Source : Straits Times – 15 Jul 2009
Right to interest not dependent on actual outcome of sale: Court
ALL 210 owners at the Horizon Towers condominium will get a share of a $1.88 million sum which is the bank interest earned on a $50 million deposit from the estate’s failed collective sale.
The Court of Appeal decided that 33 of the estate’s minority owners, who did not agree to the collective sale in 2007, will also be eligible for a slice of the $1.88 million pie. This will work out to each owner getting about $8,900, depending on the size of the unit.
The en bloc sales committee of the estate had decided that the $1.88 million would be divided only among those who voted for the sale.
But the Court of Appeal, which disallowed the en bloc sale in April, said the sales committee was not entitled to split the money only among the majority.
The $1.88 million sum is the interest earned on a $50 million deposit which property developer HPL, which wanted to buy the estate for $500 million, placed after an agreement with the estate’s sales committee in 2007.
Judge of Appeal V.K. Rajah, writing the court’s decision, said the $50 million deposit was meant for all unit owners at Horizon Towers.
Justice Rajah said that in the case of a successful sale, all owners, not just those who agreed to the sale, would get part of the interest earned as part of the contractual arrangements. In an aborted sale, the same should also apply, he said.
Justice Rajah added that whether the collective sale failed in the end or not was ‘irrelevant’, as the right to the interest is an accrued right and not dependent on the actual outcome of the sales and purchase agreement.
He was also disappointed with lawyers from Drew & Napier who had ‘confused beneficial rights with contractual rights’ in advising the sales committee to keep the interest for the majority owners.
Industry players said this was the first time the country’s highest court has ruled on how such interest monies should be dealt with in aborted collective sales.
Horizon Towers’ collective sale was one of the longest disputed collective sale sagas in Singapore. The whole affair spanned more than two years and went back and forth between the Strata Titles Board (STB) and the High Court a couple of times before finally being decided in the Court of Appeal.
In the judgment published on Monday, the Court of Appeal also ruled that both HPL and the estate’s majority owners should equally share the legal costs for the second High Court hearing, as well as the Court of Appeal hearing. The costs for the second STB hearings were to be borne solely by the majority owners.
The Court of Appeal also made the unusual move of allowing two minority objectors who did not participate in the final appeal to be given 80 percent of the costs incurred in the second STB and High Court hearings.
Justice Rajah said the court was mindful that the significant costs incurred ‘at every step of these bitterly fought, convoluted and labyrinthine proceedings’ would have led some to forgo the appeal. ‘We cannot lose sight of the fact that the non-appealing parties together have (with the appellants) been literally driven from pillar to post in their arduous efforts to protect their homes.’
Although there were 33 objectors to the sale at the start, 13 pursued the case in court, and five continued the matter all the way to the appeal, said one of the final objectors, Mr Hendra Gunawan, 53.
‘We are happy the court has allowed us to protect our homes by giving this judgment,’ said the investor.
But he said he was a bit disappointed because he was hoping to get more costs awarded to them.
He estimated that the sum he would finally get would not exceed more than 30 per cent of the amount he personally spent on the case from the start, although he did not give the exact amount spent.
Majority owner Mamata Kapildave Dave, 40, said she accepted the costs outcome as fair and was waiting for the sums to be worked out.
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