Management Corporation Strata Title Plan No 2285 and Others v Sum Lye Heng (alias Lim Jessie)

• Jurisdiction: Singapore
• Judgment Date: 20 October 2003
• Date: 20 October 2003
• Docket Number: Originating Summons No 757 of 2003
• Court: High Court (Singapore)

Sum Lye Heng (also known as Lim Jessie)

Plaintiff

and

Management Corporation Strata Title Plan No 2285 and others

Defendant

[2003] SGHC 245

Woo Bih Li J

Originating Summons No 757 of 2003

High Court

Courts and Jurisdiction–Jurisdiction–Inherent–Power to stay in respect of criminal prosecution–Whether private summons against plaintiff abuse of process of court justifying stay–Land–Strata titles–Management council–Council member interested in proposed contract with management corporation–Whether compliance with ss 66 (1) and 67 (2) of Land Titles (Strata) Act (Cap 158, 1999 Rev Ed)

The first defendants were a management corporation (“the MC”). The second to eighth defendants were members of the council of the MC (“the Council”).

The plaintiff, Ms Lim, was the hairperson of the Council from 13 November 2001 to 17 June 2003. During this time, she was also a director and shareholder of SCMS Property Management Pte Ltd (“SCMS”). SCMS was a property management company that submitted a tender for the provision of managing agent services (“the services”) to the MC on 15 May 2002. On 13 May 2002, Ms Lim had indicated to some Council members that she would formally declare her interest as a director in SCMS to the Council and would not be involved in the evaluation of tenders for the services. She also offered to tender her resignation from the Council at the next meeting but her offer was declined. On 15 May 2002, Ms Lim declared her interest in SCMS. This was followed by another declaration on 29 May 2002.

Following a breakdown in the relationship between Ms Lim and some Council members, the MC alleged breaches by Ms Lim of ss 66 (1) and 67 (2) of the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed), and issued a private summons against her. Section 66 (1) of the Act required a management corporation council member interested in a proposed contract with the management corporation to declare this interest at a meeting of the council as soon as practicable. Section 67 (2) of the Act stated that such a council member should not use his position to gain any personal advantage.

The present application to restrain the MC from proceeding with further action in the private summons was filed by Ms Lim on the ground that there was an abuse of the process of the court.

Held, allowing the application:

(1) The High Court had the inherent jurisdiction to restrain the MC from proceeding with the private summons as well as to grant a permanent stay of the prosecution of criminal proceedings: at [47].

(2) Ms Lim had made a valid declaration of her interest in SCMS in compliance with s 66 (1) of the Act at the council meeting held on 29 May 2002. The Council had accepted the validity of the meeting and declaration. Given that the Council had then acted on the basis that Ms Lim had complied with the provisions of the Act, the defendants were estopped from asserting otherwise: at [65] to [68].

(3) The defendants could not complain that Ms Lim had used her position as chairperson in order to have SCMS win the tender. Members of the Council knew that Ms Lim was a director in SCMS when her offer of resignation from the Council of 13 May 2003 was declined and had even encouraged SCMS to proceed with the tender: at [69] and [71].

(4) The Council was precluded from making the complaint on which the prosecution of the private summons rested. Although some of the defendants were not members of the Council when Ms Lim was chairperson, they were bound by the decisions and actions of the previous Council. As such, the application sought by Ms Lim was granted and a permanent stay of the private summons was ordered: at [74], [77] to [79].

[Observation: An action or proceeding would be an abuse of process if there was no basis or foundation for it. Generally speaking, even a malicious or vindictive reason apart from the relief sought did not, per se,constitute an abuse of process if there was a valid basis for the action. On the facts, it was unnecessary to determine if there was malice since the Council was precluded from making the complaint on which the prosecution of the private summons rested: at [77], [78] and [80].]

Heng Joo See v Ho Pol Ling [1993] 2 SLR (R) 763; [1993] 3 SLR 850 (refd)

Williams v Spautz (1991-1992) 174 CLR 509 (refd)

Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) ss 66 (1), 67 (2) (consd);Second Schedule para 4

Lim Chor Pee and Rani Krishna (Chor Pee & Partners) for the plaintiff

Peter Low (Peter Low, Tang & Belinda Ang) for the defendants.

Woo Bih Li J

Introduction

1 This application was filed by the plaintiff Sum Lye Heng also known as Jessie Lim (“Ms Lim”) to restrain the first defendant, Management Corporation Strata Title Plan No 2285 (“the MC”) “from prosecuting or proceeding with further action in Private Summons No 138 of 2003 … issued against the plaintiff pursuant to the Complaint filed by the fourth defendant on behalf of the first defendant … on the ground that the said Complaint and the Private Summons amount to an abuse of the process of the Court”.

2 The second to seventh defendants were Council Members of the MC with the following difference: the fourth to seventh defendants were also Council Members of the previous Council whereas the second, third and eighth defendants were not Council Members of the previous Council. I will refer to the fourth to seventh defendants collectively as “the Existing Council Members” and the second, third and eighth defendants as “the New Council Members”. The Existing and New Council Members were included as defendants by Ms Lim as she had wanted them to be liable personally to pay costs of her present application as well as costs of the Private Summons.

3 After hearing arguments, I granted the order to restrain the MC (“the primary relief”) and ordered a permanent stay of the Private Summons. I adjourned the question of costs to be dealt with at another hearing so that Mr Peter Low, Counsel for the MC, could take further instructions. Since then, I made certain orders on costs after hearing arguments thereon. The MC has appealed against my substantive decision.

The Complaint

4 The Complaint pursuant to which the Private Summons was initiated was that Ms Lim had breached ss 66 (1) and 67 (2) of the Land Titles (Strata) Act (Cap 158) (“the Act”).

5 Section 66 (1) states:

Subject to this section, every member of a council who is in any way, directly or indirectly, interested in a contract or proposed contract with the management corporation shall as soon as practicable after the relevant facts have come to his knowledge declare the nature of his interest at a meeting of the council.

6 Section 67 (2) states:

A member of a council, or an officer or agent or a managing agent of a management corporation, shall not use his position as a member of the council or as an officer, agent or managing agent of the management corporation to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the management corporation.

7 It was not disputed that the complaint in respect of s 67 (2) arose from and was rooted in the same facts leading to the complaint in respect of s 66 (1).

Background

8 Ms Lim and the second to eighth defendants were subsidiary proprietors of various units in Harbourlights Condominium. The condominium was developed by Liang Court Technopark Pte Ltd (“the Developer”) and then managed initially by Premas International Limited (“Premas”). According to Ms Lim, both the Developer and Premas were part of the Capitaland Group.

9 At the first Annual General Meeting (“AGM”) of the MC on 19 May 2001, Ms Lim and the Existing Council Members were elected as members of the Council of the MC. In August 2001, the then Chairman of the Council, Mr Lee Chee Kiong, resigned from the Council and Ms Lim was appointed Chairperson on 13 November 2001.

10 The second AGM was scheduled to be held in the middle of 2002. According to Ms Lim, the Council was dissatisfied with Premas and decided to call a fresh tender for the appointment of a new managing agent at the second AGM.

11 Around April 2002, Premas was instructed to prepare tender documents for the selection of the managing agent. On 9 May 2002, Premas wrote to Ms Lim as Chairperson of the Council to state that it would not be submitting a tender. In its letter dated 28 May 2002 to all subsidiary proprietors of the condominium, Premas said it would not be continuing its services after the second AGM.

12 Ms Lim claimed that even before she was appointed Chairperson, she had told the other Council Members that she was a full-time director and shareholder of SCMS Property Management Pte Ltd (“SCMS”), a property management company. She also claimed that the other Council Members kept encouraging her to persuade SCMS to submit a tender to be the new managing agent and she had made it clear that if SCMS were to submit a tender she would not want to be involved in the tender exercise. Apparently a tender sub-committee was formed but she was not a member of it. In the meantime, her niece Janet Lim (whose married name is Janet Au) was the Secretary of the Council.

13 Tender documents were collected by various building managing agents and a memo dated 7 May 2002 was sent by Janet to all Council Members listing the names of these agents, including the name of SCMS. I will refer to these managing agents as “interested parties”. The memo stated:

Re: Tender for Managing Agent Services

We append the list of companies that has collected the tender documents for your necessary information.

[12 names were inserted including SCMS' name.]

We would like to highlight Section 66 (1) of the Land Titles (Strata) Act which states:

subject to this section, every member of a council who is any way, directly or indirectly, interested in a contract or proposed contract with the management corporation shall as soon as...