BLOCKED HORIZON TOWERS SALE

Sep 19, 2012
 
Minority owners sue over costs

They are claiming $585k from first sales committee's chairman, member
 
By esther teo property reporter
 

MINORITY owners who won a landmark court ruling to overturn the collective sale of Horizon Towers returned to the High Court this week as fallout from the bitter dispute continues.

They are suing Mr Arjun Samtani, the chairman of the first sales committee, and committee member Tan Kah Gee over costs incurred while trying to block the collective sale.

Both men were named as the prime movers of the sale by the Court of Appeal in its 2009 ruling to disallow the transaction of the Leonie Hill Road property.

The three sets of minority owners, comprising five plaintiffs in all, are claiming a total of $585,000 in costs and expenses incurred in a series of hearings that eventually killed the sale. They were earlier awarded $330,000 by the Court of Appeal in a separate action after the deal was quashed.

In the hearing, which started on Monday, Mr Samtani and Mr Tan contend that the claim is unsustainable since costs were already determined by the Court of Appeal. At that 2009 hearing, the plaintiffs did not seek any costs orders personally against the defendants, they pointed out.

In his opening statement, Mr Tan said that the plaintiffs' claim is "manifestly excessive and unreasonably incurred". He added that he did not breach his duties as a member of the sales committee and had acted in the best interests of all subsidiary proprietors.

The plaintiffs' alleged loss and damages were also not caused by his alleged breaches, he said. But even if he had breached them as pleaded, their loss and damages were not caused by him, he said.

Mr Samtani pointed out in his opening statement that he resigned from the sales committee in July 2007. Even if he is liable for costs, he contended, it should be limited to the first application taken by the committee for the collective sale of the property before his resignation. This would mean that he is not liable for any costs in view of the 2009 decision by the Court of Appeal, he said.

The minority owners argue that the Court of Appeal's finding that Mr Samtani and Mr Tan breached their fiduciary duties means that the two men were also the cause of the plaintiffs' losses.

The alleged breaches include failing to declare their purchase of additional units around the transaction time and failing to improve the chances of obtaining a better price for the property.

Senior Counsel Kannan Ramesh of Tan Kok Quan Partnership, who is acting for the minority owners, also argued that Mr Tan and Mr Samtani were effectively saying that the court should now come to a different conclusion from that handed down by the Court of Appeal.

This is something that they could not do, he said.

esthert@sph.com.sg


About the case

THE intended $500 million sale of Horizon Towers to Hotel Properties (HPL) in January 2007 turned into one of the most dramatic and protracted en-bloc battles in Singapore's history.

The affair spanned more than two years and went back and forth between the Strata Titles Board (STB) and the High Court twice before being decided in the Court of Appeal.

It ruled in April 2009 that the deal could not go through because the development's sales committee had failed to fulfil its duty on several fronts.

Three sets of minority owners have now cited that landmark judgment as they seek reimbursement for the hundreds of thousands of dollars they have each spent in the battle.

They are suing former sales committee chairman Arjun Samtani and committee member Tan Kah Gee, alleging that the two of them had pushed for a quick sale of the property for their personal gain.

They claim that the two men had bought additional units in Horizon Towers at the start of the collective sale process and were therefore keen to profit from a sale.

The Court of Appeal judgment accepted as fact that:

•     Mr Samtani and Mr Tan had bought additional units in Horizon Towers;
•     The sales committee had received an alternative higher offer of $510 million from Vineyard Holdings one day before HPL verbally indicated it was willing to buy the development for $500 million; and
•     The sales committee agreed to sell Horizon Towers to HPL in spite of a suggestion from one committee member that it seek the approval of the other consenting owners because property prices had shot up. The committee was concerned that the deal would fall through if the other owners were consulted.

The Court of Appeal also ruled that HPL and the estate's majority owners should share the legal costs for the second High Court hearing, the Court of Appeal hearing and the second STB hearing.

The minority owners now want compensation of $585,000 for the sums not covered by that Court of Appeal judgment.

The case will be closely watched as it is seen as a litmus test for possible legal action that can be brought to bear against those involved in collective sales.

ESTHER TEO