Horizon Towers Owners Likely To Be Taken To Court By Buyers

Source : Channel NewsAsia, 08 August 2007

Parties involved in the failed en bloc sale of Horizon Towers appear likely to be headed for the courts.

A deadline given by buyers of the Leonie Hill condominium has lapsed, leaving them open to sue the majority owners for losses of between S$800 million and S$1 billion.

The Strata Titles Board (STB) rejected the S$500 million deal last Friday, but the buyers want the sellers to give an extension and submit another application for the sale.

Channel NewsAsia understands that the sellers have yet to accede to these demands when the deadline expired at 3pm on Wednesday.

Owners of Horizon Towers could be taken to court soon.

Lawyers representing the buyers allege that they are now in breach of a contract to sell the condominium, inked in February this year.

K Shanmugam, Partner, Allen & Gledhill, says: "The application that was made was faulty, which is what the STB has ruled. So from our perspective, the sellers have not complied with their contractual obligation to make a proper application in court. We therefore decided that we will sue unless the demands that have been set out in Allen & Gledhill's letter were met."

The buyers - HPL, Morgan Stanley Real Estate and Qatar Investment Authority - say they stand to sustain major losses, including loss of profits.

Mr Shanmugam says: "The choices in this case for all parties are quite stark. For us, if we walk away, there are two substantial international parties who had confidence in Singapore and who have invested in this project. And the third, HPL, is a public company answerable to shareholders. And if they walk away and do nothing, how are they going to answer to their shareholders? And it's a substantial loss."

Deputy chairman of the sales committee Ms Doreen Siow told Channel NewsAsia that the sales committee is still consulting with its lawyers, Tan, Rajah & Cheah, and is meeting residents on Wednesday and Thursday to discuss their options.

Meanwhile, lawyer Shriniwas Rai, representing a separate group of majority owners, argues that the contract should no longer be enforceable after the STB's rejection of the sale.

Shriniwas Rai, Partner, Hin Rai & Tan, says: "I think that parties should look at how to get the matter resolved, either by mediation which is one approach - or to go by an originating summons to get a ruling from the High Court whether the contract as it stands now is enforceable or not. Whether it's a conditional contract, or it's a good contract. In my view it is a conditional contract. The board's approval is a first requisite, and having failed to obtain that, I think the purchaser cannot go ahead with the sale."

But he suggests that mediation as the best way for all parties to settle the case. - CNA/ch