Horizon Towers owners ready to move on

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Horizon Towers owners ready to move on
</TR><TR>Some are considering more legal action but most are just glad that the case is finally over </TR><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Jessica Cheam
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The 199 owners of the 99-year leasehold estate would each have pocketed about $2.3 million, while the 11 penthouse owners would each have received $4 million to more than $6 million. -- ST PHOTO: JOSEPH NAIR
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Majority owners at Horizon Towers are considering their next step following last Thursday's surprise decision by the Court of Appeal to throw out the collective sale.
The owners will meet their lawyers on April 16 to discuss their options, including the possibility of suing the original sale committee for breaching its duties.
The committee bore the brunt of severe criticism in the Court of Appeal ruling.
It cited the committee's hasty agreement to sell Horizon Towers, its failure to follow up on a higher offer, and its negligence in not disclosing a possible conflict of interest.
This centred on two owners who bought additional units just before they were appointed to the estate's sale committee.
The ruling brings to an end the long saga of the collective sale of the Leonie Hill estate.
The sale was mooted in October 2005 and the owners agreed to a reserve price of $500 million the following year.
A deal was signed in January 2007 when the majority owners accepted a price of just below $850 per sq ft of gross floor area from Hotel Properties and its two partners.
The 199 owners of the 99-year leasehold estate would each have pocketed about $2.3 million, while the 11 penthouse owners would each have received $4 million to more than $6 million.
A series of court challenges followed. Some majority owners turned against the deal when they saw how the soaring market had made their sale price look like a giveaway.
The property market has since slumped.
A handful of the minority owners who objected to the sale fought their case all the way to the Court of Appeal.
Meanwhile, some residents had gone on to buy second properties on the assumption the deal would likely go through, and are now feeling short-changed.
But lawyers said that owners will find it hard to make a case in court as it was the individual's decision to buy before the sale was signed and sealed.
An owner who spoke on condition of anonymity said she had bought a second property because she thought she had to move out.
The housewife said she will live at Horizon Towers and will rent out the other flat.
She added that legal action against the sale committee was 'one of the options' some residents had talked about.
But they also felt the chances of success were slim because of certain clauses in the collective sale agreement which may indemnify the committee.
Then there is the question of cost.
Each majority owner has had to cough up $15,000 for legal fees so far, said the owner.
This puts the total cost for the 173 who signed the sale agreement at about $2.6 million.
As the minority owners won the case, it is likely that the majority owners will have to foot their legal bill too - reported to be about $1.5million for owners who fought all the way to the Court of Appeal.
Reclaiming some of these legal fees will be discussed at the April 16 meeting.
One sale committee member, Ms Mamata Kapildev Dave, said the committee will honour the court's decision and is now waiting for its ruling on how to award costs.
Another owner, Mr Bharat Mandloi, 50, spoke of the mood in the estate: 'The general feeling is people are tired of this. I don't think people are in the mood to point fingers. Everyone's thinking, 'Thank God it's finally over.'' [email protected]

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>No ill feelings over failed sale
</TR><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Shuli Sudderuddin
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Mr Mehdi will not sue the sale committee for not trying to get a higher price for Horizon Towers. He says: Whatever happened has happened for the best." -- ST PHOTO: SAMUEL HE
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Despite not knowing for almost four years whether the Horizon Towers collective sale would go through, resident Mohammed Mehdi is not bitter about the delay or the legal fees he has had to pay.
Even though the fees are 'substantial', Mr Mehdi, 54, a businessman in shipping, does not mind the outcome or the wait.
'We own some properties, so we could move any time if we needed to. Fortunately, the protracted pro-cess did not really inconvenience us,' he said.
'The court's decision also makes sense in view of the fact that the market went up in the middle of the sale.'
He felt that the sale committee had worked hard, and he could not find any fault with its members. He added that he would have been happy either way.
'If the sale had gone through, we would have gotten the money. But without the sale, I get to stay in my home. Where else will you find apartments of this size in such a convenient location?'
His family, including his brother and cousins, have been living in Horizon Towers for more than 10 years.
Originally from Pakistan, he came to Singapore in the 1980s and is now a permanent resident. His family chose the condominium because it is located centrally.
For the past two years, he has been living with his wife and three daughters in a rented fifth-floor apartment at Horizon Towers. He has a son who lives in Britain.
His family owns another apartment on the 14th floor that is being rented out to a banker. They bought it 10 years ago.
When the chance to sell the 14th-floor apartment collectively came, the family unanimously agreed to sign the agreement. They would have received about $2.3 million.
'We thought at the time it was a worthwhile deal, and consensus is what counts the most. We did not want to be in the minority,' said Mr Mehdi, who never tried to oppose the sale.
Asked about the possibility of the majority residents suing the sale committee for not putting in enough effort to sell Horizon Towers well, he replied: 'Why would we do such a thing? We already have to pay lawyers' fees, and this would just mean more money. Whatever happened has happened for the best.'

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Happy either way

'If the sale had gone through, we would have gotten the money. But without the sale, I get to stay in my home. Where else will you find apartments of this size in such a convenient location?' Mr Mehdi

makapaaa · Apr 5, 2009

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Mr Bharat Mandloi, who is on the condominium's management committee, says it now has a long list of things to decide on, such as building repairs.
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For four years, Mr Bharat Mandloi and his family put their renovation plans for their Horizon Towers apartment on hold because they were awaiting the results of the collective sale.
Mr Bharat, 50, the director of a commodity trading business, is glad that the whole 'roller-coaster ride' is finally over. He had bought the flat 15 years ago and rented it out while he was living abroad.
When the idea of the collective sale was raised in 2005, he was elected as a member of the sale committee. However, he dropped out of it about seven months later when he felt that it was in too much of a hurry to sell the estate and did not try for a better price in the soaring market.
Mr Bharat is a permanent resident here. His family relocated to Singapore from India in the 1990s but moved around the world before coming back here.
Relations between the residents remained very cordial during the three years or so when the collective sale was in limbo, he said. He remained in the group that wanted to sell the estate. He said that he and other owners were shocked at the Court of Appeal judgment.
However, Mr Bharat, who is now on the condominium's management committee, added that the mood is more of relief than disappointment. 'I've got lots of calls from other residents asking me: 'Is this it? Or do we still have to do some more to push for the sale?' I think we're all relieved it's over at last.'
Meanwhile, the management committee has a long list of things to decide on. 'Many things like building repairs and upgrades were pending while we were waiting for the judgment, so now we have to decide what we're going to do.'
The family did not buy another house as they felt the market was moving too fast. 'Now that we know it's not going to be sold, we're discussing whether we want to move or not. After all, it's a 30-year-old property.'
Shuli Sudderuddin

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>April 5, 2009
WHO WON, WHO LOST
</TR><TR>The majority sellers: Stuck with their units
</TR><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Fiona Chan
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When a group of Horizon Towers owners came together more than three years ago to discuss selling their estate en bloc, they had no way of knowing that they would end up among the biggest losers in the whole deal.
Owners Arjun Samtani, Wee Hian Siew, Henry Lim and Tan Kah Gee mooted a collective sale in October 2005 and kicked off the process. All four were eventually appointed to the sale committee, with Mr Samtani as chairman and Mr Wee as secretary.
By July 2006, they had launched the sale, formed a sale committee, appointed a marketing agent and obtained the necessary 80 per cent consensus from their neighbours for the sale.
But what the other owners did not know was that Mr Samtani and Mr Tan had bought extra units of Horizon Towers just a few months previously, relying on bank loans to do so, according to the Court of Appeal.
If the collective sale had gone through, each of the 199 owners of the 99-year leasehold condominium would have received about $2.3 million and the 11 penthouse owners, at least $4 million.
Now that the sale has failed, the owners who had wanted to sell their units are stuck with them in a plummeting property market. Some had even gone ahead and bought a second home on the assumption that the sale would succeed.
Mr Samtani and Mr Tan, with their extra financing burdens, are probably among the worst off. The other owners are also said to be considering the option of suing them and the other members of the original sale committee for breach of duty.

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>April 5, 2009
WHO WON, WHO LOST

</TR><TR>The majority-turned- minority: Mixed feelings

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In January 2007, a buyer was finally found for Horizon Towers in what seemed like a pretty good deal.
Unit owners were told, when they signed the collective sale agreement, that the reserve price of $500million would give them 80 per cent more for their apartments than if they were to sell them individually. At the time, the price would also make Horizon Towers the biggest collective sale in Singapore's history.
In any case, it looked as though the estate's owners did not have many options. The first four bids for the estate had all come in below the reserve price and the bidders refused to pay any more.
So when a consortium led by tycoon Ong Beng Seng's Hotel Properties agreed to pay $500 million, the sale committee rushed to seal the deal.
But even as the ink was drying on the collective sale agreement, the reserve price was losing its lustre as the property market emerged from its long slumber and roared back to life. With the values of individual units suddenly soaring, the collective sale premiums that had been promised to the owners started to disappear.
The committee was aware of this but decided not to go back and consult the owners as that would delay the sale, the Court of Appeal found. It also did not actively pursue another higher offer of
$510 million that had been made by a Hong Kong firm, Vineyard Holdings.
The Horizon deal started to look more and more unattractive to the sellers, especially when they realised that property prices were rising so quickly that a replacement home would cost much more than their collective sale gains.
Now that the sale has been scrapped for good, it is likely that these majority owners-turned-minority supporters have mixed feelings. While they get to keep their homes, they have missed out on the whole property boom.
Fiona Chan

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>The buyers: A good deal that turned sour
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While the sellers are probably bearing the brunt of the failed sale, the buyers - HPL, Morgan Stanley Real Estate and Qatar Investment Authority - are far from happy either.
The consortium thought it had bagged a good deal when it inked the deal to buy the estate for $500 million, or $800 per sq ft, at the start of the huge property upswing. Within six months of the sale, Horizon Towers' value had doubled on paper.
But the profits the buyers envisioned never materialised.
Instead, HPL and its partners found themselves dragged through legal brawl after legal brawl as owners who objected to the sale vigorously contested it.
HPL, a property and hospitality group, is run by Singaporean tycoon Ong Beng Seng. It was expected to develop a super-luxury block of apartments on the Horizon Towers plot. Indeed, soon after the purchase, HPL's stock price shot up as the luxury property market boomed.
But the sale kept running into snags. A mediation session was organised by the Strata Titles Board (STB) but failed to reach a satisfactory conclusion, leading to the formation of a formal STB tribunal. STB rejected the sale on a technicality, prompting the HPL consortium to sue the majority sellers for lost profits.
The majority sellers scrambled to fix the deal, taking the case up to the High Court. High Court judge Choo Han Teck threw out the STB decision to abort the sale in October 2007, leading the STB to finally approve it. The buyers' luck continued when the minority owners appealed to the High Court against the STB approval and lost.
But then the minority owners' last-ditch attempt to block the sale - culminating in the Court of Appeal judgment last Thursday - finally put the last nail in the coffin of the Horizon Towers deal.
Now the buyers are an estimated few million dollars out of pocket in legal fees - with no land to show for it.
Then again, in today's property slump, that may not be such a bad thing after all.
'Prices are back to about the 2007 level, which was when HPL closed the deal,' said Mr Nicholas Mak, director of research and consultancy at Knight Frank. 'Now that developers want to offload their assets and trim their debt, losing this site may be a blessing in disguise.' Fiona Chan

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Troubled Towers: A timeline
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October 2005: Some Horizon Towers owners moot idea of collective sale and kick off process.
March 2006: Two of them, Mr Arjun Samtani and Mr Tan Kah Gee, buy more units.
April 2006: Sale process formally launched. Within three months, the sale committee - which includes Mr Samtani and Mr Tan - obtains consent level for a sale.
May 2007: Some majority owners circulate a letter asking neighbours to band together to back out of deal.
August 2007: Strata Titles Board (STB) throws out collective sale. HPL sues majority owners.
January 2007: Hotel Properties Limited (HPL) and partners agree to buy estate for $500 million, or about $800 per sq ft (psf) of potential gross floor area.
April 2007: Neighbouring Grangeford Apartments sets a record asking price of $2,016 psf.

September 2007: Sale committee quits, leaving deal in limbo. HPL chief Ong Beng Seng meets owners to discuss sale, after which owners vote to extend sale deadline. About a week later, owners go to High Court to reverse STB's dismissal of the sale. HPL adjourns its suit against the owners.
October 2007: High Court judge Choo Han Teck overturns STB's ruling to abort deal. The majority owners go back to STB in second attempt to get approval for sale.
December 2007: STB approves sale this time around.

January 2008: Nine sets of minority owners appeal to High Court to overturn STB's decision. When hearing starts two months later, two sets of minority owners drop out.
July 2008: Justice Choo dismisses minority owners' appeal.
February 2009: Four of the remaining sets of minority owners make a last-ditch attempt to save their homes by taking the fight up to the Court of Appeal. April 2, 2009: The Court of Appeal, comprising Chief Justice Chan Sek Keong and Judges of Appeal Andrew Phang and V.K. Rajah, finally rejects sale for good, noting various errors by the sale committee, STB and High Court.

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Minority owners: Sweet victory but 'no winner'
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The epic legal tussle over the $500 million collective sale of Horizon Towers finally ended last Thursday with the Court of Appeal's decision to dismiss the deal.
This final judgment marks the first time Singapore's highest court has decided in favour of minority owners in a collective sale dispute.
While the four sets of minority owners who took their battle all the way to the end are jubilant about their victory, not all the other parties are as satisfied.
In the time that it took to wrap up the Horizon Towers saga, the property market has gone through its biggest boom and a record bust.
Owners of the condominium in Leonie Hill are now sitting on units that are losing more of their value every day in this recession.
They have also spent millions of dollars on the court case, which dragged on for 21/2 years.
When everything is said and done, who are the real losers and winners of Singapore's longest collective sale battle?

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Never has a group of minority owners successfully managed to block the collective sale of an estate, until now.
As the landmark decision by the Court of Appeal sinks in, celebration is in the air for those owners of Horizon Towers who never wanted to sell their units to begin with. 'For us, the price was never an issue,' said Ms
J. Tan, who had objected to the collective sale from Day One.
It has not been an easy battle.
When one of the minority owners, Mr Hendra Gunawan, tried to find a lawyer to help him and his neighbours block the sale in 2007, three firms turned them down before Harry Elias Partnership agreed to represent them. Although 33 owners out of the 210 in total objected to the sale, only nine filed an official objection with the Strata Titles Board (STB).
Besides Mr Gunawan and his wife, the minority owners who fought on to the end were Mr Rudy Darmawan, Madam Ong Sioe Hong and Mr Ng Eng Ghee.
Mr Gunawan, an Indonesian who has lived in Horizon Towers with his wife and two sons for eight years, runs his family's business back in Indonesia. Mr Darmawan, another Indonesian, is believed to be an executive at a multinational corporation.
Madam Ong is the managing director of department store Metro and the sister of Metro Holdings boss Jopie Ong. She, her husband and their two sons have lived in Horizon Towers for more than 20 years.
Mr Ng is a retired property developer and is listed as a director in firms such as Hi-Rise Builders and Bideford Realty.
The first victory for the minority owners came in August 2007, when the STB unexpectedly rejected the sale of Horizon Towers on the technical ground that the sale application did not contain all the required documents.
High Court judge Choo Han Teck disagreed with the decision, saying the technical errors were not serious enough to halt the sale. In December 2007, the STB gave the green light for the collective sale.
This only spurred the minority owners to renew their fight and take it to the Court of Appeal.
Last Thursday, after more than two years of legal wrangling and over $1 million in legal fees from their own pockets, the minority owners finally got the decision they had been waiting for - and made history in the process.
But Mr Gunawan said that there is 'no winner' in the whole process, which 'dragged on too long'. 'We are just protecting our homes,' he said. 'It's so tiring. The money we spent, we don't know whether we can get it back.'
The court has yet to award costs, but it is likely that the majority owners will have to pay a portion of the minority owners' legal fees.
Fiona Chan

makapaaa · Apr 5, 2009

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>The lawyers: 21/2-year bonanza of billable hours
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The team from Harry Elias law firm which represented the winning minority owners: (From left) Lawyer Kylie Peh, partner Philip Fong, Senior Counsel K.S. Rajah and partner Justin Chia. -- PHOTO: STEPHANIE YEOW
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It was not just the property industry which closely followed the Horizon Towers saga: Legal eagles could not take their eyes off the drama either.
After all, some of the biggest names in Singapore's legal fraternity were assembling in the same courtroom to slug it out over the sale of the estate.
No fewer than six Senior Counsel and virtually all the major law firms here joined in at various points in the protracted legal wrangle, which added up to a cool 21/2 years' worth of billable hours. Some estimate that the lawyers' bills would come up to at least $4 million.
The majority sellers as a whole were represented by a team from Tan, Rajah and Cheah led by Senior Counsel Chelva Rajah.
A different group of 13 majority sellers was represented by Senior Counsel Andre Yeap from Rajah and Tann.
Some of the unhappy majority owners who regretted signing the sale agreement hired Wong Partnership to advise them.
Former Senior Counsel and current Law Minister K. Shanmugam also made an appearance, heading the Allen & Gledhill team representing the estate's buyer, the HPL consortium. In fact, Mr Shanmugam's last submission in court was for Horizon Towers - which also means he lost his last court case.
The four minority owners who fought all the way had Harry Elias Partnership, which fielded Senior Counsel K. S. Rajah, partner Philip Fong, and its own founder, Senior Counsel Harry Elias.
Another minority owner, Ms Jasmine Tan, was initially represented by Mr Tan Kok Quan but later decided to go it alone.
Yet another minority owner engaged Phang & Co, which brought in Senior Counsel Michael Hwang.
Law firm J. S. Yeh & Co also made a surprise appearance on behalf of a majority owner.
So just how much have all these lawyers reaped from the battle?
The law firms would not disclose their fees, but it is understood that the 173 majority owners have already paid up to $15,000 each, or about $2.6 million in all.
Ms Tan has said her group of three minority owners coughed up about $1.5 million in fees. Legal experts say the fees for the buyers probably amounted to a few million dollars.
Then there are the conveyancing fees charged by Drew & Napier, which handled the collective sale.
The court has yet to decide who will pay the costs of the appeal, but one thing is for sure: In this epic court battle, the biggest winners are the lawyers.
Fiona Chan

Horizon Towers owners ready to move on

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