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Straits Times | prime.news
Text : Joyce Teo
It's final :
Horizon Towers sale is off
Surprise ruling
vindicates stand of minority owners
THE Court of Appeal
halted the contentious Horizon Towers collective sale once and for all
yesterday with a hard-hitting ruling that singled out the estate's sales
committee for scathing criticism.
The dramatic judgment
caught many by surprise and vindicated the four sets of minority owners
who opposed the sale from day one - about 3-1/2 years ago, when the idea
was first mooted - and spent nearly $1.5 million in legal costs.
One of those owners, Mr
Hendra Gunawan, told The Straits Times ion Thursday: 'I am very happy
that at last we can protect our homes.'
'We can't do anything
about it if 80 per cent agree to sell but they have to do it properly so
that everyone's home will be sold at a proper price.'
Industry experts are
also hailing the decision as a landmark judgment that will set clear
parameters for en bloc deals.
Thursday's ruling was
clear in its condemnation of the way the en bloc process was conducted
and was particularly critical of the estate's sales committee.
Among a litany of
criticism, it pointed to the committee's failure to follow up on a
higher offer for the estate, its undue haste in agreeing to a sale price
in a rising market and its sloppy procedures in appointing a marketing
agent and keeping owners up to speed on the transaction.
But perhaps the most
serious censure was directed at its failure to take heed of a possible
conflict of interest that arose when two owners bought additional units
in the estate just before they were appointed to the sales committee.
'The sale committee's
duty is to achieve the best price under the circumstances, and not just
a fair price,' said Mr Karamjit Singh, managing director of Credo Real
Estate, which has handled many collective sales but not that of Horizon
Towers.
The Strata Titles
Board, which backed the sale, was also criticised for the way it took
too much at face value - whether opinions on price or legal points -
when it should have been more questioning. It was also rapped for not
being more vigilant on the possible conflict of interest issue regarding
sales committee members.
One immediate effect of
the ruling is that one of Singapore's most drawn-out en block deals is
finally over.
The sale of the Leonie
Hill estate was first mooted in October 2005. The owners agreed to a
reserve price of $500 million the following year, just before the
dramatic run-up in the property market.
A deal was signed in
January 2007 when majority owners accepted a price of just below $850
per sq ft of gross floor area from Hotel Properties and its two
partners.
The 199 owners of the
99-year leasehold estate would each have pocketed about $2.3 million
while the 11 penthouse owners would each have received around $4 million
to more than $6 million.
A series of court
challenges followed. Even some majority owners turned against the deal
when they saw how the soaring market had made their sale price look like
a giveaway.
The property market has
since slumped and the en block market has dried up.
'On paper today, the
owners would have lost out, but probably by just 10 per cent," said a
property expert who declined to be named.
Only a handful of the
minority owners who objected to the sale fought on until the end,
spending millions along the way.
Mr. Ng Eng Ghee, Mr.
Gunawan and his wife Sulistiowati Kusumo and Madam Ong Sioe Hong were
represented by Harry Elias while Mr. Rudy Darmawan represented himself,
his wife and aunt at the hearing.
Madam Ong said her
group incurred expenses of more than $1.5 million. Another group of
objectors - who fought against the sale earlier - has spent around $1
million. Property industry experts said yesterday's landmark ruling has
struck a decisive blow for transparency.
"This is the first time
the court of appeal has held in favour of the minority owners," said Mr.
Phillip Fong, a partner of Harry Elias Partnership, which represented
four minority owners.
"There's now
substantial clarity on the extent of the duties of the sales committee."
Credo's Mr. Singh said:
"The judgment is undoubtedly significant. It clarifies what constitutes,
for example, good faith and conflicts of interest."
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