The Singapore Constitution and the Enbloc Law Pt 1

Over the past few days, if you have not heard, the Horizon Towers (HT) Judgment was given by Justice Choo Han Teck (who made previous judgments on the HT case last year - see here) which effectively allowed the sale to go through.

You can read the judgment either on the Supreme Court website (available for 3 mths only) here, or I've uploaded it onto scribd where you can read online or download as a pdf here. You can also read Today's reporting on the 'landmark ruling' (here)as well as one reader Ong Cher Meng who is, and rightly so, very concerned about the implications of J Choo's judgment on the future for minority owners trying to save their homes (available here). You can discuss these issues on the condosingapore forum here.

Due to work constraints, I'd very much like to address some of the key concerns that emerged from J Choo's recent judgment, but unfortunately I can't. At least not immediately. I'll try to do this over the next few weeks (sorry!).

What I want to address is the point of the constitutionality of the enbloc law (LTSA) which the minority owner lawyer Mr Chelva Rajah raised, but was not really reported in depth in the papers. You can read the pertinent points raised by Mr Rajah and responded by the judge - Points 5 to 7 on the judgment document.

The 2 points in the Singapore Constitution raised by Mr Rajah, that he argued conflicted with the LTSA, were Articles 9(1) and 12(1) which are (available on the Statutes Online here):

• 9(1): No person shall be deprived of his life or personal liberty save in accordance with law. [On 'Liberty of a person']
• 12(1): All persons are equal before the law and entitled to the equal protection of the law. [On 'Equal protection']

Mr Rajah raised 2 challenges on the Constitution (Points 6 and 7 of the Judgment). I want to comment on Point 7 first in this post, since that is one I'm incredibly uncomfortable with. I will quote the salient part of Pt 7 here:

"Mr Rajah argued that ss 84A and 84B(1)(b) were in breach of Art 12(1) because Art 12(1) is presumed to lay down a prohibition against unreasonableness and arbitrariness. He submitted that the 80% rule discriminated against the appellants as the minority because the majority thus has a choice as to where they wished to live while the appellants would be deprived of that choice. Counsel is not wrong insofar as the final consequence of achieving a majority was concerned, but the circumstances and the law in this regard are more complex than that. Firstly, the right to equal protection under Art 12(1) must be determined from the outset, that is to say that when a law is passed, it must apply to everyone equally. Hence, until the subsidiary proprietors decide who wishes to sell, there is no majority nor minority. The opportunity of selling a condominium en bloc is an equal opportunity to all subsidiary proprietors. Neither the legislature nor the STB decides who the minority would be; the minority is decided by a vote of all the subsidiary proprietors. Secondly, the law founded upon a majority vote in such circumstances is consonant with the democratic ways of condominium living. Thirdly, unlike the constitutions of the countries referred to by Mr Rajah, the omission of a provision in our Constitution that would have ensured a fundamental right to own property was a deliberate omission given the scarcity of land in Singapore and as such, the court must recognise that there is no such fundamental right under our Constitution. The Land Acquisition Act (Cap 152, 1985 Rev Ed) in fact allows the government to acquire any land in Singapore for specific purposes so long as it provides due compensation. Considering these factors together, I am of the view that the provisions of the LTSA do not infringe Art 12(1). "

J Choo's rebuttal to Mr Rajah's argument that enbloc laws do not grant equal opportunity and protection rests on the 3 points he raised:-

1. The right to equal protection must be determined "at the outset", "when a law is passed, it must apply to everyone equally".
2. The majority vote is democratically valid.
3. The Constitution does not include a fundamental right to property ownership, due to land scarcity.
   

J Choo elaborates on the first point: "Hence, until the subsidiary proprietors decide who wishes to sell, there is no majority nor minority. The opportunity of selling a condominium en bloc is an equal opportunity to all subsidiary proprietors. Neither the legislature nor the STB decides who the minority would be; the minority is decided by a vote of all the subsidiary proprietors."

My concern is the rather precarious definition of "at the outset" - when is the outset of the law? There are two interpretations of this 'starting point' or outset:

• First interpretation - when the very first EOGM is convened in accordance with the First Schedule of the LTSA. This seems to be J Choo's point of outset - since he argues that at this point there is "no majority nor minority". Majority and minority only appears at the 2nd starting point which is...
• Second interpretation - when an application is made to the STB for the collective sale. At this point, the 80% majority has been achieved and it is clear cut who benefits from the sale and who are against the sale.

The opportunity to sell enbloc "is an equal opportunity" ONLY from the standpoint of the first interpretation. It becomes a moot point from the second interpretation because equal opportunity would not exist anymore - majority have rights and access to funds, legal consultation and representation, enbloc expertise, and so on, with far more opportunities than a minority owner.

So when is the outset, to coin J Choo's phrase? The LTSA provides two sets of legal procedures - one is about how the enbloc process should be conducted as indicated in the various Schedules, the other is the process of application to STB for the collective sale embedded within the Act itself. I'd argue that the application to STB should be the 'outset' of the law, and not before, when there is no majority or minority. After all, until the STB application or the 80% vote has been triggered and the CSA executed, the entire process could fail to materialise in which case the definition of majority or minority is really meaningless. The Schedule procedures are merely means towards the actual STB application, without which there would be no enbloc to speak of whatsoever. So if we take the second interpretation of 'outset' - when 80% is achieved - does the law provide equal opportunities for everyone? Not anymore.

To give a concrete example, the access to legal representation and consultation is a double blow for any minority owner who wishes not only to challenge the sale at STB or the Supreme Court, or even to challenge a point of law (which is what many of the latest legal battles are about nowadays). Not only does the minority owner have to find legal representation for him/herself (or as a group), and in these days, s/he has to find a damn good and hence expensive lawyer because the legal arguments are all about how well one can interpret the law, s/he has the trauma that should the sale succeed, s/he has to pay (a) legal fees for his/her own lawyers (b) legal fees for the majority owners' lawyers as deducted from the sale proceeds (c) court and legal fees of his/her opponent if the Judge finds that the minority owner (who let's admit, knows very little about enbloc law) is at fault (as in the case of Mr Ken Lee of Airview Towers). The majority owners can divide legal fees across themselves, which can amount to maybe a few thousand if you have a large number of units, compared to the hundreds of thousands for the minority owner. Access to legal representation is NOT an equal opportunity for minority owners.

Let's look now at J Choo's 2nd point - that the majority vote is democratic. I question this notion of democratic and I question the definition of majority being pegged at 80%. A MAJORITY vote would simply be 51%, at a given point in time, and not across a long period of time to acquire that vote. It's like a moving goal post if you like - if you compare a truly democratic process of the Singapore Elections - majority vote is counted and defined at a fixed time of a few weeks after the start of the election process. It isn't the case that the process allows for any one party to say, 'let's check the votes and see, ah only 40%, let's continue for another year till we get that additional 11%' to become a majority vote. It also ISN'T the case that access to expertise, funds are equal for both parties - prosale owners and SCs have far greater access than stayers. So is it democratic, like an election? No. And of course, I'm still quite convinced that the figure of 80% as trigger point was decided by some policy maker who liked the number '8' but held back defining it '88%' because it'd be hard to calculate in round numbers in most estates.

Finally, to J Choo's last point about what I call the 'land scarcity doctrine' which argues that the right to own property cannot be constitutional since the government has to have the right to develop land as it sees fit. He cites the Land Acquisition Act (LAA) to support his argument, which in as early as 1999, a certain opposition MP JBJ had pointed out that since we already have the LAA, why have the LTSA? Indeed, the primary difference between the 2 Acts is the shift in responsibility and agency from the government (LAA) to subsidiary proprietors (LTSA), without considering (a) the social impact of enbloc sales (b) the power bias that majority owners have over minority owners (c) the differential access to opportunities (d) the unscrupulous means by which votes are obtained. In fact, to suggest an extreme position, I suspect if the LTSA is replaced with the LAA, there would be less discontent about enbloc sales, since the government has the final say on the redevelopment of the land.

In fact, if J Choo's judgment holds weight in future enbloc sales (and it'll surely do, since it furthers the cause of prosale owners), as Mr Ong Cher Meng pointed out, the future for stayers is gloomy indeed. I'll elaborate more on this in subsequent posts, particularly about J Choo's clear stipulation of the function of the STB.

A caveat here: This is not to say that I think J Choo doesn't know what he's talking about. I have no doubt that he's a competent judge in Singapore's legal system. And I am nothing more than a mere layperson when it comes to the law. What I do wonder though, is how policies and laws can be made, and upheld, without understanding the actual dynamics and nuances of the process itself. Sure, at the start when the law was made, everything was theoretical to a point. But the law has been enacted for close to ten years now, with plenty of feedback on the problems that needs to be redressed in the law. Yet the recent amendments has done little to address many of the issues raised here, and by numerous other people subjected to enbloc trauma. I'm not sure how laws get changed, who is responsible for that change, but if law makers and policy makers are not themselves subjected to an enbloc process against their wishes, how will any of the problems make sense to them? At the very least, law and policy makers need to invite groups such as the Hope4stayers into consultation over law reform. Many people in the Hope group are professionals, with experiences that needs to be shared with law/policy makers, to provide a more balanced view of the enbloc process. We can always hope, can't we (no pun intended).

Jeannette Aruldoss in April 2008 has written about the issue of the unconstitutionality of the enbloc sale. You can read her letter on scribd here. She has raised many important points as well.

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Tags: horizon towers, horizon towers judgment, ong cher meng, choo han teck, collective sales, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, collective sale, singapore