Saturday, November 10, 2007

The Strata Titles Board (STB) tribunal has delivered a startling decision that could spell the end of the en bloc sale of Horizon Towers.

The Strata Titles Board (STB) tribunal has delivered a startling decision that could spell the end of the en bloc sale of Horizon Towers. The ruling could in turn resurrect the $1 billion lawsuit filed by the buyers against the sellers.

Tribunal chairman Philip Chan announced yesterday that the board was under no legal obligation to rule on whether to approve the collective sale on or before Dec 11, the sale completion date.

This means, if the tribunal chooses to make a decision only after Dec 11, the sale agreement between the buyers and the sellers will lapse - and the en bloc sale will collapse.

The decision took many observers by surprise since a ruling after the sale completion deadline would effectively render the role of the tribunal pointless.

Mr Chan said yesterday the board made its decision after considering the submissions made by all the parties involved: the majority owners who have applied for a collective sale order, and the minority owners who are opposing the sale.

The would-be buyers - Hotel Properties (HPL) and its partners - were not permitted to be parties to this hearing, and could not make any submissions on the matter.

The tribunal on Tuesday asked the relevant parties to submit their arguments on whether the board had a legal obligation to make a decision on the collective sale order on or before Dec 11.

Mr Chan announced yesterday that, as all parties were in agreement that the board was under no such obligation, the tribunal would not be bound to make a decision by Dec 11.

The position seemingly runs counter to the one taken by the tribunal at an earlier Horizon Towers hearing in June, when Mr Chan agreed to bring forward the hearing dates - so as to allow the tribunal to make its decision before the earlier sale completion deadline of Aug 11.

Mr Chan said then, as grounds for doing so, that ‘courts do not sit for futility’, adding: ‘Courts are here to make sure that if we do give an order, that order must stick. The order must be put into operation; otherwise it would be unproductive. It may even be silly for a court to sit.’

The tribunal’s decision yesterday has not gone down well with HPL and its partners.

HPL group executive director Christopher Lim told BT: ‘We are very concerned about this development. It is surprising that the tribunal took the view that it had no duty to make a ruling before Dec 11, as that may potentially scuttle the transaction.’

He added: ‘We are also very disappointed that the majority sellers did not take the position that the matter be dealt with expeditiously and before Dec 11. During the earlier hearings, we had made it clear that such conduct by the majority sellers is in breach of contract.

‘As a result of these developments, we are currently reviewing our position.’

HPL and its partners have already sued the majority owners for breach of contract - claiming damages of up to $1 billion - but that suit has been stayed, pending the outcome of this STB hearing.

But HPL and its partners earlier also made it clear that they will consider resurrecting the legal claim against the majority owners if the en bloc sale ultimately falls through.

The dramatic reaction sparked by this one announcement was in marked contrast to the humdrum proceedings of the rest of the day. Former sales committee member Wee Hian Siew spent a second day on the stand, being grilled on whether he did his utmost to act in the owners’ best interests in the en bloc sale.

The session also saw a few laughs, as Mr Chan quipped that he would refrain from making any more jokes during the hearing - ‘in case I get reported’, he said. BT reported Mr Chan’s wisecrack about Mr Wee being a secretary ‘without a skirt’ yesterday.

The mood among the owners was generally upbeat, with some even distributing Deepavali sweets to those present.

Source : Business Times - 8 Nov 2007

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