Thoughts on the AGM

We apologise for the lack of updates since the AGM due to a technical glitch on our blog. But in the meantime, we received an email from a concerned resident who attended the AGM and wished for us to put the email on the blog. This concerned resident has raised pertinent issues.

"At the AGM on 7 June, John Lee and 2 other members of his collective sale committee (CSC) were elected as Management Council (MC) members, together with 2 others nominated by John Lee, presumably supporters of the en bloc sale.

This was a result of John Lee and the CSC gathering a large number of proxy votes. Thus, the new MC for the estate comprises of John Lee and 4 of his CSC members and supporters, i.e. 5 out of the total of 7 positions on the MC!

It should be noted that of those 5 nominated by John Lee and a Mr Soon (who was in the previous Pro-tem sales Committee), only John Lee and one other MC member, Ms Leesa Lovelace, actually attended the AGM - the others were all absent. And it appears that Ms Lovelace left the AGM before the elections were conducted. We only have John Lee's word that they had consented to their nomination for election to the MC.

If they did not even bother to attend the AGM (or in the case of Ms Lovelace, stay for the entire AGM), how much interest will they have in running and maintaining the estate in the best interests of the residents and subsidiary proprietors? How much attention will they pay to the needs of the estate?

Although an objection was raised by an owner at the AGM that there was a clear conflict of interest in having CSC members also sitting as members of the MC, this was brushed aside and John Lee and his CSC members and supporters were voted into the MC with the help of their proxy votes.

But, if I were one of John Lee's CSC members elected into the MC, I would be very hesitant indeed to take his word that there is no conflict of interest, just because he says so.

In fact, I would be rather concerned as to my own position. To an objective observer (as a court of law will be) it is very clear that the interests and duties of the CSC members are very different from, and clearly conflict with, those of the Management Council. If I were in their position, I would certainly seek independent legal advice on this point, before I get myself too deep into a hole.

And what hole would I be getting into? The CSC members would do well to bear in mind that they will have onerous contractual, common law and fiduciary duties to the subsidiary proprietors who sign the collective sale agreement as well as those who may become bound by it. At the same time, if they take up their positions as MC members, they will be subject to onerous statutory and common law duties owed to all the subsidiary proprietors who make up the MCST.

Each of them may therefore find themselves liable for damages to the subsidiary proprietors who sign the collective sale agreement, or to the subsidiary proprietors who comprise the MCST, or even to both sets of subsidiary proprietors, in respect of their actions and decisions while sitting on both the MC and the CSC.

They can be assured that their actions and decisions as MC and CSC members will be scrutinised very carefully, and that they will individually and collectively be held accountable for any breaches of their duties.

I hope each of them has the resources to meet such liabilities in the event that they arise, as these may well be substantial. In any event, they should consider their individual positions very carefully.

Thus, if I were one of them, I would not be too quick to celebrate my election into the MC. Now every decision made at CSC meetings as well as MC meetings will be fraught with peril, as the possibility of breaching one or the other of their conflicting duties and liabilities will always be present. John Lee may well have made the position of these CSC members untenable and certainly unenviable.

They can also be assured that there are subsidiary proprietors who are prepared to take them to the very last stage of legal proceedings in the event of any breaches or if any damages are suffered by subsidiary proprietors due to their actions or decisions while sitting as members of the MC or the CSC.

They should therefore not be too happy about having secured 5 out of the 7 positions on the MC, and think that with such an overwhelming majority, they can make decisions without due regard to their individual and collective duties and liabilities. Subsidiary proprietors will be watching their actions very, very carefully.

Finally, to those who gave their proxy votes to John Lee or other CSC members, I think you have done yourself, and the other subsidiary proprietors, a real dis-service.

You might think that having loaded the MC with CSC members and en bloc sale supporters will be advantageous to you. However, as mentioned above, that will not necessarily be the case, as it may do more harm than good.

And if you think about it carefully, what happens to your property value if the en bloc sale does not succeed in the end or is successfully challenged, and in the meantime, the MC has run down the estate deliberately or by inaction or negligence? Don't forget that John Lee has failed in his en bloc sale attempt made at the height of the property frenzy last year, and that the property market has soured considerably since then.

Even if you don't live here and have rented out the place or are keeping it for investment, your long-term rentals and investment value will be adversely affected. How will you recover your losses then, and who will you look to, to make good your losses?"

There is certainly a lot of food for thought raised by concerned resident.