AHTC lawyers reiterate in closing submissions town councillors acted 'in bad faith'

They highlighted the profits the managing agent made and attacked Sylvia Lim.

Belmont Lay | January 22, 2019, 11:42 AM

Lawyers for the Aljunied-Hougang Town Council (AHTC) filed their closing submissions on Friday, Jan. 18.

They called for the court to allow its claims of S$33.7 million from the eight defendants, with costs.

The closing submissions make for technical reading, as reported by Channel News Asia on Monday, Jan. 21.

The Shook Lin & Bok lawyers filed closing submissions numbering 156 pages.

The AHTC's lawyers reiterated their arguments that the defendants did not act in good faith and breached their duties of loyalty and fidelity by appointing FM Solutions and Services (FMSS) as agent without a tender for its first managing agent contract.

The defendants are Workers' Party MPs Low Thia Khiang, Sylvia Lim and Pritam Singh, as well as former AHTC town councillors Chua Zhi Hon and Kenneth Foo, and three other defendants, director and shareholder of FMSS How Weng Fan, and her late husband FMSS owner Danny Loh and FMSS itself.

They were taken to court in October last year for allegedly breaching their fiduciary duties.

1. Town councillors acted in "bad faith"

the town council’s lawyers said Low and Lim "acted in bad faith in their dealings with FMSS".

There was "an alarming picture of a lack of independent thought on the part of the town councillors", the plaintiffs' lawyers wrote.

"The town council was in effect just going through the motions and acting at the behest of Sylvia Lim and Low Thia Khiang."

Examples of how Lim and Low breached their duties were reiterated.

These included acting in the interests of the Workers' Party and its supporters and not in the best interests of AHTC; deciding to appoint FMSS without a tender before performing due diligence on the existing managing agent; and failing to disclose the shareholding of FMSS before awarding it the second managing agent contract.

The lawyers also said in their submissions that the argument that the defendants acted in good faith "cannot apply".

2. Highlighted FMSS profits

They did this by highlighting the surge in profits earned by FMSS.

The AHTC lawyers wrote: "A particularly disturbing consequence of the appointment of FMSS, and the fact that Ms How, Mr Loh and FMSS were effectively given carte blanche over AHTC’s payment process, was that FMSS enjoyed extraordinary profits in the period between 2011 and 2015."

This extraordinary profits was an increase of over 300 percent.

This left AHTC’s financial position "severely damaged", the plaintiff's lawyers wrote.

3. Highlighted conflicts of interests

The AHTC lawyers also set out their case that FMSS dishonestly assisted in the breach of fiduciary duties by entering into contracts "with full knowledge of the conflicts of interests in play".

FMSS' counterclaim against AHTC is the claiming of protection under its contract with AHTC, which the AHTC lawyers are telling the court to disregard.

But the AHTC lawyers pointed out that the defendants had not pleaded this counterclaim in court and "there would be no contract at all" if AHTC successfully rescinds the FMSS contracts as void in public law.

4. Focused on Sylvia Lim

The AHTC lawyers also called Lim “an evasive witness" and accused her as someone who "will not hesitate to concoct evidence" in order to "avoid making admissions under oath".

The attack on Lim also included the argument that she was “constantly attempting to side-step questions when confronted with the truth and the apparent unsustainability of her original answer".

This was done to "cover up her failings and the failings of the elected town councillors", the AHTC lawyers charged.

The case in brief

AHTC and Pasir Ris-Punggol Town Council (PRPTC) are suing the eight defendants over alleged improper payments involving millions of dollars.

They are also accused of breaching their fiduciary duties in the appointment of town council managing agent FM Solutions and Services (FMSS).

Parties will have up to the middle of February to file replies to each other’s submissions, before making oral submissions in person in March.

Defence closing submissions: