Comment Revisited

Below is comment which was received in response to Mr John Lee's email. It makes good sense and so we have reproduced the comment as a blog post. It is something for us to think about.

"I have received this latest email from John Lee and wish to make two comments:

"What's past is past". I wish the past can be forgotten that easily. Many will remember a letter written by Mr Lee not so long ago, just before the changes in law. This letter stated that if a certain quota is not reached by a certain date, John will resign. Obviously, that quota was not reached and John did not resign. That, to me, made me cautious about the trustworthiness of some people who wish to collectively sell our homes. The past, indeed, remains in the present.

I think John is making an incorrect comparison between BGV and BGM in his email. His own search, which you can do on the internet (see link below) would reveal three prices, two for BGM and one for BGV. These are:

BGM - Sold Mar 09 (downturn) - $883psf
BGM - Sold Sep 08 (boom) - $1356psf
BGV - Sold Sep 08 (boom) - $1470psf

In fact, if we compare BGM and BGV sold AT THE SAME MONTH (Sep 08), you'll find not a lot of difference at all ($114psf or <>

In other words, I would think his point is more "due to market forces" of boom, since both BGV and BGM were sold at about the same value, REGARDLESS of the en-bloc sale. After all, if logically, the 'en-bloc potential' means offering better value for the buyer, then wouldn't the price difference between the two estates be more than 10%? In fact, if you look at previous sales values from 2000-2004 (link provided below), you'll find that prices for BOTH BGM and BGV have matched and doubled from 2004 to 2008, without the need for any en-bloc potential. Also, any prudent buyer knows that 'en-bloc potential' means very little nowadays, given that it takes time to complete the sale, especially if it goes through court. And even then, it is no longer a certainty that a sale will be confirmed without potentially severe legal consequences, as recent court cases highlighted.

I'd say that unless John has definitive proof that our units 'will plummet' if the en-bloc 'is dead', I'd think about the past, and consider that he has a strong agenda to keep the en-bloc sale alive whatever the cost. Otherwise, the statement sounds like a threat done in bad taste.

I would even suggest that it is the well-maintained estate that we have that makes a difference between BGM and BGV. Something that I hope the current MC will continue to do well, and not let the illusion that an en-bloc sale means you are entitled to run down the estate.

http://www.ura.gov.sg/realEstateWeb/realEstate/pageflow/transaction/TransactionController.jpf
http://www.redas.com/HTML/eProperty/transaction_search.asp
(You may need to copy and paste the various lines for URA and REDAS.)"

Thank you to the person for the research he/ she has done, especially with regards to the incorrect comparison that was done by Mr Lee which would otherwise be misleading BGV owners and SPs.

Email Received: Which hat is he wearing? And a Reasoned Response to Market Forces vs Enbloc Potential

We received this anonymous email, that we're posting here verbatim below, and someone submitted a comment which is a reasoned response to Mr John Lee's latest email with the BGM/BGV price comparison (under comments):

I’m confused when I received Mr Lee's recent letter about the AGM.

Firstly, he wrote that Mr Tan Lai Huat’s resolution was not approved by the council. Isn’t Mr Tan Tew still the chairperson of the management council? Since when did Mr Lee become the spokesperson for the entire council when he is only a member?

Secondly, he said that the resolution is an en-bloc matter and nothing to do with estate management and urged owners who support the en-bloc to pass him their proxies. He signed off his letter as Chairman, Collective Sales Committee (CSC) and the letter was sent using BGV En-bloc letterhead.

I’m confused:
Mr Lee firstly objected to the resolution because it is an en-bloc matter which should not be tabled at the forthcoming AGM and he seemed to be speaking on behalf of the council. But he then objected to the resolution because he asserts it is Mr Tan's "cunning way of killing off the current enbloc attempt."

So in what capacity is Mr Lee objecting in - as an ordinary Council member who is working on behalf of all owners to manage BGV or as Chairman of the CSC who is working to sell off the estate?

The answer seems quite clear. And what is the view of the MC Chairperson on this matter, or has Mr Lee taken over this other committee too?

Time to take Action

Dear Fellow Owners and Residents of BGV,

Mr Lee sent an email to some owners on 10 June and later by post, the same email was sent to all owners on 11 June. Mr Tan was forwarded Mr Lee's email on 10 June itself and he responded to Mr Lee's email in his letter which has now been sent to all owners and residents of BGV on 11 June. Below is Mr Tan's letter (which was written before Mr Lee's email came in through the post) in response to Mr Lee's email dated 10 June. Mr Tan's letter is reprinted with his consent.

11 June 2009

Dear fellow owners,

Please give this letter your urgent attention, as it involves your interests as a subsidiary proprietor of Botanic Gardens View.

I have just been forwarded a copy of an e-mail from John Lee dated 10 June 2009. This e-mail appears to have been only sent to selected owners, and not to all. In fact, it was not even sent to me, even though several questions raised by John Lee in it are, somewhat misleadingly, directly addressed to me. I am not sure if the selected owners who were sent this e-mail were aware that it was not even sent to me in the first place.

As John Lee's e-mail deals with a resolution which has been tabled for the upcoming AGM on 20 June 2009 pursuant to my request made in June last year, and which I strongly feel is in the interests of all subsidiary proprietors, I have set out his e-mail in full below, with my responses set out in italics below the relevant paragraphs.

In summary, I feel it is in the interest of every subsidiary proprietor to be protected from any liability or damages which may be caused by the actions or inactions of the collective sale committee, by getting an indemnity from the collective sale committee. Otherwise if anything adverse happens, we as subsidiary proprietors will have to bear the consequences ourselves. The Horizon Towers case is a case in point. There, through no fault of their own, the owners had to suffer months of legal proceedings and incur very substantial personal legal costs, without any contractual recourse against their collective sale committee.

My view is that if the collective sale committee wishes to impose a relationship under which they take on the power to sell my personal property, especially one as valuable as my apartment, the terms of such a relationship have to be very clearly set out and have to be acceptable to me, and should provide sufficient protection to me in case I suffer any liabilities or incur any obligations due to their actions or inactions in the course of that relationship. The same should apply to each and every subsidiary proprietor.

I would be grateful if you could take the time to consider this very important issue, which I believe affects your own interest as a subsidiary proprietor, and take the necessary action immediately:

John Lee's e-mail of 10 June 2009, and my response in italics

"Dear Owners of BGV,

I refer to the above resolution tabled by Mr Tan Lai Huat for our forthcoming AGM.

This resolution was allowed by the Managing Agent but not approved by the Council. The Council had its final meeting on 8th May 2009. This resolution was not surfaced at that meeting to allow the Council to discuss the merit of allowing this resolution at the AGM. Council Members only received an email from the MA informing them that this resolution will be included in the agenda after the meeting.

This resolution is a Collective Sale matter and has nothing to do with the Management of the estate. It should have been brought up at the appropriate forum. Also the subject matter of the resolution had been fully discussed and recorded in the last AGM (Appendix B in the current AGM Notice pages 10,11,12,13). It is a waste of members' time to rehash the whole issue once again."

Response:
By way of my e-mail dated 5 June 2008 (i.e. last year) to the Secretary and Chairman of the Management Council and to the Managing Agent, I had originally asked for this resolution to be circulated to all owners and tabled at the next duly-convened general meeting, This was pursuant to the relevant provisions of the Building Maintenance and Strata Management Act ("BMSMA").

However, the resolution was not circulated or tabled for the AGM last year or the EGM held on 23 August 2008, as the response from John Lee and the Managing Agent was that the EGM was convened by requisition of the en bloc collective sale committee ("CSC") and its supporters, and the BMSMA did not require such a resolution to be circulated and tabled for such EGM.

Having blocked the circulation and tabling of the resolution at that EGM, which would have been a good forum to discuss the issues raised, John Lee now says that this resolution should have been brought up at the relevant EGM and not at the upcoming AGM as it has "nothing to do with the Management of the estate"!

This is incorrect both factually and in point of law. Factually, because I had in fact asked for the resolution to be tabled last year, but was blocked from doing so. In point of law, because the BMSMA requires any resolution brought up by a subsidiary proprietor in accordance with the BMSMA to be duly circulated to all subsidiary proprietors and tabled at the relevant general meeting. It has taken more than one full year for the resolution to be circulated and tabled for consideration by the subsidiary proprietors.

Based on John Lee's arguments, this resolution would never be circulated or tabled at any general meeting at all, as it would not be tabled at an EGM requisitioned by the CSC, and neither would it be tabled at an AGM. In this case, it appears that the circulation and tabling of the resolution was not "approved" by the Management Council, but it should be noted that such approval is not required under the BMSMA as the process is mandatory.

It should be noted that the resolution was not "fully discussed" at the AGM held on 7 June 2008, and it could not have been so discussed, in the absence of the requisite circulation and notice of the resolution to all subsidiary proprietors. The Managing Agent has acted in compliance with the BMSMA to circulate and table the resolution for the upcoming AGM, for proper discussion and resolution by the general meeting.


"Mr. Tan's resolution requires the PERSONAL INDEMNITY, jointly and severally, of the Chairman and all the members of the Collective Sale Committee (CSC). This has never been done before in all en bloc sales in Singapore. Let me ask Mr. Tan this question "In all his (previous) career as a lawyer, has any of his clients requested him to give them an indemnity before he can act for them? If not, why is he requiring the CSC members who are all volunteers to give their indemnity?"

Mr Tan's resolution is a very cunning way of killing off the current en bloc attempt whilst we wait for the market sentiment to improve. If Mr.Tan and his anti-enbloc friends gather enough proxies and passes this resolution, all the CSC members will refuse to give in to this ridiculous request (for their personal indemnity) and will resign instead. This will effectively kill the current en bloc sale of our estate."

Response:
In my 20 years or so of legal practice prior to my retirement, I have never had a client ask me for an indemnity. This is because it was unnecessary - the relationship of solicitor and client is both a contractual and fiduciary one, and the law is clear on the duties, liabilities and obligations owed to the client in such a relationship. Quite apart from that, there is also mandatory professional insurance to protect the client in the appropriate circumstances.

However, the relationship between the subsidiary proprietors and CSC members is a very different one. For one, not all subsidiary proprietors agree to the the appointment of the CSC to act on their behalf to sell their apartments, or the terms on which the CSC members have appointed themselves, or the terms of the sale agreement itself.

Secondly, and more importantly, the parameters of the duties, obligations and liabilities of the CSC members to the subsidiary proprietors have not been clearly established in law, although the recent judgement of the Court of Appeal in the Horizon Towers case has gone some way towards clarifying the position.

Thirdly, even if the CSC members regard themselves as "volunteers", their actions create liabilities and legal obligations on the part of subsidiary proprietors, as they act on behalf of the subsidiary proprietors in a fiduciary as well as contractual capacity. This is especially so where the subsidiary proprietors sign the collective sale agreement (and even where the subsidiary proprietors do not sign the collective sale agreement, they may still become subject to it if so ordered by the Strata Titles Board).

In this respect, subsidiary proprietors should note that in the collective sale agreement, the CSC has not only refused to provide an indemnity to subsidiary proprietors, but have instead provided for the subsidiary proprietors to indemnify the CSC, as well as to excuse the CSC from their liabilities to the subsidiary proprietors! At the appropriate time, subsidiary proprietors should require these provisions to be removed and replaced by an indemnity in their favour, regardless of the outcome of the resolution in this case.

Personally, my view is that if someone wants to impose such a relationship under which he takes on the power to sell my personal property, especially one as valuable as my apartment, the terms on which such relationship are to be established have to be very clearly set out and have to be acceptable to me, and should provide sufficient protection to me in case I suffer any liabilities or incur any obligations due to his actions or inactions in the course of that relationship.

There are therefore good reasons to require an indemnity from the CSC members. Regardless of whether they regard themselves as "volunteers" or otherwise, their actions will create real liabilities and obligations on the part of the subsidiary proprietors. The facts of the Horizon Towers case speak for themselves. I am sure the subsidiary proprietors in Horizon Towers would have dearly loved to have had the protection of an indemnity from their CSC members, after having undergone many agonising months of legal actions and incurring substantial legal costs personally.

Just because something has never been done before does not mean that it should not be done in future. We should learn from the mishaps of previous en bloc sales and take the necessary action to protect our own interests as subsidiary proprietors.

If the consequence of the resolution being passed is that the CSC members will choose to resign instead of taking full responsibility for their actions, that is entirely a matter for the CSC members to decide. In terms of timing, as I have pointed out above, I had asked for this resolution to be tabled more than a year ago.


"Let us now examine Mr. Tan's resolution to see whether it is more bark than bite? As is usual with some lawyers, they love to pick on something insignificant and irrelevant and blow it up into something that can be potentially catastrophic. At the centre of Mr Tan's resolution is his gripe that the AGENDA for the first collective sale EGM held on 12th January 2008 was not properly drafted by a lawyer which could potentially lead to disastrous consequences as elaborated by him. I attach the relevant AGENDA of the 12th January 2008 Notice of EGM (Please refer to attachment 1). Mr Tan, please tell us which of the 5 Agenda items do you consider defective and could potentially be hazardous to those who sign the CSA. Let us be specific and tell us how and why? If you are not able to answer our simple question, then you are guilty of making a mountain out of a molehill and using scare tactics to prematurely bring an end to the work of the en bloc committee."

Response:
Whether there are appropriate grounds to challenge the original appointment of the CSC and the subsequent actions of the CSC are for a court of law to judge. My point has consistently been that if the collective sale is challenged and subsequently set aside, whatever the basis, then all subsidiary proprietors (and especially those who sign the collective sale agreement) should require that they have satisfactory protection from any liabilities and obligations which they may become subject to by reason of the collective sale and the actions of the CSC. If John Lee has full confidence that the appointment and actions of the CSC will be upheld in any event, then he should have no problem providing the indemnity to the subsidiary proprietors.


"Finally, let me urge all owners who support the ongoing en bloc effort to attend the meeting to vote against Mr Tan's resolution. If you are unable to attend the meeting, please give your proxy to me (see attachment 2) or anyone of the current CSC members (listed above). Please confirm with them that they are able to attend the meeting also.

With best wishes,
John Lee
Chairman,
Collective Sale Committee"

Response:
As in previous EGMs, John Lee is again seeking proxy votes to support his own interest in the collective sale. As I have mentioned, I have proposed the resolution primarily to protect my own interest, but I feel it is also in the interest of ALL subsidiary proprietors, whether you support the en bloc sale or not. I would urge you to please obtain your own legal advice on this, for your own peace of mind, and attend and vote at the AGM accordingly.

If you wish to support the proposed resolution, but are unable to attend the AGM or are unsure of your attendance, you may wish to appoint me as your proxy for this purpose, by depositing your duly-signed proxy form in the letterbox at Block x, #xx-xx by 17 June 2009 (as the deadline for depositing the proxy form with the Management Council is 2 p.m. on 18 June, 2009). If you do in fact attend the AGM, the proxy will automatically become void by law, and you will be able to exercise your own vote at the AGM.

In any case, please consider the issues carefully and take such action as you think fit to protect your own interests. Thank you for taking the time to read this.

Yours sincerely,

Tan Lai Huat

To reiterate Mr Tan's concern, regardless of whether you are for or against the BGV enbloc, we as subsidiary proprietors, should protect our own interests as no one, including the CSC members, can do that for us. The Horizon Towers case is a lesson for all of us. In Mr Tan's words, "We should learn from the mishaps of previous en bloc sales and take the necessary action to protect our own interests as subsidary proprietors".

It is time to take action.

Tags: bgv, botanic garden, botanic gardens, botanic gardens view, condo, en bloc, en-bloc, enbloc, collective sales, collective sales committee, csc, sales committee, AGM, EOGM, subsidiary proprietors