SINGAPORE — The Court of Appeal has ruled that the former town councillors and its employees of AHTC, had acted in good faith when they awarded the contracts to their managing agent without an open tender.

This judgement has provided vindication for the Workers’ Party (WP) and its senior members from the various allegations thrown upon them since a suit was filed by an independent panel on behalf of the WP-run Aljunied-Hougang Town Council (AHTC) in 2017 to claim damages from them for breaching their fiduciary duties to the town council.

The WP leaders which include Mr Low Thia Khiang, Mr Pritam Singh and Ms Sylvia Lim, filed an application to the Court of Appeal in 2019 after they were found liable for the alleged losses suffered by the town council by High Court Judge Kannan Ramesh.

The appeal was then heard by a court of five judges in Feb last year and only had its judgement delivered today (9 Nov).

The claims filed in the suit centre around the award of four contracts for Managing Agent and Essential Maintenance Service Unit services to FM Solutions & Services Pte Ltd (FMSS),  the process by which payments were approved and made to FMSS and Mr Danny Loh who was acting as FM Solutions & Integrated Services (FMSI) and the award of contracts to various third-party contractors.

Lawyers of AHTC claimed that millions of improper payments were made by the town council to FMSS after it was appointed managing agent without a tender being called.

In its judgement, the Court of Appeal held that the town councillors and the employees had in fact acted in good faith for the award of contracts to FMSS.

Section 52 of the Town Council Act protects one from personal liability if one is to act in good faith. Therefore, the defendants do not have to pay damages for the claims against them by AHTC over the alleged improper awarding of contracts.

The Court of Appeal noted in its judgement that while they find Mr Low, Ms Lim and Ms How Weng Fan for not acting in good faith for the implementation of the payment process to FMSS and FMSI, the “control failures” only demonstrate the risk of improper payments.

Therefore, it asked the parties involved to file their submissions on the damage to be recovered, noting that the burden is on AHTC to prove that loss was indeed suffered.

The WP leaders had to appeal for funds from the public in Oct 2018 after they had paid over $600,000 in legal fees using their own money.

Over $1 million was raised from 6,155 individuals in just a short span of three days. The WP leaders closed the appeal as the amount raised substantially covers the legal fees required at that point in time.

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