Woo Hon Wai and others v Ramachandran Jayakumar and others

• Jurisdiction: Singapore
• Judge: Aedit Abdullah JC
• Judgment Date: 02 February 2017
• Neutral Citation: [2017] SGHC 17
• Plaintiff Counsel: N Sreenivasan SC, Ang Mei-Ling Valerie Freda and Vithyashree (Straits Law Practice LLC)
• Date: 02 February 2017
• Docket Number: Originating Summons 1014 of 2016
• Hearing Date: 23 December 2016,04 January 2017
• Subject Matter: Strata titles,Land,Collective Sales
• Year: 2017
• Defendant Counsel: The first, fourth and fifth defendants in person,The second and third defendants unrepresented
• Court: High Court (Singapore)
• Citation: [2017] SGHC 17
• Published date: 16 May 2017

Aedit Abdullah JC: Introduction

Shunfu Ville (“Property”) is a housing development in the central region of the island, nestled between Shunfu Road and Marymount Road, abutting Bishan town. It consists of 358 units.¹ Built in the 1980s, it was originally a development under the care of the Housing and Urban Development Corporation Pte Ltd.² In 2013, the Property was privatised, with a Management Corporation taking over the responsibilities for its maintenance and upkeep from the Housing and Development Board and the relevant Town Council.³

In that same year, efforts got underway for a collective sale of the Property.⁴ After failing twice to get a buyer by public tender at a reserve price of $688 million,⁵ the Property was contracted to be sold by private treaty at a sale price of $638 million in May 2016.⁶ Objections were taken to the sale, leading to the present application. Having heard the parties, I allowed the application for the sale of the Property over the objections of the Defendants. The Defendants have since appealed. As the completion date for the sale is scheduled in April 2017,⁷ the Plaintiffs have sought to have the appeal heard on an expedited basis; that is the subject of a separate application before a judge of the Court of Appeal.

Background

In November 2013, a collective sale committee (“Sale Committee”) was formed to act on behalf of the subsidiary proprietors in relation to a proposed collective sale of the Property.⁸ The Sale Committee was constituted pursuant to the Collective Sale Agreement (“Sale Agreement”), which was signed by the first subsidiary proprietor on 12 July 2014.⁹ This is a material date because it affects the relevant statutory timelines which were disputed before me.

Several clauses of the Sale Agreement are relevant to this application. First, the Sale Agreement specified that the sale of the Property should be at a reserve price of $668 million, which could be revised upwards by the Sale Committee:¹⁰ 6.4(a) The TOTAL SALE PRICE shall not be less than Singapore Dollars Six Hundred and Sixty Eight Million (S$668,000,000.00) (hereinafter called the “RESERVE PRICE”). Provided Always that the SALE COMMITTEE may, in its absolute discretion and having duly considered any input from the PROPERTY CONSULTANTS, be entitled to increase the RESERVE PRICE (the “NEW RESERVE PRICE”) as set out in this clause whether prior to, on or after the MAJORITY DATE, and in such event, the CONSENTING OWNERS who have executed this Agreement shall be deemed to have agreed to the NEW RESERVE PRICE without having to enter into any fresh agreement in supplement to this Agreement.

The Sale Agreement also contained a variation clause in relation to downward revisions of the reserve price:¹¹ 6.12.1 Notwithstanding anything to the contrary in this Agreement, and in the event that the RESERVE PRICE or any of the SALE TERMS herein cannot be attained, the SALE COMMITTEE may in its absolute discretion direct the SOLICITORS to draw up a supplemental agreement to this Agreement (hereinafter called the “SJA”) whereby each of the CONSENTING OWNERS shall be at liberty to agree [by way of entering into the SJA] with any one or more of the CONSENTING OWNERS and as well as with any one or more of the OWNERS who have not executed this Agreement, to sell ALL UNITS and common property in the DEVELOPMENT by way of COLLECTIVE SALE at a price less than the RESERVE PRICE, and/or upon terms which do not comply with the SALE TERMS, and the signing of the SJA by any of the CONSENTING OWNERS will not constitute a breach of this Agreement.

Provided Always that the SJA shall only be valid and binding if it is drawn up by the SOLICITORS with the SALE COMMITTEE’S approval and OWNERS with not less than eighty per cent (80%) of the TOTAL SHARE VALUE and not less than eighty percent (80%) of the TOTAL STRATA AREA in the DEVELOPMENT must have executed the SJA (hereinafter called “NEW CONSENTING OWNERS”).

The Sale Agreement thus contemplated downward variation of the reserve price by way of supplemental agreement consented to by subsidiary proprietors holding at least 80% of the total share value and total strata area of the Property. Notably, the requisite threshold of consents required for the supplemental agreement matched the statutory threshold for collective sale agreements prescribed in s 84A(1) of the Land Titles (Strata) Act (Cap 158, 2009 Rev Ed) (“LTSA”) that are necessary before an application can be made to the Strata Titles Board (“STB”) or the High Court for approval of a proposed collective sale. The Sale Agreement further provided that subsidiary proprietors who had consented to the original reserve price but not the variation would be discharged from their obligations under the Sale Agreement:¹² 6.12.2 Upon the SJA being entered into by the last of the NEW CONSENTING OWNERS who make up the minimum majority of owners having at least eighty per cent (80%) of the TOTAL SHARE VALUE and having at least eighty per cent (80%) of the TOTAL STRATA AREA in the DEVELOPMENT, the CONSENTING OWNERS who have not signed the SJA will forthwith be discharged from all their obligations under this Agreement, and likewise the CONSENTING OWNERS who have executed the SJA will forthwith be discharged from any obligations under this Agreement which they may otherwise owe to the CONSENTING OWNERS who have not signed the SJA.

As mentioned, the first signature to the Sale Agreement was obtained on 12 July 2014. Consent of the requisite majority of subsidiary proprietors to the Sale Agreement, as prescribed by s 84A(1) of the LTSA, was thereafter obtained in July 2015.¹³

Meanwhile, pursuant to a resolution dated 18 May 2015, the Sale Committee increased the reserve price of the Property from $668 million to $688 million.¹⁴ The first public tender was launched on 3 September 2015 at this reserve price of $688 million, but failed to attract any bidder by the time it closed in October 2015.¹⁵ A letter of expression of interest was, however, given by a developer with an indicative price of $628 million.¹⁶ This led to two supplemental agreements being signed. By the first supplemental agreement to the Sale Agreement (“1st SA”), entered into sometime between the end of 2015 and early 2016, the reserve price was revised downwards to $628 million.¹⁷ Thereafter, on 4 January 2016, the Sale Committee resolved to raise the reserve price to $638 million, and obtained a supplemental agreement to the 1st SA providing for the same (“2nd SA”).¹⁸ Clause 3 of the 1st SA provided that, if the Sale Committee resolves to increase the reserve price, the subsidiary proprietors who have already signed the 1st SA “shall be deemed to have agreed to such increased RESERVE PRICE without having to sign any further document”. This 2nd SA, which provided for the reserve price of $638 million, obtained the requisite 80% support on 12 May 2016.¹⁹

In the meantime, a second public tender at a reserve price of $688 million was held between January 2016 and March 2016, again without locating any bidder.²⁰ Private negotiations thereafter commenced between the Sale Committee and Qingjian Realty (“Developer”) as to the sale of the Property. Eventually, on 19 May 2016, a conditional sale and purchase agreement (“SPA”) was signed between the Developer and the Sale Committee (on behalf of the subsidiary proprietors) for the sale of the Property at $638 million.²¹ Thereafter, an application was filed with the STB for approval of sale under the SPA on 8 July 2016.²²

Objections were lodged by 5 of the subsidiary proprietors with the STB in relation to the proposed sale of the Property on 19 July 2016.²³ After a failed mediation attempt,²⁴ the STB issued a Stop Order pursuant to s 84A of the LTSA on 20 September 2016,²⁵ leading to the present application by the Plaintiffs, who seek the Court’s approval of the proposed sale of the Property under the SPA as authorised representatives of the subsidiary proprietors.²⁶

By the time of the hearing before me, the 2nd and 3rd Defendants have dropped out of the application.²⁷ Of the remaining 3 defendants, the 5th Defendant’s objection was in respect only of the quantum she was to receive for the sale of her unit, as a settlement agreement had been reached between her and the Plaintiffs.²⁸ Therefore, only the 1st and 4th Defendants remain substantively opposed to the proposed sale of the Property.

Although this is an application by the Plaintiffs, I state the Defendants’ objections before outlining the Plaintiffs’ responses for clarity and flow.

1st Defendant’s Case

The 1st Defendant, who did not appear to object to a sale as such, argued primarily that the Plaintiffs were not entitled to make this application as they did not meet the statutory threshold of consents under s 84A of the LTSA. In particular, he argued that the only valid consents were those under the original Sale Agreement, which related to a collective sale of the Property at the price of $688 million and not the actual sale price of $638 million. Subsequent variations to the reserve price by the 1st SA and 2nd SA were invalid as the consents to these supplemental agreements were not obtained within 12 months of the time of the first signature to the Sale Agreement, which the 1st Defendant argued was the relevant statutory timeline mandated by s 84A read with the First Schedule of the LTSA. Since the date of the first signature to the Sale Agreement was 12 July 2014, the Sale Committee should have obtained the requisite consents to all the documents – the Sale Agreement, the 1st SA, and the 2nd SA – before 11 July 2015 for the present proposed sale to be valid. Relying on Tan Siew Lian v Lee Khek Ern Ken [2008] 3 SLR(R) 941, the 1st Defendant submitted that the Sale Committee should have started the collective sale process de novo if it wanted to propose a sale of the Property at a price other than that...