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"I am a BLOGGER NOT an expert. This is a BLOG not a 'go-to' website for official information. I represent no one's view save my own. I have neither legal nor financial training, nor do I have anything to do with the real estate industry. My understanding of the Collective Sale Process is from a layman's position only. My calculations, computations and tables are homespun and may contain errors. Please note that nothing in this blog constitutes any legal or financial advice to anyone reading it. You should refer to your lawyer, CSC or financial adviser for expert advice before making any decision. This disclaimer is applicable to every post and comment on the blog. Read at your own risk."
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There is one thing worse than an Enbloc ----- and that is an Enbloc done badly. Since the majority have the necessary mandate to sell, then they owe it to all SPs to make a success of it. Minority SPs can only watch and wait, if they sell then lets pray it's at a price we can move on with, if they don't sell, then we are happy to stay for a few more years.

KOON SENG HOUSE (High Court)

Thought I'd look into the sole minority owner's objections to the sale - as stated in the High Court decision Goh Teh Lee v Lim Li Pheng Maria and Others [2009] SGHC 242

Facts first:
CSA required unanimous agreement  (100% owner approval)
CSA: 27 out of 33 units signed - date of first signature 29 Dec 2006
Supplemental CSA to lower RP: 30 out of 33 - signed date of first signature 24 Mar 2007, last signature 6 Sep 2007
No share values, and as unanimous agreement  was not going to be attined, the SC applied for a Notional share value to be assigned to the estate - granted 7 Mar 2008
Application to STB - 16 April 2008


Purposive interpretation again applied:
9A. — (1) In the interpretation of a provision of a written law, an interpretation that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to an interpretation that would not promote that purpose or object.
22     Therefore, I observe that where necessary to effect the legislature’s purpose behind the statutory provision, the courts are willing to depart from its literal interpretation.



49    From a review of the provisions of the Act ([1] supra) dealing with en bloc sales and the Schedule, it is obvious that the main purpose of the legislation is to make it easier for en bloc sales to take place. This is achieved by dispensing with the need for unanimity and requiring in lieu thereof the consent of only the requisite majority of the subsidiary proprietors more particularly set out in s 84A(1) of the Act. At the second reading of the Land Titles (Strata) (Amendment) Bill (Bill 28 of 1998) containing the provisions for en bloc sales, the Minister of State for Law, Assoc Prof Ho Peng Kee, said (see Singapore Parliamentary Debates, Official Report (31 July 1998) vol 69 at col 601):

"I had informed this House on 19th November last year that Government would be amending the law to make it easier for en-bloc sales to take place. The current position is that a single owner, for whatever reason, can oppose and thwart the sale. Government has received many appeals and feedback from frustrated owners whose desires to sell their flats or condominiums en-bloc have been so thwarted. As a result, these buildings cannot take advantage of enhanced plot ratios to realise their full development potential, which would have created many more housing units in prime 999-year leasehold or freehold areas for Singaporeans. A secondary benefit is that these developments, especially the older ones, could have been rejuvenated through the en-bloc process."


Plaintiff's grounds of objection to the sale:

(a)     whether it was possible to determine if the requisite majority had been obtained if notional share values were assigned after the execution of the CSA by the majority owners;

40     I dismissed the plaintiff’s contention. There is no requirement that the notional share value must be obtained before the owners appended their signatures to the collective sale agreement, in this case the supplemental agreement. What matters is that when the application is made to the Board for a collective sale order, it must be shown that the collective sale agreement (in our case the supplemental agreement) had been signed by the requisite majority (such majority being computed by reference to the notional share values).
 
(b)     that the method of distribution for the sale proceeds stipulated in the CSA (which was that each unit share equally the sale proceeds) was unfair because it did not take into account the notional share value or floor area of each unit and, pursuant to s 84E(11) of the Act, the single owner of the nine terrace houses was not entitled to the proceeds of the collective sale;

42     The Board found that, on the facts and upon consideration of the opinion of expert witnesses, the method of distribution agreed to by the majority was “fair” in the circumstances of the case.

43     In the context of en bloc sales, the concept of fairness is often both an elusive and subjective one
.......... in successful en bloc sales, disparate individualistic ambitions give way to group realism in recognition of the fact that no unit sold piecemeal would fetch as much as in a collective sale. Instead of prescribing “fairness” as such, s 84E(9)(a)(ii) provides that the Board shall not approve an application if the Board is satisfied that the transaction is not in good faith.

(c)     that the application to the Board for a collective sale order was out of time because the application was not made within 12 months from the date the agreement of the owners representing 80% of the notional share values to the first CSA was reached;

This view was erroneous for two reasons.
36     First, where an earlier CSA had failed to achieve its intended purpose, ie, to sell the land to a purchaser, the proprietors of the land could not be precluded from making a new agreement with a lower reserve price. Hence, the supplemental agreement constituted a fresh agreement. Therefore, time for the purpose of para 1A(a) of the Schedule should be reckoned from the date the first signature was appended to the supplemental agreement.

37     Second, s 84E(3)(b) provides that proprietors holding not less than 80% of the aggregate share value may apply to the Board for a collective sale order. At the earliest, the 12-month period within which application may be made to the Board starts when 80% majority has been reached or first crossed (as the case may be). The plaintiff was therefore wrong to say that time for this purpose started running from the date of the first signature. There are two distinct 12-month periods. As I said, application may be made to the Board as soon as 80% majority has been reached or first crossed. However, this does not mean that the 12-month period within which application must be made to the Board necessarily starts then (see para 1(a) of the Schedule). For example, it could start at a later date when a greater percentage majority is reached so long as the time elapsed from the first signature to the time when such desired majority is reached is also not greater than 12 months (see para 1A of the Schedule).

 38     The first signature to the supplemental agreement was appended on 24 March 2007 and the last was on 6 September 2007 (well within the 12-month period within which a majority of not less than 80% had to be reached). The other 12-month period (ie, that within which application to the Board had to be made) commenced on 6 September 2007. Therefore, the application made on 16 April 2008 was well within time.

(d)     that there were numerous instances of serious non-compliance with the mandatory statutory provisions of the Act which could not be waived by the Board;

Technicalities...
'this was again a hopeless objection'
'this was a point devoid of any significance and nothing hangs upon it'

(e)     that the STB did not have the power to override the order of a Subordinate Court ordering that the plaintiff be prevented from disposing of his assets (including the flat).

59     I agreed with the Board’s decision. The plaintiff’s wife had agreed to the collective sale. Therefore, there was no reason why the plaintiff could not apply to court for a variation of the injunction.

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