Appeal Against Horizon Towers Sale Dismissed

Source : The Straits Times, July 18, 2008

High Court ruling clears the way for $500m collective sale that was inked 1-1/2 years ago

THE drawn-out battle over the $500 million collective sale of Horizon Towers has moved one step closer to a conclusion after the High Court threw out an appeal by objecting owners.

Yesterday's ruling means the sale of the Leonie Hill estate, first inked in January last year, can proceed - unless the objectors pursue one final possible avenue of appeal to the Court of Appeal. Some are considering this option.

The case marks a win for Mr K. Shanmugam in his final appearance as a litigator on April 30 before becoming Law Minister. He appeared before High Court Justice Choo Han Teck on behalf of the buyers, Hotel Properties (HPL) and its two partners.

HPL executive director Christopher Lim said: 'We hope to move forward with it after 1-1/2 years of signing the agreement.'

They had inked a deal to buy the 99-year leasehold estate for less than $850 per sq ft of gross floor area, before prices shot up dramatically in last year's bull market.

Some sellers were unhappy with what they regarded as a low price, particularly after a neighbouring development sold for more than double that price. Others, including the objectors, never wanted to sell from day one.

The objectors had argued, for example, that the sales committee had acted in bad faith in the way it handled an alternative offer of $510 million from another firm as well as the way it distributed the sale proceeds.

Justice Choo, in his judgment, dismissed the appeal saying there was no error of law to justify overturning a decision of the Strata Titles Board (STB) to allow the sale to go ahead. The STB had found that the sales committee had made a 'judgment call' to proceed with the offer.

The objectors did not prove the committee had acted in bad faith, he said. This was an issue of fact, not law, so it was within the purview of the STB, he said.

'From the submissions and supporting documents, it appears that there may have been intrigue in the course of the en bloc sale from the day the SC (sales committee) was created to the proceedings before the STB,' said Justice Choo.

'It is questionable, however, whether the STB was the forum to resolve all questions arising from secret manoeuvres of the different factions among the subsidiary proprietors.'

The STB is not a court but a statutory tribunal, he added.

The Horizon Towers case was the first collective sale where the majority owners were slapped with a lawsuit for alleged breach of contract.

In late June, Justice Choo also dismissed an appeal by objecting owners of another large collective sale site - Gillman Heights. CapitaLand is the lead buyer of the $548 million site in Alexandra Road.