Wednesday, 15 October 2008

How Many CSAs can a CSA CSA?

I received this email from Mr Francis Zhan, retired Chairman from Regent Gardens (RG), which has given me (implied) permission to "keep [my] readers informed" of the development at RG. Let me post his email first (with private information anonymised), and then I'll respond, drawing from the RG judgment by Justice Lee Seiu Kin (available here, or here on scribd).

Dear Dr. Minority,

I read with great interest your blog on en bloc activities in Singapore, and thought I may be able to contribute the latest information on the most controversial en bloc sale in Singapore from the horse's mouth.

I am the last Chairman of Regent Garden Condominium, and have been its Chairman for 16 consecutive years, treasurer and council for the earlier 4 years.

You are probably aware of the situation surrounding our en bloc sale so I will not waste time with history. I will deal with the crux of the issue which is the key issue the majority owners are appealing to the Court of Appeal against the High Court's ruling on 16 May 2008.

Justice Lee S K had ruled that a purchaser may enter into a side contract with payment to the 6 minority owners to secure their agreement to the en bloc sale as nothing in the Sales and Purchase Agreement forbade such an arrangement. And to make his ruling practical, he issued an order that the 6 minority owners be enjoined as parties to the original CSA! (written judgement was released a week ago).

In effect, therefore, there are TWO collective sale agreements -- the main CSA with S$34.0m. to be shared by all 31 owners, plus an additional or sub-CSA with S$X.0m. to be shared by the 6 minority owners. To add insult to the injury, one of the 6 minority owners filed a suit claiming for "financial loss" based on the S$34.0 sale price, ignoring the additional receipts from the share of the S$X.0m.

We cannot understand how the Honourable J. Lee could arrive at such a conclusion without examining the meaning of a Collective Sale, and his judgement therefore produces TWO COLLECTIVE SALE AGREEMENTS. We are not even questioning the manner in which the purchaser obtained the consent of the 6 minority owners (vis a vis the Prevention of Corruption Act), and merely asked for the logic of such an arrangement, if validated by the Courts.

If a property owner can stay as a minority owner and gets two, or even three (as in the above case) cheques as against the majority owner getting only one cheque, who on earth would want to, or dare to, sign the CSA as a majority owner?

Will appreciate if you can keep your readers informed of this latest development, and transmit the information to any other forum on en bloc sales, for the benefit of the community because I don't want to see another property owner taken for a ride.
If you need any documentation on the above sale, do not hesitate to contact me. I can also be reached on my mobile XXXXXXXX.

Francis Zhan,
Retired Chairman,
Regent Garden Condominium.

I note with interest that Mr Zhan wrote "we" in his email, which I take to imply he represents the majority owners of RG, as it would seem the problem is with the minority owners obtaining additional sums from the sale, through some alleged private agreement with Allgreen (the buyer of RG).

The judgment for RG is very complex and addresses a number of issues. I want to pick on one only which is Mr Zhan's comment that the Judge effectively allowing more than ONE CSA to be executed, in this case, TWO CSAs. I'll draw from the judgment where necessary.

Firstly, the CSA is a very specific document. I cannot emphasise this repeatedly to as many people as possible. It's a contract, with all that a contract implies. As such, any clause that is present or absent in it has implications to the sale. In almost all CSAs I've seen, it's very very comprehensive, especially with regards to the protections of the majority owners and the SC. It sometimes include, in one I've seen, woolly clauses such as what happens when the sale price offered during the tender is less than the reserve price. This merely reflects poor contractual writing, in my opinion, especially considering how air-tight some clauses can be to protect the SC etc. The point is that there is only, and only, ONE CSA in any enbloc sale, and ONE Sale and Purchase Agreement. Mr Zhan's argument of TWO CSAs is therefore a rhetorical, and not a legal, one.

What he's alleging is that there is one CSA and SPA, and for the minority owners, there are private contractual agreements with Allgreen. Not CSAs. This is most obvious when you realise that the CSA binds and encompasses all owners eventually (should sale be approved) but any private agrement binds only the minority owners.

Can the developer do that? Mr Zhan disagrees obviously, since it creates the situation that allows for "greedy" minority owners to hold out and ask for more through private agreements. It also causes "an unequal and disproportionate amount to be distributed to all subsidiary proprietors" (Clause 22). Surely that is unfair to the majority involved! It means that everyone should endeavour to be the minority, to get more!

Let's examine that closely.

  1. If everyone waits it out, hoping for more money, then the sale will not go through. This means everyone will not get anything from it. In reality, this always happens. You have some minority owners who steadfastly refuse to sell, and others hoping to wait until the reserve price goes up, before signing. To collapse minority owners to being merely "greedy" is stereotyping and reflects simplistic thought. Enbloc sales are complex, and people will sign the CSA for various reasons, including but not limited to, greed.
  2. It's an "industry practice". Clause 44 of the judgment points to Mr Tan Tiong Cheng of Knight Frank who admits that "the practice of offering additional payments to minority owners to procure their consent to the sale of the relevant property is widely adopted within the industry". This means that at the very least, marketing agents, enbloc lawyers, and serial enblockers are aware of this. Under the new enbloc laws, minority owners now have the possibility of additional compensation if justified. This would be unfair to majority owners, but it's the law. What an owner has to consider, is if s/he will obtain such compensation or not, and hedge their bets.
  3. There's risk involved. Clause 26 shows how a third party notice against minority owners was made to determine, among other things, whether because of the private agreements, the minority owners are therefore liable to majority owners for damages. In other words, if a minority owner accepts the private agreement, s/he may be opening themselves up for potential lawsuits against them. So it's not instant cash in your hands.
  4. Because it's "industry practice", what the SC SHOULD have been done is to provide explicit clauses in the CSA and SPA to prevent such payments to be made (Clause 44). In other words, as mentioned earlier, how comprehensive your CSA is, is crucial. The judge went at length to point out that such provisions are not included in the RG CSA/SPA and hence, Allgreen is within legal means to provide supplementary payments to some owners. It's legal.
  5. The judge also asked the question of whether the additional payments to the minority owners constitute "detriment" to majority owners. Were they disadvantaged because they now have to sell below what others are getting, or below market value? He reasoned thus: "The fact that the majority owners now have to sell the property below its “market value” cannot suffice, since under ordinary contractual principles parties cannot be allowed to escape a properly formed contract simply because it turned out to be a bad bargain after they had ascertained what the development charge was. Nor can the fact that the majority owners end up receiving disproportionately less than the minority owners constitute “detriment”, since [the lawyers for the majority owners] would then be making the proposition that although the majority owners had, at the time of signature, been perfectly willing to sell their units at a particular price, the fact that the minority owners will receive a larger sum in order for the sale to proceed is somehow detrimental to the majority owners even though this will permit the sale to be carried out on exactly the same terms as the majority owners had contracted for in respect of their units." (Clause 48). In other words, when a person signs the CSA, at the expected value and terms, he should not want, or be found wanting, since it's a binding contract.
I return to Mr Zhan's key question: "If a property owner can stay as a minority owner and gets two, or even three (as in the above case) cheques as against the majority owner getting only one cheque, who on earth would want to, or dare to, sign the CSA as a majority owner?" The answer, as always is not simple. You sign the CSA knowing full well it's a contract and a binding one, with all the legal consequences that entails. If you are for the sale, sign it with independent legal advice on the implications of it. If you are not for the sale, review the CSA as it'll bind you later on, should the sale be approved by STB. In the final calculation of things, the CSA applies to everyone, be it majority or minority. But to refrain from signing in the hope of getting more from private agreements, is to hedge your bets - hoping that you'll get such an agreement from the developer (in many cases that does not happen), hoping that you will not get sued, hoping that the sale will go in accordance to the terms of BOTH the CSA/SPA and the private agreements.

I should also note that in the RG judgment, the judge has pointed out that there is no written agreement between Allgreen and the minority owners (Clauses 66 to 76). The arguments he made are on legal grounds, and point to the definition of what would count as a "further agreement". He found that there was no legal basis for such a "further agreement". I'm not a judge nor even a lawyer, and hence cannot assume to argue against his decision on this matter. That is a matter for the majority owners to make a case.

The morale of this RG tale? Mr Zhan's suggestion that it forwards the anti-enbloc front - that holding out for more money as a minority owner is a good thing - has to be tempered with the legal and financial risks involved. As in any legal case, having damn good lawyers make a difference in whether you can defend yourself or not. I therefore have to disagree that there are multiple CSAs involved in RG's case, have to disagree that minority owners are inherently 'greedy', and have to disagree with the simplistic view that minority owners stand to gain everything by holding out for private side-payments.

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Quiet yet not so quiet

The global recession has pretty much killed anyone from attempting an enbloc, and anyone still trying their luck is seriously revealing to their own estate, and to everyone else, just how selfish they are, simply because they NEED to sell, rather than wait for the RIGHT time to sell.

It's been so long since I last posted, that I forgot my password to my blog and that blogger has changed some of its features lol. Still, there are some very hardworking enbloc bloggers around. Hope 4 Stayer's still chugging along, and the blogger at Tampines Court has taken this lull period to reflect on their own experiences. They have started a series of VERY GOOD blog posts on the various pitfalls of enbloc sales. Do start reading from here, and I believe they'll still continue with their excellent posts ranging from the problems with MCs being in SCs, to EOGMs etc. Please do go read them.

I will in the next post put up an email which interest me but because I was overseas, didn't really have much time to think about it. Be right there :)

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Wednesday, 13 August 2008

Prime News on Hope Group

This is something we don't see often - when a group of self-volunteered home owners get together to create a website with information to help other owners who are being subjected to the enbloc blight. "Self-volunteer? Sure, like the sales committee!" I hear some cry, but there's a big difference - sales committee 'volunteers' have a big FINANCIAL gain out at the end of their effort, assuming the sale succeeds. Hope volunteers have no such gain except the satisfaction that they have helped to educate the public, and helped owners to protect their basic, fundamental, right to a home. And THAT, my friends, is what volunteerism should be about. Don't see much of that around nowadays, when others are put before self.

This was printed in the Straits Times the day after National Day. I'm reprinting the whole thing, and I have a wee comment at the end, in response to the last person interviewed in the piece.

Hope for owners fighting en bloc; A website with information on the laws and processes in collective sales is aimed at helping minority owners
Straits Times Prime News 11 August 2008
By Lim Wei Chean & Arlina Arshad

THE name of the website - - says it all. It is a forum for, and set up by, people who are worried about losing their homes in a collective sale.

Its opening words are a call to arms.

'We need to share our experiences to get us through this nightmare,' it reads.

'We hope that our daily lives can be free from the constant worries of losing our homes to those who see home as a mere financial tool for wealth.'

Cosmetics distributor Tan Keng Ann started the site when his neighbours wanted their condominium along Toh Tuck Road sold en bloc last year.

The 60-year-old said there had been a dearth of information online about collective sales.

'We want this to be an educational site, for people to learn more about en bloc sales.'

And so the Hope website was born. (It is an acronym for Home Owners' Protecting Entitlements.)

The site started in February with about five or six members from estates on the chopping block. Today, it has a core group of 25 flat owners scattered in 15 estates that are going through the sale process, some for the second time.

They include Bayshore Park, Green Lodge and Pine Grove, some of which made waves in the media by forming an anti-sales brigade.

The Hope group's objective is to equip stayers, also called minority owners, with information about the en bloc process so they can fight to keep their homes.

The website is expansive. It includes a compilation of the collective sales law, legal tips for minority owners and a list of confirmed, on-going and failed en bloc deals.

One member, who declined to be named, joined after some new faces at her condominium tried to get elected to the management committee.

She said: 'I didn't know what these people were up to.'

She learnt soon after when a collective sales order was tabled.

For those who opposed the sale, information about the en bloc law was key, she said. They were facing an uphill battle against a majority of owners who had professional consultants to guide them through the legal minefield.

One minority owner in Rainbow Gardens along Toh Tuck Road wishes he had known earlier how to navigate the en bloc landscape.

The resident, who declined to be named, protested against the sale even though it had the requisite 80 per cent support to go through.

His appeal to the Strata Title Board, a government authority that rules on en bloc sales, was turned down. He took the case to the High Court but, the sale went through before it was heard.

Disappointed, the man said he is considering writing about his ordeal for the Hope website.

He said: 'My advice to minority owners is pray hard you don't get the 80 per cent.'

Meanwhile, the Hope group is cobbling together a list of proposals for the Law Ministry to consider.

A ministry spokesman said it will 'continue to monitor the effect of the changes in practice, and review the feedback to see if further amendments to the en bloc rules are necessary'.

Not everyone is supportive of the Hope website, though.

Mr Issac Chin, an investor who sits on the sales committee of Pearl Bank Apartments at Outram Park, which is trying to go en bloc, does not see the need for such a group.

He said the law is clear: if 80 per cent of the owners want to sell, the sale will go through.

Mr Chin is absolutely correct - the law is indeed 'clear' on the matter of what criteria should a sale counts as valid. However, as many who have been through enblocs and suffered for it know, the law is also very UNCLEAR and SILENT about many things:

  • The law is SILENT about the fact that home is a basic fundamental right, and it should not be the case that other owners can take that right away from you. It's like if 80% of your community vote that you must convert to a particular religion, you must comply, whether you like it or not. I'm sure noone will stand up for that, right?
  • The law is UNCLEAR about how to handle harassment from aggressive people, be it majority or minority. They are able to act with impunity because they are fully aware that their actions will not count as any form of bad faith under the enbloc law. This shouldn't be the case at all.
  • The law is UNCLEAR on what should count as good faith, especially considering that numerous arguments have been made in front of STB about many incidents that should constitute bad faith, but were thrown out simply because the law was too restrictive in its meaning of 'good faith'.
  • The law is UNCLEAR about itself. We've seen legal titans battle it out in court, we've seen judges issue judgments that seem to sometimes contradict the meaning of the law, and other times advocate the enbloc law to a fanatical degree. If such legal minds that make up our legal profession can spend hundreds of thousands of dollars slugging it out in court, often at our expense, does it not say something about the law itself? Worse, where does that put us civilians who have little to no knowledge of legal matters?
As Mr Chin showed, he chose a particular interpretation of the enbloc law - that of a single point of 80%. Hope stayers will clearly highlight that there are numerous other parts of the law that is highly ambiguous, questionable and even so legally knotted that it really should at the very least be re-examined.

Friday, 25 July 2008

The Very Real Terrorism of Enblocs

We've always heard of the thuggish gang mentality that can emerge from estates undergoing enbloc. The very real presence of bullying, of threats written or verbal, of people telling others to shut up during meetings (blogged about previously, here).

And now this:
(Photo courtesy of the Straits Times)

Residents of the Laguna Park condo on East side Singapore are facing urban terrorism in the form of vandalism. According to the Straits Times report, the vandalism on owners' cars "were 'inside jobs' committed by people who support the en-bloc deal". You can read about it here or here.

I have mentioned in the past that the enbloc process is flawed and unfair, because it shifts too much power to a group of owners - the prosalers. After all, the signing of the CSA is not done independently by an auditor and anonymously at an appointed time, like elections. Rather, the sales committee (and anyone it chooses to inform) knows exactly who is not keen to sell. Can you imagine if in a real life political election, the dominant party (the one who holds power) has access to such knowledge - of who is not keen to vote for them? Imagine the consequences for that. That's why in elections, it is crucial to protect the citizenry by ensuring anonymity in the voting process.

No such thing in enbloc sales. The SC knows who is signing and who doesn't want to, via the lawyer. They are not bound by any confidentiality clause so they can reveal such information to other owners, who may be more aggressive in forcing people to sign the CSA. Other estates have stayers who received hate mails, signs put up on their doors, vandalism etc.

What can be done? Surely if owners are coerced into signing the CSA, it's a sign of bad faith?

Not under the law because (1) the law allows you a cooling period to pull out your signature, regardless of the fact that you were forcibly coerced (2) bad faith does not consider threats to your personal being or property.

So what can you do?

  1. The most important thing is to form a stayers group. There is strength in numbers. Some of the bullies in the estate depends heavily on the fact that stayers are likely to be cowering in fear of their property and lives, and so can get their way by threatening with impunity. A stayers group can act not only as a support group, but as a neighbourhood watch group, to help each other keep an eye out on suspicious activities. Get the help of the Hope4stayers group (here).
  2. Report to the police, and document everything in the enbloc process. Even if it can't be brought up at STB, you can investigate the possibility of a lawsuit. I've been told that some police have classified such enbloc-instigated vandalism as 'mischief'. That is totally incorrect (according to my reading of the Penal Code). Compare 'mischief' and 'criminal intimidation' below. It is clear that the vandal intended not just to damage your car, but to intimidate you into agreeing to the sale.
    • Mischief: (Para 425 of Penal Code). Whoever, with intent to cause, or knowing that he is likely to cause, wrongful loss or damage to the public or any person, causes the destruction of any property, or any such change in any property, or in the situation thereof, as destroys or diminishes its value or utility, or affects it injuriously, commits “mischief”.
    • Criminal intimidation: (Para 503 of Penal Code). Whoever threatens another with any injury to his person, reputation or property, or to the person or reputation of any one in whom that person is interested, with intent to cause alarm to that person, or to cause that person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, as the means of avoiding the execution of such threat, commits criminal intimidation.
  3. Use car security cameras to protect yourselves. There are now gadgets that can be installed in cars that will take video recordings or photographs of suspicious people who come near your car. They are typically small, easily hidden, and the vandals won't know what happens until the police comes knocking on their doors. You can find such products locally here and here (I googled around!) or in some shops in Sim Lim Square. You can read the AsiaOne Motoring advice on "To catch a car thief" which includes information about these small cameras that can be installed to catch vandals (article here). I understand most of these devices are inexpensive. Some of these devices can be installed on your unit entrance as well.
  4. Other measures include getting security cameras installed in your car parks, or do like what my SC chairman used to do - park in front of the existing security cameras. Always :)
An interesting finding in the Penal Code: Para 267C states that whoever makes, prints or distributes under his control any document that is "likely to lead to any breach of the peace shall be punished with imprisonment for a term which may extend to 5 years, or with fine, or with both". I wonder if the CSA counts as a document that causes a "breach of the peace", which in most estates, it does.

My final comment is that in this highly inflammatory environment that is created in enbloc estates, it is imperative that you do not stoop down to threats and vandalism. This applies to BOTH prosalers AND stayers.

Wednesday, 23 July 2008

Let's Enbloc Organs!

Received this email which insists that the Health Minister Mr Khaw need not worry about procedures for organ trading; just use the enbloc law since it works so well! I've reproduced verbatim.

Email Subject: En-bloc Organs the Way to Go Man!

Mr Khaw Boon Wan don't need to look further than our en-bloc regulations to implement organ trading. After all, there are similarities - Your organ is not your own, your organ is not protected by the Constitution, your organ is more important for society, society want the best for your organ!

Step 1: Getting the stakeholders!
Suppose you want to sell your kidney. You have a total of 50 living relatives in the world. Gahmen issues you the same number of random citizens, so 50 citizens. You need to hire a marketing agent (anyone with experience on enbloc, sure can sell your organ wan!). Your agent has to convince 80% of your 100 stakeholders if you are 30 years and above (30 yrs is chosen as the threshold because of scientific evidence from University of TalkCock so dun pray pray). 90% of your 100 stakeholders if you are younger than 30 years old. If you wish to donate gahmen protected organs (like brain lah if you have Ph.D., reproductive organs if you have university degree) then the threshold is 50 years old (must make sure you use them first, for country!). All stakeholders will get a cut of the profit from selling your organ, and of cuz the more organ you sell, the better!

Step 2: Getting the majority vote!
Marketing agent has 1 year to obtain 80% or 90% vote from your stakeholder. They then have 1 year to public tender your organ and apply to Ministry of Health for approval of sale. From tremendous enbloc experience, agent can split stakeholder group into "sell sell" group - mostly random citizen who dun know who you are and dun care, "die die dun die" group - close relatives who worry you might not survive the organ operation.

Step 3: Public tender!
Now agent will put your organ up for public tender. Of course, if got under-the-table offer, can consider lah. Dun worry, you dun have to worry about the highest bidder, sometimes lower bidder but from reputable family who needs your organ for future of Singapore, can oso. You will always make the right judgment call.

Step 4: Application to MOH for approval
Now must send your application to MOH for approval. A Organs Donation Board will be set up consisting of lawyers, engineers, architects, business consultants. People who knows what's best for you! They will decide if sale is done in good faith by checking on (1) sale price, (2) organ renewal potential - whether your body part is going to someone better in society or not (3) relationship of buyer to seller - obviously the closer the buyer is to seller the better.. organ type compatability lah! Dun worry if your agent blackmail your relatives, threaten to take their organs instead, all this is legit since sale still done in good faith.

Step 5: Minority objection
No such thing. For show only. Organ is for betterment of Singapore. Objector can appeal to High Court but why waste money?

Step 6: Completion
Your organ is not your own anymore. You cannot do anything to damage it, like go on beer binge, buffet, char kway teow. Buyer reserves the right to call upon you to operate on your body, just to make sure what they bought is what they want. And clear anything in the way, like blood vessels. No worry, buyer's surgeons have the best of concerns for your organ. I mean, for you!

Step 7: If more than 1 organ
If you intend to sell more than 1 organ (kidney, liver, reproductive organ, toe, finger, eye, ear), then must set up sale committee who has the best interests of your organs in mind. SC must be people with the highest standing, are professionals with plenty of experience. You can find them in the Classifieds under Organ Raiders. They will do their best to sell your organs to the best (not have to be highest) bidder. They will get a cut of the profit for their services. They don't need to know you, they just want your organ!

See, Health Minister no need to worry! The en-bloc law is unfallable and faultless! The Organ Donation Board only need to rubber stamp and approve sale. After all, the recipients are bound to be very successful citizens of Singapore whose lifestyle ruined one or two organs, no worry, can just buy and replace cos got money! They are more important to society!

So let's en-bloc organs!

[Note from Dr M: Not sure if I should be worried about this email, or take it as tongue-in-cheek. God help us if it's actually taken seriously!]

Tuesday, 22 July 2008

"Is there such a thing as a happy enbloc?" Jessica Cheam's article online

I'm not sure if this will be published tomorrow or not, but I just noticed that Jessica Cheam, the ST reporter that does quite a bit of reporting on enbloc matters, has published a new article online. You can read it here but I'll quote her last 2 paragraphs (which captures a sense of the enbloc discontent):-

Singapore is a young country, and our en bloc laws are even younger. It is not yet perfect, and what is becoming more apparent in our unique strata-titled property landscape is that these laws have to be tweaked to make the process more transparent and equitable.

This will likely take a long time, and claim many en bloc “victims” along the way. But as long as we do not stop improving our en bloc laws, perhaps someday, we can finally achieve this myth that’s called the “happy en bloc” and urban rejuvenation can happen without the expense of an inidividual’s basic human right to keep his home.

You can read the full text here on her blog 'from the ground up' (nice title) :)

Sunday, 20 July 2008

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.