Tuesday, 16 October 2007

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.


Dr Minority said...


Would really appreciate your thoughts on this post... whether I'm off the mark or not, especially the disparity between objections and prejudices.

itshometome said...

I could not find the Supreme Court Judgement , save for part (a) and I would dearly love to read it in its entirety.
It isn't on Lawnet2 or the Supreme Court Website. Could they have taken it down?
Did you, perchance, save a copy?

Dr Minority said...

Most peculiar.. It looks like the judgment was taken down. I only printed a copy so I don't have it on softcopy. I'll see if I can scan it and put it up elsewhere.

Dr Minority said...

Found a copy of the judgment courtesy of google cache. Will adjust the links on the post accordingly.

rebelrouser said...

Dr. Minority,

Thanks again for updating us on the HT case and the judgement. I am writing this past midnight London time and after a long hard day. This is a rewrite after I lost the original comments which disappeared when I clicked on the button for posting, so do forgive me for any error or mistake as I ramble on again!.

Anyway, without having seen the affidavits filed by the various parties and the submissions made by all the lawyers, my cursory views here are based strictly on the abbreviated judgement which you have posted on the blogs :

1) Most of the provisions and rules promulgated under Acts like Strata Title Act are procedural as in Civil Procedure Act or Criminal Procedure Act. So when one submits any paper for approval, there are strict rules to follow and any omission means they get thrown out. After all it is not different from submitting a form for our passport. Any omission of facts about ourselves would mean that you don’t get your passport and the adjudicator throws it out. Similarly, when we vote, mark the cross in the wrong place , it becomes spoilt.

STB is made up of civil servants, if the omission was overlooked and the application approved, later the errors or omission are found, heads will roll. Any civil servant with his head properly screwed on would have all the right reasons to reject such a defective application.
Similarly, in an AGM, the minimum quorum is needed to approve any agenda, to omit this would mean the approval is void. Transparency is vital, there must be evidentiary proof that everything was conducted aboveboard, all the releveant parties were present to sign on the dotted line, that is why the rules were promulgated in the first place. Justice must be seen to be done.
Omission of 3 pages , would confound any court.

Strict liability provisions are there for a reason as in strict speeding offences on the road. I fail to see the point that the judge was making. His eloquent citation of Iliad ,Greek mythology is so off the mark. Mythologies are ideals which are beyond pragmatic Singaporeans fighting for the roof over their heads against raiders. It is a case of the underdogs poorly protected by weak watchdogs.

2) I fail to understand why HPPL is drawn into this case, since the application was submitted by the SCPs and why do they want to be part of the whole appeal? Are they planning to join the SCPs to sue their lawyers for the omission, or in this case most likely it was an oversight originated by some poor conveyancing clerk?

But then HPPL knows where to hit, where it hurts most and to get the most impact..the SCPs of course.
Hypothetically speaking, if the price of HT has fallen sharply, would they be that keen in this case or would they try to get out of it through this omission? Well if Ong Beng Seng is an honourable man and want to set good examples to his posterity , maybe not..

3)Since the draftsmen of this legislation did not provide for such an extraordinary circumstance, the Judiciary has to play the role of interpreter and provider of the law.
What happens next?
I agree with Michael Hwang’s submission that the court has to order and provide the direction for STB to take the next step.
Will STB be asking for a new application or just an amendment of the omission?
The delay has meant that all the timing and dates have expired, does that mean the rejection has also annulled and voided the Sales agreement? Does the agreement provide for this unforeseen circumstance?

3) What about the minority ? Have they been prejudiced? Yes, they were brought into an action which they did not ask for. What is their loss, is the delay a loss which they could claim since they would have to incur extraordinary expense to defend their case? The price has certainly changed with the delay, so is that a ‘loss in real terms’ therefore quantifiable ? Or are they going to be forced by the majority to accede to terms that they never agreed in the first place. Is ‘loss of market value’ caused through this delay, deemed loss regardless of what the majority have agreed since they did not agree with the majority in the first place?

Dr. Minority, like you I have continued to be unhappy about this legislation and its inherent rationale. Underpinning such a controversial piece of legislation is the very fabric of our society, the ownership of our country and our home which is given such scant respect.
To past such a drastic piece of legislation, and allow our homes to be demolished only after ’10 years’ is a measure that would be considered shocking in any part of the civilised world.

I was thoroughly disappointed at the reading of the last amendment Bill when none of the MP and certainly not the Minister of Law mentioned the short ’10 year’minimum tenure which literally make a mockery of 99 and 999 year leases never mind freehold leases! The 10 year minimum tenure before condos are vulnerable to raiders, are in complete incongruence to ownership of leasehold and freehold assets.
I am ashamed to be part of a country that obscenely destroys perfectly immaculate homes while the rest of the third world live in tin shacks.

The majority of the objection submitted has been over the form of distribution of sale and determination of sale price. In the absence of better means of distribution, the legislation has chosen to leave that to market practice which are often the practice of self-serving professionals who would take the easiest route.

As minority dissenters, it is about time I urge that we as individuals unite as a collective body, take the issue in our own hands to protect our home. We need to persuade enough petitioners to appeal for the government even in the light of the new amendments to review this legislation which has such alarming impact on our life.
Stand up Singaporeans and be counted if we believe in what we stand for.

It is way past 1 a.m. now, as I retire to bed, the sticker in my son’s room reads loud and clear: ‘Never underestimate stupid people in large numbers.’ I just wonder who is stupid here…perhaps just me, the rebelrouser fighting for lost causes!
.Good night to all and sleep tight , tomorrow I hope you will still wake up in your own condo..

Anonymous said...

The Law and the Lawmakers position on this issue is so clear. Not only have they introduced new policies to categorically address this, they fast-tracked it to prevent any other minorities (Gilman, Farrer, etc) from abusing this legal loophole.

I believe Justice Choo has done the legal community and property industry a service by putting an end to this mindless squabbling over nothing. Complex as an enbloc may be, commas and all, the HT sale order will come in due time.

Dr Minority said...

>>The Law and the Lawmakers position on this issue is so clear. Not only have they introduced new policies to categorically address this, they fast-tracked it to prevent any other minorities (Gilman, Farrer, etc) from abusing this legal loophole.<<

I highly doubt the fast tracking was because of other estates and more due to Horizon Towers' tight deadlines. Note that it's not a loophole, and Justice Choo has made it clear that a key point of interpretation of technical non-compliance is that it did not prejudice the interests of owners. That is, there was no substantive consequence that the non-compliance caused. IF Farrer Court's (or even HT's) minority owners are able to prove that a technicality led to some owners being misled, or misinformed that affected their decisions for the sale, then even STB has to consider the technicality to be a serious one.

Nothing is clear cut in law, as I've learned. Neither is it that simple.

rebelrouser said...


I find this statement highly offensive to all minority dissenters who have such alot of valid reasons not to want to exchange their precious home for a disputed sum of money which will never buy the same one they have been forced to give up.

HOw many times must we subject ourselves and our children to keep moving homes every time a condo reaches 10 years? HOw could we go to bed each night after 10 years in our condo wondering if tomorrow another greedy neighbour is going to sell our home without our approval?

This piece of legislation also affects landed property.
A wealthy friend of mine , who had built an architecturally immaculate home on 11,000 sq.ft found that the area was rezoned for high-rise condos and within 5 years she was harassed to give it up for a handsome sum not because she wanted to , but because all her neighbours were selling and she was dreading the fact that her home would be surrounded by a fortress of high rise blocks overlooking her private home.
So sadly, she had to sell out to a developer and rebuild another in a residential district which hopefully will not be rezoned for high-rise. The stress of moving and starting all over again is another story nevermind this obscene waste of good housing material !

So who are the ones who have to suffer the abuse of this piece of legislation?

Legal Loopholes- if there is a bigger hole the law has dug for us to bury ourselves in, this is certainly one which we will never see the end of!

rebelrouser said...

Dr. Minority,

Re-read your points and concerns with the judgement.

My unbridled response continues to be based on natural gut feeling as one who feels aggrieved and shortchanged by the laws that govern our proprietary interest as citizen in land scarce Singapore.

This piece of legislation is clearly one that impacts the pockets of a large majority of the middle class, the backbone of Singapore. The fact that so many are affected in such a short time, shows that there is something inherently defective about a law that causes such a lot of communal distress, elation , grievance , when laws are meant to protect and to uphold a semblance of cohesion for the community that it governs.

The HT case is a showcase that reflects everything that is inherently suspect about a law that is in danger of breeding epidemic greed masked in some other hypocritical guise . As Mahatma Gandhi once said: ‘This world has enough for everyone’s needs but not everyone’s greed.’

It is currently a case of bolting the gate after the horses have run out if not amok here.

However they wish to bolt the gates or run after wild horses, the outcome would not be different.
The spoils of greed leave no one satisfied, but certainly generate more hunger, obesity is a disease that begins with greed.

YOur opening point of the ideal world where law is not needed, is the foundation upon which the subject of jurisprudence is studied by all legal minds from their first entry to law school..what is law?

Without expanding this into a jurisprudential course which is outside the scope of this blog, the early theorists like Bentham and Blackstone, seeing law as descriptive, prescriptive and interpretive, also defined law as positivists did, they are legal rules eminating from moral rules , the legal oughts and the moral oughts that are reflective of the sort of society that has evolved and evolving.

Whether it is a case of ‘error in law’ or a ‘question of law’ that the appeal was being heard and deliberated, is probably quite immaterial when one is looking at a piece of legislation that is highly flawed because it does not seem to serve its community well, however it is interpreted, because whoever prescribed it in the first place did not seem to understand nor question the purpose for which it was intended nor anticipate the sort of ensuing problems that it could trigger when executed by a profit oriented community. Or more to the point too , in this case, is the community mature and sensible enough to use it well?
Common sense is often not common at all.

IN the explanation of theories of law, particularly where it involves an element of comparison upon which much of case precedence in legal process rest, the devise of analogy is frequently employed.

Here is where I cannot resist using a nursery rhyme far more comprehensible to the simple pragmatic minds of Singaporeans than Archilles in Iliad, let me reintroduce Humpty Dumpty.

Humpty Dumpty is the inflated egg sitting on a precarious legal wall
Supported by two weak scrawny legs , the pillars that support his massive weight that failed to grow proportionately to its body
Of course such dire imbalance would topple this obese egg.
So all the king’s horses and all the king’s men could never put Humpty Dumpty back again..now what a lot of messy egg ..breakfast on high cholesterol scramble egg anyone?
Fastest way to our final resting place
Broken egg shells, ashes, dust
mixed with demolished rubble make for great land reclamation fodder.
Any chance of a phoenix rising out of the ashes? Very likely, watch this airspace..and of course our miraculously mercurial skyline!