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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.

SHUNFU WRITTEN DECISION

Okay, it is out - the written decision to the Originating Summons No 1014 of 2016

I think this decision might be overturned at the Court of Appeal; it has the feel of a square peg in a round hole about it.



Important dates:


The Decision

28          The LTSA only requires that the requisite consent for the original collective sale agreement be obtained within 12 months of the date of the first signature to that agreement. Variation of that agreement can permissibly take place in the run up to the application to the STB, which is given an additional 12 months. There is in effect a 24 month period for the collective sale process as a whole to be played out. Accordingly, there was in the present case compliance with the provisions of the LTSA in respect of the statutory timelines and thresholds. 

Limits on Variation
47             I would note, however, that there may be limits as to what can be varied or amended, and what details may be specified in the variation. The ability to vary does not mean that there is carte blanche for matters to be left vague or indefinite, and postponed for specification later.   
51     It may be that there are other limitations or controls on the variation of a collective sale agreement, and some of these may need to be considered on a case by case basis.  

(1) Private Treaty Sale
58               I disagreed with the Defendants that there was anything procedurally improper or unfair about the fact that the eventual sale of the Property was conducted by private treaty. In particular, there was no requirement that, subsequent to a failed public tender, another public tender must be sought at a lower price before a private treaty sale could be concluded at that lower price. In the circumstances of this case, given the two failed public tenders preceding the private treaty sale, and the fact that requisite approval of the subsidiary proprietors had been obtained for the private treaty price (i.e. execution of the 2nd SA providing for $638 million), I do not agree that the Sale Committee failed to explore its sale options and seek the best possible sale price.

I respectfully disagree with this Judgement in part for the following reasons:

This decision hasn't broken any new ground, it just rubber-stamps a loophole in the 80% timeline.

The SC can now legitimately spend up to 24 months securing the 80% to their desired RP. The initial 80% on a dream RP  serves as a springboard to a second 12 months of signature procurement on a lower RP. This procurement can continue right up until the last minute before application to STB , even after failed public tenders and conditional sales agreements have been entered into, I presume.  

So much for LTSA limits - they are so poorly defined that they may as well be eLasTicSA .  
I would argue that the original intention of LTSA was to limit the 80% to12 months, not 24. 

Depending on the terms on the CSA, the owners may or may not lock themselves into subsequent RPs without further authorisation. 

So, I see it like this:- public tenders on the back of a dream RP are like throwing a weighted dice that are guaranteed to turn up snake-eyes.  The SC can use that initial 80% to continually prove the dream RPs worthlessness, comply with the annoying public tender requirement  and feign 'good faith' into the bargain. 

At the end of the day, 80% of owners still must agree to the 'whatever' RP. 

When you put the cart (public tenders / private deals) before the horse (Final RP) then shenanigans rule the day.

No wonder our MA is back on board - probably banking on a Shunfuvillesque scenario. 

19 comments:

  1. I agree with the decision. Everything happened within the allowable time frame and by means of 80% consent. Since tenders and negotiations can only happen after the initial 80% has been obtained it would be unreasonable and downright nonsensical to disallow variations during that stage.

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  2. That is a fairly strong judgement against the defendants. It feels to me as if the objectors were simply sour about the sale and tried to find faults with anything and anyone. Worse, they did so without consulting a lawyer. Not a good move.

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  3. I never understand why people take offence with absentee owners. Why would owners who don't live in their properties have less rights???

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  4. The first RP was less than 10℅ higher than the subsequent sales price. Hardly a dream RP if you asked me. In TC the initial RP was considered OK by many, only to be lowered and subsequently raised again. I honestly feel the fear unfounded. There is no precedence. Ultimately SPs and the market set the price.

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    1. It's a contradiction to say 'Ultimately SP and market set the price' and still refer to the ups and downs of our RP.
      SC lacked courage to confront MA. Revealed flippancy when they proposed an urgent price escalation after their 3rd Oct letter.
      10 years ago, in the midst of Tampines Court Enbloc round I, I recall the stress and anguish of our neighbours. They felt utterly betrayed and cheated.
      Itshometome and company took on the Big Boys. It was gutsy. The Majority Team were cowed when exposed at the STB.
      It's the SC/MA that decides on the RP. They can be transparent and candid or cagey and disingenuous. Skew the facts to bias the vote. The quality of our SC/MA will ultimately decide if we end up a Farrer Court, Raintree Gdns or Heaven forbid, Gillman Hgts.

      We live in a world of Messrs Madoff, Ponzi, Leeson, Jho Low...amidst scandals like Libor, Sub Prime, 1 MDB, Bearings, City Harvest just to name a few.

      When this SC takes refuge in the 'Power of Darkness' to keep us in the dark, I'm afraid, very afraid. I've long ago stopped believing in Santa Clause, Tooth Fairy and Fairy Godmother. You should too.

      An overdose of healthy scepticism is whats needed right now in Tampines Court.

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    2. Not really contradicting. No RP is worth a dime without 80% consent. Set it to low and people won't sign. Set it to high and nobody will buy. However, as the rules are right now one can only really move forward and test the market if 80% support has been achieved. Of course, all of the above is moot if SPs are not interested to cash out at all. Every SP has their own reason. All are valid.

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    3. As such, I think Shunfu did it right. Find an RP that gets 80% support. Put the estate on the market and let SPs consider(by means of 80% consent again) whatever offer comes in. An enbloc is such a long drawn process. Circumstances change.

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    4. If testing the market is about calibrating an RP just to attain 80%, not believing it to be viable, then it is wrong.
      It's the Law and we have to accept whatever 80% SP decide as the right decision only if they are presented with facts and unbiased information. Better chance for markets to be efficient if there's transparency.
      Negotiations with Buyers are confidential, as they should be. Therefore the integrity of our Representatives must be paramount.

      Market value can be tested even before 80%. SC of Tampines Court did not seize this opportunity. Question is why?
      Raising the RP by huge quantum after declaring 'impossible any higher' is a contradiction.

      I'm all for a properly done collective sale. Done right, fair and decent will not leave too bitter an aftertaste even with minority SPs.
      Deviously executed, even the majority will feel betrayed and aggrieved.
      We've had plenty of those.

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  5. Not a loophole. There must be room for negotiations. Engaging hundreds of owners is a very time consuming endeavour.

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  6. I would argue that, being entrusted with the responsibility of selling other peoples homes, SC has a moral imperative to engage, inform, update and be accountable to all owners. After all, this was what they did prior to reaching 80%. It's only after past that critical point that rogue SC behave badly.
    With todays technology it is not too bothersome. Indeed, not doing so would be irresponsible or worse, arouse suspicion.

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  7. Casting doubt on the SC honesty without evidence isn't fair. If 80% wishes to sell, the rest just have to suck it up. Otherwise change the Act.

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  8. Casting doubt on the SC honesty without evidence isn't fair. If 80% wishes to sell, the rest just have to suck it up. Otherwise change the Act.

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  9. Some updates for those who are interested: Raintree Gardens sale has been approved by STB on 8 Feb. The 2 Shunfu objectors have appealed the High Court decision. Appeal hearing some time in April.

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  10. Anonymous

    Any news regarding Shunfu Ville en bloc appeal court decision? The appeal court heard the case on 4th April 2017 (yesterday) at 5 pm.

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    1. Really? My info is that it's on next Wed 12th April 10am.

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  11. According to the Appeal Court Register of hearing dates, it's stated as 4th April 2017, Chamber 3 at 5 pm, but according to letters sent to residents of Shunfu Ville the date mentioned by you is correct.

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  12. Still no news of shunfu ville results?

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    1. Any news from shunfu ville results?

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    2. Anonymous09 May, 2017

      Court of Appeals dismissed the appellants case

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