Horizon Towers en bloc: Right call was made

Source : Today - 21 Jul 2008

More factors to consider than just higher bid price

I REFER to “Time to relook en bloc rules?” (Weekend Today, July 19-20).

On the contrary to what the letter-writer said, there are already enough en bloc rules. Without being privy to certain information, it is incorrect to infer that the Horizon Towers deal was done in bad faith and the proprietary owners did not get the highest price and were “shortchanged” as a result.

In fact, the Judge ruled that the Strata Title Board found the sales committee had made a judgment call to proceed with the offer, and the objectors did not prove the committee had acted in bad faith.

The pertinent question is whether the committee had made the right judgment call.

It was reported that a higher offer was made from a Hong Kong developer, Vineyard Holdings. But who is this developer? Does it have the financial means to complete the deal? The objectors were unable to shed any light.

Whether there was a genuine offer on the table, the objectors were also not able to tell.

The additional $10 million is not exactly compelling when apportioned over 210 condo units. It is also not an amount so huge that Horizon Partners could not counter with a higher offer.

Since Horizon Partners’ offer met the reserve price, it is logical and makes good business sense to secure a sure deal with an established buyer. On that basis, the committee made the right judgment call to seal the deal.

It is noted that the unhappiness and manoeuvre came about when it was learned that a neighbouring development was sold for more than double the price.

Our laws should not be changed just because certain factions failed to get their ways.

Landmark en bloc ruling

Source : Today - 18 Jul 2008

Judge sets out role of Strata Titles Board and which of its findings can be challenged

IT IS a situation that may apply to some en bloc deals: The selling price could have been higher if the sales committee or its agent had tried harder to secure a better deal.

In the case of Horizon Towers, a potential buyer was even standing by with a higher price than the one that was eventually chosen.

But that cannot be reason enough to disallow an en bloc sale, according to Justice Choo Han Teck as he brought a protracted saga to an end.

In a landmark decision, the judge set out the role of the Strata Titles Board as well as which of its findings can be challenged, and which ones cannot.

When it comes to price, as long as the STB finds that a purchase price is fair, which would make it a “finding of fact” in legal parlance, it would have fulfilled its duty and is entitled to approve an en bloc sale.

Minority residents at Horizon Towers who argued that the $500-million sale to Horizon Partners Private Limited (HPPL) was done in bad faith - as evidenced by Vineyard Holdings’ higher offer of $510 million :- had failed to prove their case.

Justice Choo found “no error of law” and said the High Court “cannot and will not” interfere in findings of fact made by the STB.

“Whether it was the right time to sell, or that the sales committee ought to have made a little more effort to persuade the purchaser to offer more, are not crucial matters that oblige the STB to withhold approval.

“Nor would it be the concern of the STB that some, or all, of the appellants might have consented had the Vineyard offer been made known to all of them,” he said.

If the STB were to make such enquiries, it “would never get its job done within the time limited”.

The minority owners had appealed to reverse a Dec 7 decision by STB to approve the sale. But if residents believe that the sales committee had “deliberately or negligently” not pursued a higher offer, resulting in a financial loss to them, the recourse is through litigation in the courts, said Justice Choo.

“It is necessary for this point to be made, not to encourage further litigation, but to emphasise that a subsidiary proprietor who does not wish to sell his unit can only object to the en bloc sale on such grounds as the relevant statutes allow,” he said.

And, the statutes do not allow the STB to deal with “allegations and counter-allegations against parties” as its tribunal hearing does not give such parties “the full recourse of trial to defend themselves”.

He concluded that all sides were treated fairly in this deal as “fairness requires only that the rules and regulations of each en bloc deal to be properly and duly administered”.

Another door closes on Horizon minorities

Source : Business Times - 18 Jul 2008

High Court dismisses appeal, says there’s no proof that sale was in bad faith

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.’

Appeal against Horizon Towers sale dismissed

Source : Straits Times - 18 Jul 2008

High Court ruling clears the way for $500m collective sale that was inked 1-1/2 years ago

THE drawn-out battle over the $500 million collective sale of Horizon Towers has moved one step closer to a conclusion after the High Court threw out an appeal by objecting owners.

Yesterday’s ruling means the sale of the Leonie Hill estate, first inked in January last year, can proceed - unless the objectors pursue one final possible avenue of appeal to the Court of Appeal. Some are considering this option.

The case marks a win for Mr K. Shanmugam in his final appearance as a litigator on April 30 before becoming Law Minister. He appeared before High Court Justice Choo Han Teck on behalf of the buyers, Hotel Properties (HPL) and its two partners.

HPL executive director Christopher Lim said: ‘We hope to move forward with it after 1-1/2 years of signing the agreement.’

They had inked a deal to buy the 99-year leasehold estate for less than $850 per sq ft of gross floor area, before prices shot up dramatically in last year’s bull market.

Some sellers were unhappy with what they regarded as a low price, particularly after a neighbouring development sold for more than double that price. Others, including the objectors, never wanted to sell from day one.

The objectors had argued, for example, that the sales committee had acted in bad faith in the way it handled an alternative offer of $510 million from another firm as well as the way it distributed the sale proceeds.

Justice Choo, in his judgment, dismissed the appeal saying there was no error of law to justify overturning a decision of the Strata Titles Board (STB) to allow the sale to go ahead. The STB had found that the sales committee had made a ‘judgment call’ to proceed with the offer.

The objectors did not prove the committee had acted in bad faith, he said. This was an issue of fact, not law, so it was within the purview of the STB, he said.

‘From the submissions and supporting documents, it appears that there may have been intrigue in the course of the en bloc sale from the day the SC (sales committee) was created to the proceedings before the STB,’ said Justice Choo.

‘It is questionable, however, whether the STB was the forum to resolve all questions arising from secret manoeuvres of the different factions among the subsidiary proprietors.’

The STB is not a court but a statutory tribunal, he added.

The Horizon Towers case was the first collective sale where the majority owners were slapped with a lawsuit for alleged breach of contract.

In late June, Justice Choo also dismissed an appeal by objecting owners of another large collective sale site - Gillman Heights. CapitaLand is the lead buyer of the $548 million site in Alexandra Road.

High Court dismisses Horizon Towers en bloc appeals

Source : Business Times - 17 Jul 2008

Hotel Properties Limited on Thursday said Singapore’s High Court has dismissed the appeals by the minority sellers in Horizon Towers’ en bloc sale.

The minority sellers had made the appeal in January 2008 against the Strata Titles Board’s decision delivered on December 7, 2007 which would allow the en bloc sale of the condominium to proceed.

HPL, Morgan Stanley Real Estate and Qatar Investment Authority agreed to pay $500 million for the condo located in the prime district. The deal was inked in January last year, before the property prices shot up.

But the closure of the collective sale was delayed after a group of minority owners put up an appeal saying the sale was carried out in bad faith. — BT Newsroom