WP MPs, PRPTC to appeal against High Court judgement in AHTC case

Three Workers’ Party (WP) Members of Parliament (MP) – Sylvia Lim, Pritam Singh and Low Thia Khiang – and the Pasir Ris-Punggol Town Council (PRPTC) have appealed against a High Court judgement in which the WP MPs were found guilty of breaching their duties as the Aljunied-Hougang Town Council (AHTC) town councillors.

A Supreme Court spokesperson told The Straits Times on Mon (11 Nov) that all the defendants – including the WP MPs – and PRPTC have filed their appeals against the judgment.

Lim, the chairman of WP, told CNA on Mon that the court had accepted their appeal notice, which was filed by acting solicitors for the WP MPs and two other town councillors in the case.

She also told Parliament on Tue last week during a motion urging her and Low to recuse themselves from AHTC’s financial matters regarding their intention to file an appeal against the High Court judgement.

The motion calling for AHTC to require Lim and Low to “recuse” themselves from financial matters was passed in Parliament on Tue (5 Nov).

After a lengthy debate of more than four hours over the motion, 52 MPs stood in support of the motion and nine WP MPs voting against it. There were two abstentions by Nominated MPs Anthea Ong and Walter Theseira.

The current parliament has 82 PAP MPs, 9 WP MPs and 9 NMPs.

Deputy Prime Minister Heng Swee Keat in his opening address of the debate, called on the WP to “take action” in light of the recent judgement which the party was accused of misusing of town council funds. He also accused the party of not having to account for their dishonesties and untruths.

“All that this House is asking, is for Ms Sylvia Lim and Mr Low Thia Khiang to recuse themselves from dealing with or having oversight over financial matters, until the court case is concluded,” said Mr Heng who is also the Finance Minister and First Assistant Secretary-General of the People’s Action Party, adding that “this is the least they can do” given the court’s findings.

Lim asserted that Heng had acted “prematurely” in his decision to file the motion and called upon the House to reject it.

Singh concurred with Lim, and said that there is “no reason for Parliament to be prematurely hijacked as a substitute for the judicial process”.

Second Minister for National Development Desmond Lee, in justifying why the motion should be passed, pointed to the findings of the High Court judgement during the debate.

He said that that the WP town councillors had been dishonest and acted for the benefit of their managing agent FM Solutions and Services by allowing them to charge a higher rate of MA fees than they should have, allegedly due to their personal ties as friends.

“It therefore comes as no surprise that the High Court had found the defendants to be in breach of [their] legal duties, including the fiduciary duties of loyalty owed to the Town Council,” said Lee.

Lim rebutted Lee by asking him if he agreed with the fact that the High Court judge did not find any breach in the TC’s award of the second contract to FMSS, and if he agreed that there has been no preceding case law similar to the AHTC case.

Lee, in response, reiterated that while he somewhat agreed that the case is novel in terms of jurisprudence, he believed that the scope of responsibility and standard for MPs should be the focal point in the matter.

In a turn of events, the Minister later clarified that he did not refer to the court’s judgement, but to the auditor’s findings, after Lim emphasised that he has not answered her first question.

“What I was highlighting is the auditor’s reports … I didn’t mention the court judgement,” said Lee.

Low and Lim’s breach of fiduciary duties evident in waiver of tender leading to the award of the first MA contract to FMSS: Justice Kannan Ramesh

The High Court on 11 Oct found the WP MPs liable for damages against AHTC and PRPTC.

Judge Kannan Ramesh, in his written judgement, ruled that Lim and Low as town councillors had acted in breach of their fiduciary duties to AHTC.

He reasoned that such breach of fiduciary duties was evident in the waiver of tender leading to the award of the first managing agent (MA) contract to FM Solutions & Services (FMSS).

The waiver, said the judge, was “not justified under the Town Council Financial Rules (TCFR), and that subsequently, Lim and Low had “failed to act in AHTC’s best interests and had acted for extraneous purposes”.

“The evidence shows that there was a clear plan for FMSS to replace the incumbent MA CPG regardless of CPG’s intention as regards the existing MA contract, and that this decision was made by Ms Sylvia Lim and Mr Low Thia Khiang shortly after the 2011 General Elections,” said Justice Kannan.

“There was no urgency of circumstances that would have justified the waiver of tender, particularly since CPG was contractually obliged to continue serving as the MA under the existing MA contract, and the defendants should have held CPG to that contractual obligation, at least for such time as was necessary for a tender to be called,” he added.

The judge also stressed that the TCFR does not permit such waiver “except in very special circumstances”, and said that it was “clear” to him that “other alternative solutions had not been explored in this case before tender was waived”.

“This was because the sole objective was for CPG to be replaced as MA by FMSS,” he said, pointing out that Low’s “own evidence” had demonstrated “the real reason” behind the waiver of tender.

Low’s purported “distrust of CPG and other entities he perceived to be affiliated to the People’s Action Party”, in addition to his “sense of loyalty towards the staff of Hougang Town Council who risked being retrenched if CPG continued as MA of the expanded AHTC” were reasons cited by Justice Kannan behind Low’s move to waive the tender.

Commenting on Singh’s role in the case, Justice Kannan said that while “it cannot be said that he has breached his fiduciary duties to AHTC” based on the available evidence, the former had breached his “duties of skill and care” to the Town Council in relation to the award of the first MA contract.

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