Horizon Towers Update - Judgments by Justice Choo Han Teck

For those who don't know this, there are 2 judgments available on the web, pertaining to the Horizon Towers case. Both are by Justice Choo Han Teck and you can read the actual considerations and deliberations that he went through for (a) allowing additional parties to intervene - here (or on scribd archive here) and (b) his decision on approving the appeal here (or on scribd archive here). The first is currently on the Supreme Court's website but the second judgment was removed from the website for a few days and placed back in again. I have reproduced it from Google Cache and stored it on scribd here. [If this is not allowed, please contact me and I shall remove the documents.]

As someone who has acquired the ability to read academic texts (a long arduous and painful journey I can tell you), reading legal documents like the CSA and judgments are headache-inducing for newbies like me. But this is a landmark judgment in today's enbloc craze and I'd suggest that readers take the time to read this post first, and then supplement with the actual judgment in its entirety. It's long so grab a pillow and get comfy.

I want to begin by what I think probably are the most philosophical and poignant passages in the judgment by J Choo, with regards to the nature of law :-

"The nature of law is purposive. Law is always purposive for if man and society were perfect there would be no need for law. We often encounter complications when one principle of law appears irreconcilably incongruous with another. We are also often compelled to seek the middle course between extremes such as immutability and ephemerality; sometimes as an exercise in precision and sometimes out of nervous uncertainty. Nonetheless, the courts are also often urged to reject the compromise in order to be absolutely right rather than to be half wrong. Law is also largely interpretative, and so “absolute” is a very difficult word to employ. Almost everyone has his idea of what the law is or should be, and how it is to be applied. It is not unusual to find that the more uncertain and difficult the hermeneutic exercise becomes, the more one resorts to vague terms such as “justice”. That is why it is not unusual, therefore, to find opposing arguments each claiming to be an argument from justice. Anyone who has studied the chariot race in the Iliad will understand the inherent contradictions in that word. The conflict between fairness, entitlement, and desert all too often stands in the way of a just or ideal solution to disputes.

That said, fairness requires that the law is applied consistently to everyone in similar circumstances. It gazes upon the horse as it does the horseman. It may be the appellants today who slipped, and tomorrow, the respondents. If the majority succeeds it is because it is right, not because it is the majority. Likewise, if the minority succeeds it is because it is right and not because it receives favours granted only to the underdog. Therefore, in determining the correct interpretation of a law or principle of law, it will be helpful to consider whether an opponent would have objected as strenuously as he did had he been the one in need of the very interpretation he challenges. " (Paras 7 & 8)

".. if man and society were perfect there would be no need for law". For those doing the polls on the right, this sentence carries a lot of relevance. I've always suggested that an IDEAL enbloc could be carried out if people pitch together to work towards a common goal - be it to redevelop or retain/upgrade their estate. In other words, sure, the new amendments to the enbloc law could have been better but if an estate makes that effort to be all-encompassing in fairness and transparency, then there wouldn't be a need to defer to law except for procedural reasons. But enblocs necessarily are about money and profits, and society often crumbles in the face of such financial incentives that compels individuals, not collectives, to act individualistically.

For those who have not read the Iliad, a good summary can be found in this (academic) PDF article here (pages 11 to 14 - gripping stuff). J Choo's point, I'd hazard to guess given his reference to the Iliad, is that the notion of 'justice' is not as clear cut as one would like to believe encased in words of law. Despite both parties (majority representatives and minority representatives) wielding concepts like justice and fairness, J Choo acknowledges that they are "vague" and may stand in the way of a "just or ideal solution to disputes". He points out that fairness must be consistent across all parties - the majority succeeding in the sale is not because they are that 80% and therefore, as some in the condosingapore forum would argue with fervour, justified in the sale. It is because they are right in the eyes of the law. It's not the case of might makes right, but right means right for both majority and minority.

Now the High Court is there only to hear about "points of law" (Para 2). These are (Para 3):

1. "Whether the law permitted the Board to dismiss the application on the ground that there was a defect in the application without hearing the application on its merits"
2. "If there were a defect, whether the Board had the power to allow an amendment of the defect"
3. "Whether the Board was right in law to hold that it was constituted by the application and its existence is extinguished when an application is invalid"

The STB's grounds for dismissing the application (Para 5) was that "there was a defect in the application by reason of the three missing pages and that this defect was incurable because the Board had no power to allow an amendment so as to provide a cure". Subsequently, the board dismissed the application and disbanded.

J Choo first asked, what exactly was this incurable defect that jeopardised the entire application. Both sides pointed out that the consequences of this defect was either "criminal" or "merely a 'technical' or 'clerical error". Rather than deliberating on this, he instead asked - because of this defect, whether "an error or omission had caused prejudice to the minority" (Para 9). He reiterated this point - if the error "had a material effect on the minority's rights" (Para 10), then the STB had to make an appropriate ruling. However, and this is the important part:

"There had been no argument from any counsel as to what harm had in fact been caused. It was said that the application would be relied upon by the minority owners to decide whether to oppose it, but it did not seem to me that the three missing pages in question had any material effect on the decision of the minority in this case" (Para 10).

This has bearing even under the new laws which stipulate that technical non-compliance be ignored unless it prejudices the interests of any owner. Note the difference here - "any owner" as opposed to J Choo's focus on minority owners. The new law therefore allows that errors may have a material effect on both majority and minority owners. However, only minority owners can object which means majority owners that have been prejudiced will need to alert the minority owners. Possible scenarios (off the top of my head) where prejudice may be caused - calculation of % was incorrect and you signed on that basis hence tipping it over to 80% and executing the CSA; notices not put up clearly and you signed because of incorrect information hence tipping it over etc. I'm sure you can think of other examples.

Of course, you won't realise an error was made until in hindsight (which can be months later) and even then, you can't object because you've become a majority owner etc. But the point is that determining and ascertaining the error or non-compliance is insufficient - you need to find out if owners have been affected in any way by the error, and how (eg signed on wrongful or incorrect information). It means, as always, carefully documenting every information that was given to you that may have caused you to make certain decisions. You never know when such information may turn out to be useful especially if it prejudiced your decisions.

As a final note, I think there still is a disparity between (a) the narrowly defined list of valid objections - financial loss, bad faith (as defined by sale price, apportionment, and relationship of purchaser to SP), SPA arrangement, SC refusal to accept STB's order to increase proceeds to minority owners, and (b) prejudicial acts that materially affects the decisions/interests of owners. 'Prejudicial acts' (in the spirit suggested by J Choo) has a far wider meaning and is meant to encompass acts or information-dissemination that may provide incorrect or misrepresentative impetus for owners in their decisions. Blatant misrepresentation or outright lying would count as prejudicial to the interests of owners. But note that these are not valid grounds for objection (as listed in (a)). It's a real pity the list of valid objections is so narrowly construed and remains unaltered by MinLaw.

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Tags: horizon towers, high court judgment, choo han teck, collective sales, en bloc, en-bloc, en-bloc sale, enbloc, collective sale, enbloc sale, singapore