Sunday, 30 September 2007

"Consider" This

A commenter "ngiamsw" posted an interesting comment about the nature of the word "consider" in the new bill, particularly in the context of general meetings held for collective sales (discussed here). A lot of people believe that "consider" means the following together: (a) to think rationally, (b) to discuss in a meeting, (c) to vote on the matter. I would have agreed on this except when I read lawyer Mr Ong Ying Ping's slides from a seminar he gave. In it he raised the question with regards to EOGMs - should resolution be passed to comply with para 1(c) Schedule to LT(S)A (which is to "consider the collective sale")? In other words, should voting for a resolution be allowed? He referred to Sim Lian (Newton) Pte Ltd v Gan Beng Cheng Raynes and Anor [2007] SGHC 84 which was a case on Lincolnsvale. In the High Court judgment, Asst Registrar Paul Tan stated in Para 77 the following:

The propriety of the EOGMs:
The respondents raised the point that the EOGMs held to consider the collective sale did not comprise any voting and were therefore void or invalid. This argument holds no substance. Under para 1(c) of the Schedule to the LTSA, the EOGMs are held to “consider” the sale; there is no requirement for any voting or any passing of any resolution.

"There is no requirement for any voting or any passing of any resolution" when it comes to considering the sale. Now I've long discovered that in matters of law, there is no black and white, and it remains to be seen if AR Paul Tan's argument about "consider" will be used against owners who wish to vote or pass a resolution. Of course, if the committee chairing the EOGM allows for a vote to be passed, it gives them a stronger mandate (since it does not require them to do so) and that speaks a lot more for that estate's sincere attempt for transparency and fairness to all owners. But will estates do this, or will they merely "consider"?

Now note that ngiamsw's quote of p26 of the amendment bill on the Notice on General Meetings (2nd Schedule) that the clause to "consider" (2b) is separate from the clause to vote (2d). So what can be voted? (1) in respect of each considered proposed resolution (2d) and (2) the election of members of the collective sales committee (2d).

So here is where things get tricky. I quoted the 3rd Schedule which lists the various purposes of the general meeting, most of which are "to consider". But 2nd Schedule requires a notice of the GM to be delivered to owners, which must include the proposed resolutions. So can an owner vote ("may vote in respect of each proposed resolution" - "may" not "can" or "must"; "may" infers option)?

There's therefore 2 interpretations, and until a ruling is made or a clarification is made on this matter - the court is still out on it.
  • (A) In accordance with AR Paul Tan's ruling, 3rd Schedule's various "consider" means that no voting is necessary - a resolution need not have a vote, although the sales committee might invite for such a vote.
  • (B) Every resolution should require a vote, which means at every general meeting #1-4 there will be voting on the various purposes as outlined in the previous post.
I doubt B is the correct interpretation though, because at two crucial points, if put to a vote, the entire sale process may be thrown right out: "consider [or vote for/against under interpretation B] the terms and conditions of the CSA" and "consider [or vote for/against under interpretation B] the terms and conditions of the SPA". Would the law be written in such a way that a resolution/vote at the 2nd and 4th EOGM might jeopordise the entire process if the vote is against the CSA or SPA? I don't think so. Which would mean interpretation A is the more likely meaning.

So what can owners do? If interpretation A is the correct one, while SCs are under no compulsion to vote, they can be pressured to do so; after all, it gives them a strong mandate and they have to be convinced of their own conviction that the process will result in a successful sale, right?

Hope I'm not losing people in this interpretation of the general meetings (which ultimately, is my own interpretation... so "consider" it lol). Do let me know if this is a wrong interpretation; I welcome comments on this. What is not for consideration is the VOTE on the right hand side, with only a few days left!


Anonymous said...

I'm less worried about the definition of 'consider' compared to another issue that bugs me.

Park West Condo, where I have been staying in for over 20 years, has had 2 attempts at getting a CSA signed. One was from late 06 to this September. Almost immediately after the failure of the 2006 CSA, the SC started another one, and the round of noise pollution (from briefings at the barbecue pit with amplification turned up so I can hear it even from my apartment) and harrassment by the SC and the property agents (phone calls, house calls) began once more. They were rushing for 80% before October to beat the new amendments. Thankfully they have failed so far, with I think about 60+ % signing the CSA. I can only wonder if they're going to try a 3rd time after the amendments kick in. It is extremely annoying to see notices pasted all over the place and property agents roaming around the estate.

Too bad there is no law saying that you can only start an en-bloc attempt 6 months after the previous one fails eh. Then at least we'd get some peace and quiet.

Dr Minority said...

But the advantage under new laws is that any SC has to go through the first hurdle now - the 1st EOGM. If you and others (and I'm sure there are others) are getting tired of the repeated attempts, then get enough votes to stop the attempt (majority vote by ordinary resolution). It's a tiresome process and would've been better if the law disallows repeated attempts (ad nauseum) but we have to work within the constraints.

Anonymous said...

I'll be sure to show up if they try this a 3rd time. :(

The minority owners, myself included are for now trying to stay under the radar.

During the last briefing by the SC, one idiot actually suggested that the unit numbers of those who have not signed the CSA be posted at every block so that he and others can go 'persuade' them to sign. Had the SC agreed to that, I'd have gone to the press with the photos and other evidence. Thankfully the SC chairman isn't a complete moron.

itshometome said...

At our EOGM to 'consider the sale' (after the fact) was just to fulfill a statutory requirement of the STB. The minority stood up and proposed 'an amendment to the motion' as is allowed under the Land Titles(Strata) Act and requested that a secret vote be taken. We even had the voting slips and box ready should they object by being 'not prepared'. A war of words ensued with the managing agent saying that 'to consider' was not a motion therefore there could not be an amenedment to it, hence no voting. Even the majority wanted to vote and stood up to complain! But it was blocked by MA, and the enbloc lawyer.
By blocking the vote, they did more harm to themselves than good by seeming to be non-transparent and against the general wishes of the SPs. They feared a negative vote, in other words.
If a request is sent in to the Secretary of the MCST before the Notice of the EOGM is posted out, then they would have to include it. If it is allowable by letter, it should be allowable by verbal request also. LT(S)A rules.

itshometome said...

Oops, I meant BMSM and not LT(S)A

Anonymous said...

I wish you luck in keeping your tanglin court home.

Hopefully the en-bloc madness subsides.

I forgot to mention earlier that the property agents involved in the 1st CSA attempt were thugs. Threatening phone calls and I actually saw a couple of them chase one of my neighbours into the lift! I was told their company has since gone bust.

The current bunch seems better least no one at home mentioned any really nasty phone calls.

Still, there was a lot of misinformation at the briefings, and with the SC chairman harping on and on about his apartment leaking and other rubbish. These are all basic maintenance issues that can be easily rectified (replacing waterproofing in bathrooms etc). You'd think that any building older than 20 years will collapse anytime, the way he was going on and on about it. and oh, my favourite one-liner from him
"this en-bloc is to enable you to unlock the value of your property".
Please. I wonder if he will use the same line if the SC tries for a 3rd CSA attempt.

ngiamsw said...

Hi Dr Minority,
AR Tan's ruling was prior to the new bill passed so perhaps there will be a clarification.

As I see it, on pg 33 of the new bill where it describes the various purposes for the Sales committee to convene a meeting - the bill uses "consider" for certain purposes such as property consultant, lawyer, apportionment, T & C of CSA,..etc but "inform"/"update" for the other purposes. I interpret that the bill specifically used different words in order to differentiate between resolutions to be voted on and what is just for information. Otherwise why not use the same word?

Anyway, that is my interpretation.

Dr Minority said...

Valid interpretation I must say, especially considering the different verbs used in the purposes for general meetings. Let's hope a clarification will be forthcoming (likely when objections are brought forward to STB on these grounds).