Tuesday, March 30, 2010

Horizon Towers lawsuit set to go on

MINORITY owners will get to go ahead with their suit over the failed $500 million Horizon Towers en bloc deal.

The High Court yesterday threw out an appeal by two former sales committee members who had applied to block the owners’ action against them.

Three sets of minority owners are suing the pair – ex-committee chairman Arjun Samtani and ex-member Tan Kah Gee – over costs incurred in the course of trying to block the collective sale from the start.

They want to be reimbursed for the more than $800,000 they spent, including 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 in a separate action last year, after the deal was quashed, are assessed.

Senior lawyer N. Sreenivasan and Senior Counsel Tan Cheng Han, appearing on behalf of the two appellants, had urged the court to throw out the suit by the minority owners, claiming it was an abuse of the court process.

They pointed out that the matter of costs had already been decided by the Court of Appeal in an earlier judgment and only the quantum remained to be determined.

They argued that the damages sought for alleged breach of fiduciary duties were actually a disguised move for costs and ‘it would have been reasonable for them to raise the costs issues at the (earlier) hearings’.

They added in court submissions that the minority holders would have incurred legal costs even if Mr Samtani had not done any wrong as their goal was to stop the collective sale.

But lawyer Kannan Ramesh, acting for the owners, countered that this suit was aimed at different people than was the case with the costs awarded by the Court of Appeal at the earlier hearing.

He argued that the alleged acts committed by the defendants were of a different category that called for different issues to be considered than the other consenting subsidiary proprietors’ decision to go ahead with the failed deal.

Among other things, both had failed to disclose to the others their potential conflicts of interest arising from their purchase of additional units while spearheading the implementation of the sales process.

Judicial Commissioner Steven Chong, who presided at last week’s closed-door hearing, ruled yesterday in a reserved oral judgment that there was no abuse of process by the minority owners in filing this suit as the subject matter was not covered in the previous court cases.

The appeal was dismissed with costs. A pre-trial conference to move the case will be held next week.

The Horizon Towers collective sale process 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, 30 Mar 2010

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