Source : The Straits Times, Oct 12, 2007
Court overturns board's ruling, saying technical errors not sufficiently serious to halt sale
THE Horizon Towers sale is back on, after a landmark decision by the High Court yesterday overturned a Strata Titles Board (STB) ruling to abort the deal.
Justice Choo Han Teck ruled that the STB's move in August to halt the sale based on technical errors in documents was wrong.
He said the errors were not sufficiently serious to prejudice minority owners opposing the $500 million sale of the Leonie Hill condo.
Lawyers said the ruling, which came after an at times hostile hearing last week, will improve the en bloc process for cases pending STB approval by establishing clear guidelines over how 'paperwork errors' can be dealt with.
Yesterday's ruling was hailed by Senior Counsel K. Shanmugam from Allen & Gledhill, who was acting for the buyers: 'This is exactly the result we wanted.'
The majority owners will now have to take the fractious case back to the STB.
Disgruntled minority owners have two options. They can go to the STB hearing and file their objections, which include disquiet over the price. But others may want to appeal against the High Court judgment.
STB threw out the estate's sale application because three pages with consenting owners' signatures were missing.
But Justice Choo said these were insufficient grounds: 'If an error or omission had caused prejudice to the minority, the board may ... dismiss the application.
'If it does not, the board is ... empowered to allow an amendment or correction so that the record is clear.'
Even without the three pages, the 80 per cent requirement for a collective sale had been satisfied, he said.
'If one takes the view that the board has no power to allow an amendment even for a typographical error, then an entire en bloc sale could be stopped by a comma in the wrong place.'
The ruling has not ended the legal wrangling.
The buyers - Hotel Properties and two partners - are suing the majority owners for alleged breach of contract. They claim the owners did not do their utmost to seal the sale at the price agreed to in February and want up to $1 billion in damages.
The owners, keen to keep that suit at bay, extended the sale deadline to Dec 11. HPL has put the suit on hold.
Mr Lim Seng Hoo, the estate's sale committee chairman, said yesterday's decision showed the owners had not breached their sale contract. 'We will go back to the STB as soon as we can,' he said.
Justice Choo's judgment has wider implications as well in that it puts uncertainties over technical errors to rest.
New collective sale rules that kicked in on Oct 4 allow the STB to disregard technical irregularities that do not prejudice any owner's interest. But this rule does not apply to applications that pre-date the Oct 4 change. These applications waiting STB clearance now have clearer guidelines.
'It is the first time a collective sale rule has been interpreted so clearly and in a purposive way,' said a lawyer involved in collective sales.
'It will affect other cases where an attempt to defeat a sale is going to be made on a literal reading of the rules.'
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