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Thread: Regent Garden enbloc deal: majority owners lose appeal

  1. #1
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    Default Regent Garden enbloc deal: majority owners lose appeal,00.html?

    Published May 30, 2009

    Regent Garden enbloc deal: majority owners lose appeal


    THE Court of Appeal yesterday dismissed an appeal by the majority owners of Regent Garden who oppose a $34 million collective sale deal with Allgreen Properties.

    The appeal was lodged on May 15, 2008, by 23 of 25 majority owners of the 31-unit project, who were unhappy that Allgreen made extra payments totalling $2 million to six minority owners who initially opposed the collective sale.

    The appeal was lodged after Allgreen obtained an order from the High Court on April 16, 2008, compelling the majority owners to complete the sale and purchase of Regent Garden.

    Four months earlier in January 2008, the Strata Titles Board rejected the sale on the grounds that the valuation was too low and the deal was not done in good faith.

    In its judgement, the Court of Appeal dismissed the appeal of the majority owners, saying that there was nothing in the agreement between buyer and seller, or the law, to prohibit Allgreen making additional payments to the minority owners.

    The Court of Appeal also reiterated that the Land Titles Strata Act exists to protect minority owners and not to protect majority owners from their own 'improvident' bargain.

    Allgreen, represented by Davinder Singh of Drew and Napier, also relied on an affidavit of Knight Frank managing director Tan Tiong Cheng which said: 'It is also my experience that it is not uncommon for the developer to contribute to the payment of the premium to the minority owners to procure their consent to the collective sale.'

    On whether the collective sale was done in good faith, the Court of Appeal said: 'A purchaser does not owe any duty of care, much less duty of good faith, to a vendor of property in relation to the price of the property. The general principle is caveat emptor.'

    In its concluding observations, the court said collective sales committees that do not want to find themselves in a similar predicament vis-a-vis incentive payments can easily make provision for similar contingencies by providing for them in the sale-and-purchase agreement.

  2. #2
    mr funny is offline Any complaints please PM me
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    Default Regent Garden majority owners' appeal rejected

    May 30, 2009 Saturday

    Regent Garden majority owners' appeal rejected

    They were upset over buyer's $2m 'side deal' with 6 minority owners

    By Joyce Teo

    ONE of Singapore's most unusual collective sale disputes, over Regent Garden, has been settled by the Court of Appeal even though the sale has been done and dusted for 12 months.

    In a strange twist, a total of 23 out of 25 majority owners of the West Coast Road condo had opposed the sale even though they initially supported it.

    One of the reasons: They were upset that buyer Allgreen Properties had paid six minority owners a total of $2 million in a 'side deal' to share among themselves in return for withdrawing their objections to the $34 million sale.

    Yesterday, the Court of Appeal dismissed an appeal seeking clarification on this point, saying such payments are not prohibited. 'We acknowledge that the practice of some developers in making direct payments to minority owners to secure their consent can be potentially divisive and may even sometimes be ethically challenging,' it said in its judgment. 'This, nevertheless, does not mean that the law, as it now stands, prohibits such incentive payments.'

    The High Court had ruled in April last year - before the project's May sale completion - that the sale of the 31-unit Regent Garden to Allgreen must go ahead.

    The majority owners also wanted to know if the minority owners are entitled to retain the extra payments without sharing the sum with them.

    Allgreen issued a statement saying it was an 'unprecedented and curious case' of a collective sale being opposed by the majority who had initially agreed to sell.

    Although the majority owners had opted for a fixed $34 million price, they were unhappy that a development charge payable by Allgreen to the authorities turned out to be much lower than expected. The majority owners then sought to renege on their agreement, after finding out about the side deal. Before the High Court, they had complained that because Allgreen had paid extra sums to the minority, the sale price to the majority owners was too low. They refused to complete the deal, until ordered to do so by the High Court.

    The Court of Appeal said the sale committee sowed the seeds of its unhappy predicament when, to save $11,000, it made a deliberate decision not to accurately ascertain the development baseline of the property. 'Since they opted to seize and keep the proverbial bird in the hand, it is only just that they cannot now be allowed to complain that the bird is not what they thought it was,' said its judgment.

    Credo Real Estate managing director Karamjit Singh said the practical lesson is that the sale committee must ensure it has all important information needed before selling a property collectively so as not to under-sell it.

    The Regent Gardens case was also unusual in that it went to the Strata Titles Board, which heard the merits of the case and threw it out even though there were no objections.

    Allgreen was represented by Senior Counsel Davinder Singh of Drew & Napier while the majority owners were represented by Senior Counsel Molly Lim.

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