on their allegation that the majority owners breached the sales contract.

HPL and its partners - Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - have sued the majority sellers for up to $1 billion in damages, alleging that the owners failed to do everything in their power to effect the collective sale.

This came after the STB in August dismissed the majority owners' application for a collective sale order, on the grounds that it was defective because it was missing three pages.

The STB said the statutory declaration provided by the sales committee was 'false' because it stated that the collective sale agreement was appended when, in fact, three pages - containing the signatures of three consenting owners - were missing from it. The board also said that it had no power to amend the application and threw it out, without considering its merits.

HPL's suit against the majority owners has been stayed, pending the outcome of this appeal.

Yesterday, majority owners and the buyers alike sought to convince the High Court that the STB had erred in its decision to throw out the application. They argued that there were no material instances of non-compliance in the application, only a minor technical one - which the STB has the power to amend.

Senior Counsel Chelva Rajah of Tan Rajah & Cheah, who represented the majority owners, and Senior Counsel Andre Yeap of Rajah & Tann, who represented the group of 13 owners, both argued that the missing pages had been a mere oversight.

'It was only due to a clerical error that the pages weren't included ... and these missing pages were brought to the STB's attention during the course of the hearing,' Mr Rajah said.

Mr Yeap also argued that the missing pages had no material effect on the application. It was a point Mr Rajah agreed with - he pointed out that, even without these three signatures, the application would still have the signatures of more than 80 per cent of the owners. According to collective sale rules for older developments, the owners of more than 80 per cent of the units must agree to the sale.

Both also said that STB had the right - under Rule 12 of the Building Maintenance and Strata Management Regulations - to amend any application submitted to the board, and could have done so instead of dismissing it.

Senior Counsel K Shanmugam of Allen & Gledhill, representing HPL and its partners, echoed the spirit - if not the tone - of the majority owners' submissions.

Mr Shanmugam said his goal was also to convince the High Court that STB had erred in throwing out the collective sale application, without considering its merits. But he warned that there were competing interests among the majority owners.

He cited examples of how some of the majority owners had tried to scupper the en bloc sale, after neighbouring developments started to fetch much higher prices. He related instances of how the sales committee had been equivocal about setting STB hearing dates and how anonymous flyers had circulated around the development, encouraging sellers to renege on the deal.

'So I want to be joined to this action (this appeal) to ensure our interests are safeguarded,' he said.

The hearing continues today, when the minority owners will present their objections.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.