Looks like QXP might be right.
Horizon Towers sale off – for good
Teo Xuanwei
[email protected]
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IT HAS been one of the most keenly-followed en bloc sale disputes — in part because the history of the Horizon Towers’ saga is “complex and convoluted”, and also because it was the first instance where majority owners were taken to court for alleged breach of contract.
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And in the final act of the protracted courtroom drama played out in the public eye for the last two years, the Court of Appeal yesterday reversed earlier decisions handed out by the Strata Titles Board and the High Court by killing the condominium’s $500-million collective sale to Hotel Properties (HPL) for good.
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The reason: The Appellate Court ruled that the sales committee had not handled the Horizon Towers’ sale in a proper manner. In a landmark ruling, the court, for the first time, also spelt out the exact duties and responsibilities of sales committees handling en bloc transactions — to ensure that the interests of minority owners are protected. The court stated that sales committees have to “hold an even hand between the interests” of both majority and minority owners.
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Sales committees have a duty to avoid conflicts of interest, fully disclose all relevant information, and explore all alternatives to get the best price, the court said.
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As a class, minority owners “have to be adequately protected from bullying and underhand tactics as well as any potentially collusive or improper conduct on the part of any of the majority owners,” Judge of Appeal V K Rajah said in a written judgment.
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And in the case involving the 210-unit Leonie Hill estate, the sales committee had failed to do so, said Justice Rajah.
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Many of Horizon Towers’ majority owners began having second thoughts about the en bloc sale when the property market started climbing soon after they agreed to sell for around $850 per sq ft of gross floor area for the 99-year leasehold property in January 2007 — especially as a neighbouring property had successfully increased its reserve price.
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But the Horizon Towers’ sales committee failed to follow up on a higher bid of $510 million by a party called Vineyard and did not get advice from independent property experts.
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Not only was it unnecessarily hasty in concluding the deal with HPL, the sales committee also did not consult or update the majority owners concerning the sale despite a surge in the property market, the court said.
.
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STB needs to be more ‘proactive’
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The court also called for the Strata Titles Board (STB) — which reviews applications for collective sales when objections are filed — to play a “proactive inquisitorial role”.
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Instead of considering only the evidence presented by the opposing parties, the court said the STB has to “seek out” the facts whenever there is reason to believe the sales committee has not fully disclosed information.
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Several lawyers told Today the court ruling is “useful” in further clarifying for parties what constitutes good faith, coming on the back of legislative changes in 2007 requiring greater transparency from sales committees.
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Still, it does not necessarily mean that there would be fewer cases of legal wranglings arising out of en bloc sales. “The decision only means the courts would stand more guided on the extent of the legal burden of proof in respect of acting in good faith,” said Colin Ng & Partners’ lawyer B Ganesh.
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Harry Elias Partnership’s Philip Fong, who acted for the appellants — Horizon Towers’ four minority owners — added: “The judgment puts a higher onus of fidelity on the sales committees, telling them exactly what their duties are. But it does not reduce the grounds of objections.”
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In a filing to the Singapore Exchange, HPL said the Court of Appeal’s decision was final. “As a consequence ... the proposed acquisition of the property will not proceed.”
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A civil action against the Horizon Towers’ second sales committee — which took over after the first sales committee resigned — initiated by HPL is still pending. The developer is seeking damages for breach of contract.
Teo Xuanwei
Horizon Towers sale off – for good
Teo Xuanwei
[email protected]
.
IT HAS been one of the most keenly-followed en bloc sale disputes — in part because the history of the Horizon Towers’ saga is “complex and convoluted”, and also because it was the first instance where majority owners were taken to court for alleged breach of contract.
.
And in the final act of the protracted courtroom drama played out in the public eye for the last two years, the Court of Appeal yesterday reversed earlier decisions handed out by the Strata Titles Board and the High Court by killing the condominium’s $500-million collective sale to Hotel Properties (HPL) for good.
.
The reason: The Appellate Court ruled that the sales committee had not handled the Horizon Towers’ sale in a proper manner. In a landmark ruling, the court, for the first time, also spelt out the exact duties and responsibilities of sales committees handling en bloc transactions — to ensure that the interests of minority owners are protected. The court stated that sales committees have to “hold an even hand between the interests” of both majority and minority owners.
.
Sales committees have a duty to avoid conflicts of interest, fully disclose all relevant information, and explore all alternatives to get the best price, the court said.
.
As a class, minority owners “have to be adequately protected from bullying and underhand tactics as well as any potentially collusive or improper conduct on the part of any of the majority owners,” Judge of Appeal V K Rajah said in a written judgment.
.
And in the case involving the 210-unit Leonie Hill estate, the sales committee had failed to do so, said Justice Rajah.
.
Many of Horizon Towers’ majority owners began having second thoughts about the en bloc sale when the property market started climbing soon after they agreed to sell for around $850 per sq ft of gross floor area for the 99-year leasehold property in January 2007 — especially as a neighbouring property had successfully increased its reserve price.
.
But the Horizon Towers’ sales committee failed to follow up on a higher bid of $510 million by a party called Vineyard and did not get advice from independent property experts.
.
Not only was it unnecessarily hasty in concluding the deal with HPL, the sales committee also did not consult or update the majority owners concerning the sale despite a surge in the property market, the court said.
.
.
STB needs to be more ‘proactive’
.
The court also called for the Strata Titles Board (STB) — which reviews applications for collective sales when objections are filed — to play a “proactive inquisitorial role”.
.
Instead of considering only the evidence presented by the opposing parties, the court said the STB has to “seek out” the facts whenever there is reason to believe the sales committee has not fully disclosed information.
.
Several lawyers told Today the court ruling is “useful” in further clarifying for parties what constitutes good faith, coming on the back of legislative changes in 2007 requiring greater transparency from sales committees.
.
Still, it does not necessarily mean that there would be fewer cases of legal wranglings arising out of en bloc sales. “The decision only means the courts would stand more guided on the extent of the legal burden of proof in respect of acting in good faith,” said Colin Ng & Partners’ lawyer B Ganesh.
.
Harry Elias Partnership’s Philip Fong, who acted for the appellants — Horizon Towers’ four minority owners — added: “The judgment puts a higher onus of fidelity on the sales committees, telling them exactly what their duties are. But it does not reduce the grounds of objections.”
.
In a filing to the Singapore Exchange, HPL said the Court of Appeal’s decision was final. “As a consequence ... the proposed acquisition of the property will not proceed.”
.
A civil action against the Horizon Towers’ second sales committee — which took over after the first sales committee resigned — initiated by HPL is still pending. The developer is seeking damages for breach of contract.
Teo Xuanwei
