IT HAD seemed like a walk in the park for Phoenix Court residents en route to a windfall, when the owners of all but one of the units agreed to sell off their apartments collectively for $88.1 million.
But just 11 days to go before the owners were due to pocket $1.8 million each, the sale has been stalled indefinitely — in a complicated legal saga that demonstrates why impending sweeping changes to the en bloc legislation, unveiled just two weeks ago in Parliament, are desperately needed.
On Friday, High Court Judge Andrew Ang, after hearing an appeal by the dissenting co-owners ordered that the sale be put on hold as he reserved judgement.
The tussle began in April last year when owners of freehold Phoenix Court, a 13-storey apartment block in River Valley, inked the Collective Sale Agreement (CSA). Out of the 47 units, the only dissenting co-owners were an elderly couple, Mr Yip Hoi Thong and Madam Ng Swee Lang.
Six months later, a deal was sealed with Bukit Panjang Plaza for $88.1 million. The sale committee went on to apply for a Strata Titles Board (STB) order to proceed with the sale in January. After the Board dismissed the couple’s objection, they took the matter to the High Court, demanding that the sale be annulled due to “defective” procedures.
Their lawyer, Senior Counsel Michael Hwang, argued that two of the three majority owners who had applied to the STB for the sale order, were not authorised to do so.
He also took issue with the fact that the valuation report by Savills was done six weeks after the CSA was signed — which while in line with current legislation, would flout new laws which are expected to kick in next month.
Furthermore, the method of distribution of the sale proceeds was also omitted from the sale and purchase (S&P) agreement.
Lawyer Christopher Yong, who was acting for the sale committee, pointed out that it was common industry practice to set out the method in the CSA only, adding that it was “at worst a technical error” that should not jeopardise the whole sale.
But Mr Hwang argued that the S&P agreement must define the contractual obligations between a buyer and the individual owners — since members of sale committee “lose interest very quickly, especially if they have gotten their money”.
The prevalent practice of treating the owners as one collective entity has resulted in many problems arising from “post-completion issues”, including the deadline for each owner to vacate.
Mr Yong maintained that what mattered was for the STB to be satisfied that the deal was done in “good faith” . He said the statutory requirements “are not absolute” and a deal must be allowed to go through as long as the procedural lapses are immaterial.
But Mr Hwang disagreed: “This is in effect a compulsory acquisition. The onus is on those who acquire my clients’ properties to adhere strictly to the requirements set out by the law.”
With the sale due to go through on Sept 18 and with many owners already committed to their new properties, Justice Ang did not hide his unease at ordering a stay on the deal — a move that could potentially result in further lawsuits by the buyers.
“Aptly summed up, it’s a real mess,” the judge said as he shook his head.
This is not the only “mess” for Phoenix Court residents. In a separate development, a group of 13 majority owners — who had turned their backs on the sale — have filed an appeal after their case was dismissed by the High Court. The group argued that the extension to the CSA — which had already expired — was not valid.
Source : Today – 8 Sept 2007