MINORITY owners have had a key victory in yet another court fight over the failed $500 million Horizon Towers en-bloc deal.
An assistant registrar in the High Court yesterday threw out a bid by two former members of the sales committee to halt an action against them by the owners.
The three sets of minority owners are suing the two – ex-committee chairman Arjun Samtani and ex-member Tan Kah Gee – over costs incurred when they tried to block the collective sale.
They want to be reimbursed for more than $800,000 in costs. This includes the cost of hiring lawyers to advise them and other administrative costs.
The sum is expected to be partially offset when the costs awarded to the owners by the Court of Appeal last year, after the en-bloc deal was quashed, are assessed.
The owners argue that both committee members were ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’, according to court documents.
Lawyers for the committee members countered that the minority owners’ suit should be struck off as the action was ’scandalous, frivolous (and) vexatious’. They also pointed out that the Court of Appeal awarded costs last April in a case that dealt with all outstanding issues of reimbursement.
But the minority owners argued that the new case is different from the one settled last year.
In that case last year, costs were awarded for the minority owners’ conduct in opposing the proposed sale by the consenting majority owners.
The present action is different as it is based on what they claim is the lack of good faith in the collective sale deal struck by Mr Arjun and Mr Tan as members of the sales committee.
They allege that this ‘lack of good faith’ resulted in minority owners having to put in a great deal of effort and spend a lot of money to oppose the sale.
In effect, they claim there was a breach of fiduciary duties and they want to be compensated for the costs from the resulting damages.
Mr Kannan Ramesh, who is acting for the owners, said in his submissions: ‘The causes of action in both cases are appreciably different.’
At a closed-door hearing yesterday, assistant registrar Leong Weng Tat ruled in a reserved judgement that the suit by the minority owners should proceed.
Mr Arjun and Mr Tan, represented by Mr N. Sreenivasan and senior counsel Tan Cheng Han respectively, can appeal to the High Court against the decision, otherwise the case will advance to a full hearing. Lawyers say either way, the case may eventually go to the Court of Appeal.
The Horizon Towers collective sale spanned more than two years and involved two Strata Titles Board hearings and two High Court hearings before being thrown out by the Court of Appeal last year.
Source: Straits Times, 25 Feb 2010