In rebutting the allegation against his clients of making “improper payments” to the Aljunied-Hougang Town Council (AHTC)’s service providers, Senior Counsel (SC) Chelva Retnam Rajah pointed out that the town councillors had chosen LST Architects over Design Metabolists (DM) despite having to fork out an additional S$2.8mil for the former, as the latter had shown signs of potentially reneging on the fee that was originally agreed upon.
SC Rajah revealed in court on Tuesday (9 Oct) that the three Workers’ Party (WP) Members of Parliament (MPs) — former secretary-general Mr Low Thia Khiang, current secretary-general Mr Pritam Singh, and chairperson Ms Sylvia Lim — did not continue to pursue DM’s services, as the architectural firm had asked for “more than double” the amount originally agreed upon eight years ago.
The re-negotiation of the fee — from the equivalent of 3.5 per cent of the works to 7.5 per cent — came about after WP took over AHTC’s management. Prior to WP’s takeover of the town council, the People’s Action Party (PAP) had awarded DM a S$7.8mil tender to rejuvenate the Eunos Spring neighbourhood.
In his cross-examination of audit firm KPMG’s forensic partner Mr Owen Hawkes, SC Rajah said: “It may well be that DM was not prepared to carry out works at a fixed fee, and (would seek) to renegotiate… It had certainly happened before.”
The accountant, who had determined the payments made by the WP MPs to be “improper,” said during the cross-examination that according to the Town Council Financial Rules, AHTC had an obligation to opt for DM due to the lower cost in comparison to LST, barring “exceptional circumstances.”
Mr Hawkes added that he was not made aware of DM’s track record in detail, and that he was only told that DM was “being slow,” which he suggests is in line with what he had detailed in the KPMG report, stating that AHTC had noted that DM was “busy” with two “slow-moving” neighbourhood renewal projects.
Mr David Chan, the lawyer representing an independent panel acting on behalf of AHTC, argued that SC Rajah was not presenting the pleaded defence that he had earlier declared, which was that LST Architects was “significantly more efficient”.
Mr Chan suggested that SC Rajah had contradicted himself during the cross-examination: “(And now) he is suggesting that DM will be more expensive than LST if given another chance to tender.”
SC Rajah responded that the burden of proof rests upon the plaintiff — that is, AHTC — and not the defendants, with regards to the loss potentially incurred should the town councillors proceed with DM’s services.
Justice Kannan Ramesh questioned SC Rajah’s assertion, saying: “You can’t rely on what happened in 2010 […] as indicative of how (you) would have reacted to a particular transaction.”
SC Rajah, in response, reiterated that this was not a one-off event, and that DM had previously charged a “much higher fee” than it had initially quoted.