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Business Times – 08 Dec 2007

STB approves en bloc sale of Horizon Towers

But it may not spell end of saga as minority owners who oppose sale may
still appeal

By MICHELLE QUAH

(SINGAPORE) Almost a year of wrangling and millions of dollars in legal fees
later, the controversial en bloc sale of Horizon Towers was eventually
approved yesterday by the Strata Titles Board (STB).

Still, the board’s verdict by no means spells the end of the long-running
saga – minority owners who oppose the sale could still appeal. That would
put the sale on hold, and could mean another round of protracted legal
disputes.

The STB’s much-awaited decision on Horizon Towers was delivered before a
packed room in the board’s Maxwell Road headquarters. Tribunal chairman
Philip Chan read out the prepared statement solemnly, before four teams of
lawyers and some 70 owners, curious onlookers and the media.

Acknowledging that this collective sale ‘lasted longer than most other en
bloc (sales)’ that have come before the STB, Mr Chan said that his tribunal
eventually decided to grant the application for the collective sale of
Horizon Towers, after considering the various merits of the case.

He said that the board had been ‘particularly guided’ by the recent decision
reached in the Phoenix Court en bloc sale and the parliamentary debates on
recent amendments to the legislation governing en bloc sales.

In the Phoenix Court case, Justice Andrew Ang threw out the sole minority
owner’s objection to the collective sale of the freehold apartment block at
St Thomas Walk. Justice Ang determined that it was important to look at the
purposive nature of the law governing collective sales, which requires that
80 per cent of owners have to agree to the sale before it can go through. As
the requisite majority was obtained in the Phoenix Court case, Justice Ang
ruled that the transaction was not prejudicial to the minority – as the law
had intended.

A similar stance was adopted by Senior Minister of State for Law, Associate
Professor Ho Peng Kee, and Deputy Prime Minister and Law Minister S
Jayakumar in the recent parliamentary debates on amendments to the Land
Titles (Strata) Bill.

Prof Ho had said requiring 100 per cent consent among owners for an en bloc
sale was untenable, as it would cause delays in any sale, acrimony and incur
costs. He said that amendments to the law would provide adequate safeguards
to protect minority interests and that the existing 80 per cent or 90 per
cent majority required – depending on the age of the development – was
satisfactory. DPM Jayakumar agreed that amendments to the Bill would provide
more safeguards and transparency for all owners.

Tribunal chairman Mr Chan also said yesterday that the minority owners who
opposed the sale had failed to prove their case that the transaction had
been carried out in bad faith. The minorities had alleged, among other
things, that the sales committee and its sales agent had not worked hard
enough to get the best price possible for the development.

The tribunal will issue detailed grounds for its decision at a later date.
It ruled yesterday that no order would be made for costs, meaning that the
minority would not have to bear any portion of the costs of the proceedings.

The gallery’s reaction to the tribunal’s decision was muted – surprising for
a case that has caused much emotional upheaval for its owners. Owners
received the verdict quietly and shuffled out of the room.

The minority owners, who feel they will lose their homes with this sale,
were accepting of the verdict. ‘The decision was not unexpected. We have
done and will do what is principally correct,’ said Jasmine Tan, who
declined to comment at this point on whether she would appeal against the
STB’s decision.

And, expectedly, the majority owners – the over-80 per cent who agreed to
the collective sale – were relieved with the STB’s decision. They face the
threat of being sued for up to $1 billion by the buyers, Hotel Properties
(HPL) and its partners, if the deal falls through.

Said a group of some 80 majority owners: ‘We are happy with the decision and
very pleased that the en bloc is going through. We look forward to the
buyers confirming that they will proceed with the deal and withdrawing the
legal suits they have started against some owners.’

HPL and its partners, for their part, have expressed their happiness with
STB’s decision – but have held back on any decision on the lawsuit, pending
the actual completion of the sale.

‘We are pleased that the STB has allowed the collective sale and rejected
the objectors’ case, including their allegations of bad faith,’ said HPL
executive director Christopher Lim.

The buyers’ lawyer, Senior Counsel K Shanmugam of Allen & Gledhill, added:
‘Our client entered into the transaction in good faith and paid what was
then a record price for the property. The application should therefore have
proceeded smoothly, but the market changed. As a result, the case went
through a number of critical junctures. We are, however, happy that the end
result is that the tribunal has ruled that the sale should now go ahead.’