Workers' Party Members of Parliament (MPs) Pritam Singh, Low Thia Khiang and Sylvia Lim have been found liable for damages to the Aljunied-Hougang Town Council (AHTC), The Straits Times (ST) reported.

This verdict comes at the conclusion of the high-profile case involving some S$33.7 million that went to trial last October.

In its report, ST noted that "it is unlikely that the judgment will affect their position as MPs, as it arises from civil proceedings".

The case will, according to ST, now move on to a second round of hearings to assess the extent of damage to the town council, and the amount that can be recovered from the MPs.

Should the WP MPs be unable to pay up, they will be declared bankrupt and lose their seats in parliament.

Breach of duties resulted in payment of S$33.7 million

In his judgement delivered on Friday (Oct. 11), High Court Justice Kannan Ramesh reportedly said Low and Lim had breached their fiduciary duties to AHTC as they had acted for "extraneous purposes", while failing to do so for the town council's best interests.

As for Pritam, Kannan reportedly added that while he was not found to have breached his fiduciary duties, he was found to have breached his duties of skill and care to the town council.

Kannan also noted that all three MPs had "collateral motives" in having the managing agent FM Solutions & Services (FMSS) appointed without tender and they were involved "from the beginning" to effect the process.

Kannan said, according to Today:

"Their conduct was improper and the attempt to cloak the same with a veneer of truth and credibility collectively leads to the conclusion that they had not acted honestly and therefore breached their duty of unflinching loyalty to AHTC as fiduciaries."

This resulted in FMSS being paid S$33.7 million from July 2011 to July 2015.

At that time, Pritam had been a member of the town council's committee for tenders and contracts while Lim had been the town council's chairman, with Low as the secretary-general of WP.

Defence: Only S$15,710 of the S$33.7 million is recoverable

During closing oral submissions in April, Senior Counsel Chelva Rajah, who is representing the three WP MPs and two town councillors, stated that only S$15,710 of the lawsuits’ claim of S$33.7 million was recoverable.

Additionally, roughly S$32 million had not been found by accounting firm KPMG to be improper payments.

It was also not possible to determine which of the payments ought to be recovered, Chelva’s team wrote, citing a statement made by KPMG executive director Owen Hawkes’ on the stand.

Chelva also pointed out Section 52 of the Town Councils Act.

The act stated that no suit or legal proceedings shall lie personally against any member, officer or employee of a Town Council for anything done “in good faith”.

He said: “That’s what my clients had been doing in this case — trying to do their best out of a difficult situation.”

He added that town councils are of “a political nature and are intended to be managed by the elected MPs with as much latitude as possible within the broad and general rules laid”.

Plaintiffs: Case of political opportunism

Meanwhile, the plaintiffs, Pasir-Ris Punggol Town Council (PRPTC), and an independent panel that had been appointed to help AHTC recover allegedly improper payments, stated that the case was one of political opportunism.

Senior Counsel Davinder Singh, in representing PRPTC, stated:

"What emerges is a very disturbing picture of political opportunism. It is one thing to leverage on your own merits and strengths to advance your political cause. It is another to use the hard-earned monies of innocent residents to improve your political standing and to score political points."

David Chan, the plaintiff's lawyer representing AHTC’s independent panel, also added that the payment system to FMSS had been established with no oversight, which resulted in auditors being unable to determine what the improper payments amounted to.

The case in brief

AHTC’s lawsuit was initiated by an independent panel that had been appointed to help AHTC recover allegedly improper payments.

The panel included senior counsels Philip Jeyaretnam, N. Sreenivasan and KPMG managing partner Ong Pang Thye.

AHTC sued a total of eight defendants, chief of whom being WP leaders Pritam, Low Thia Khiang and Sylvia Lim, over alleged improper payments involving millions of dollars.

They were also accused of breaching their fiduciary duties in the appointment of FMSS as their managing agent.

The trial lasted for 17 days in October 2018.

Top photo via In Good Faith blog