Gillman en bloc sale to proceed

Gillman en bloc sale to proceed

Judge says minority owners did not provide adequate reasons to stop sale

 

THE High Court has dismissed an appeal by minority owners of Gillman Heights Condominium to stop its en bloc sale.

 

This means that the $548 million sale of the development to CapitaLand, Hotel Properties and two private funds is set to go through.

 

Justice Choo Han Teck, in his judgment yesterday, said that he was ‘satisfied’ that the appeal by the minority owners ‘must fail’, as they did not provide adequate reasons as to why he should stop the sale.

 

The Strata Titles Board (STB) had approved the collective sale of the 607-unit, 99-year leasehold estate late last year. But a group of minority owners, represented by Senior Counsel Michael Hwang, had appealed that decision.

 

They argued that the STB had erred in approving the sale. They said that collective sale rules do not apply to Gillman Heights, which is an former HUDC estate. They also argued that insufficient notices were put up informing owners of the proposed sale and that the collective sale agreement – signed by the consenting owners – was not validly extended before the deal was brokered with the CapitaLand consortium.

 

Justice Choo ruled yesterday that the law does not mean to treat privatised HUDC estates differently from other private strata developments with a management corporation. He said that a privatised HUDC estate can participate in the benefits of an en bloc sale if the requisite conditions are met. He also agreed with the STB’s ruling that sufficient notices had been posted and that the collective sale agreement had been validly extended.

 

The minorities had also argued that the sale was done in bad faith. They said that the National University of Singapore (NUS), which owns a sizeable chunk of Gillman Heights and had agreed to the en bloc sale, has a 15 per cent stake in Ankerite, the entity that purchased Gillman Heights.

 

Justice Choo noted yesterday that NUS’s relationship with the buyer – which came to light after the STB approval – was not presented before the STB at the relevant time. ‘A court deliberates only on the basis of the evidence before it,’ he said. He said that it was strictly up to the STB to judge if there was an act of bad faith by reason of the relationship between NUS and Ankerite – but that he was not persuaded that the board should hear the issue again.

 

Justice Choo also agreed with the STB that there was no bad faith regarding the sale price of Gillman Heights, as it was $20 million above the reserve price.

 

The minorities had also argued that one of the STB board members, Michael Ng of Savills (Singapore), was a real estate valuation professional who had worked on projects involving the consenting owners’ lawyers.

 

But Justice Choo said: ‘I am of the view that it is too tenuous an objection. Professionals cannot avoid working on the same projects. It does not follow that they necessarily agree or have reasons to be biased or prejudiced against other professionals.’

 

Gillman Heights owners will get between $870,000 and $950,000 per unit in the en-bloc sale. But many of those objecting to the sale say that it is more important for them to be able to keep their homes.

 

Source: Business Times

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