No-Go On Horizon Towers Sale: Minority Victory After Long Fight

Source : The Straits Times, Sunday, 5 Aug 2007

When Mr Hendra Gunawan and three of his neighbours tried to engage lawyers to block the collective sale of Horizon Towers, three firms turned them down flat.

All felt they had no case. The last time the Strata Titles Board (STB) ruled in favour of minority owners was seven years ago.

Although more than 80 percent of the owners were reported to have signed the collective-sale agreeement, it still needed the board’s approval before the sale could proceed.

But in June, Harry Elias Partnership agreed to represent them, and on Friday, the board ruled in their favour.

The firm’s lawyer Philip Fong explained that the deal was thrown out because the application for STB approval did not comply with the law.

‘They dismissed the application on this ground alone, and not on the merits of the case.’

For the minority, however, it has been a long fight.

Although 33 owners objected to the sale, only nine turned up to file an official objection with the board in late May.

Besides the four, three owners were represented by Tan Kok Quan Partnership, another by Pang & Co, and the last chose to represent himself.

Mr Gunawan, a 51-year- old businessman, attended all the mediation meetings and hearings since they began late last month.

Now, he is just relieved that he will get to keep his home of seven years.

‘We were determined and committed to our cause; the comfort we so enjoyed in this home was at stake.’

The two tower blocks in Leonie Hill were due to be sold for $500 million to Hotel Properties Limited, Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Gulf Arab state of Qatar.

When STB threw out the deal, HPL issued a statement reserving its rights against the majority owners who signed the collective sale agreement and the sales committee of the property.

Lawyers, however, say that the contract to sell was conditional upon STB’s approval. That would have protected the majority owners from a breach of a commercial contract.

But the contract may have contained other clauses which enable buyers to examine whether the majority owners had attended properly to technical issues - such as making sure approval papers are in order.

One lawyer who spoke on condition of anonymity said: ‘This is a big area, and if the potential loss to the buyer is $500 million, then they might be willing to spend $1 million to test the case in court.’