Wednesday, 4 October 2023

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Court of Appeal holds Workers’ Party leaders Sylvia Lim and Low Thia Khiang liable for negligence; Pritam Singh cleared

SINGAPORE — In the most recent update on the long-running civil lawsuit over the alleged misuse of S$33.7 million (US$25 million) in town council funds, the Court of Appeal has found Workers’ Party leader Sylvia Lim and former party secretary-general Low Thia Khiang liable for negligence in the Aljunied-Hougang Town Council (AHTC) payments process.

The appeals were heard by a five-judge panel comprising Chief Justice Sundaresh Menon, Justice Judith Prakash, Justice Tay Yong Kwang, Justice Woo Bih Li and Justice Andrew Phang.

On the other hand, current Workers’ Party chief Pritam Singh has been cleared of all charges related to the same process.

In a pivotal shift from the lower court’s decision, an earlier judgement concluded that neither the Town Councillors nor the Employees owed fiduciary duties to AHTC or Sengkang Town Council after the Court of Appeal 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.

Instead, the Court of Appeal found the town councillors and employees liable under negligence, highlighting a significant divergence from the initial findings.

Breaking down the roles and responsibilities of the defendants, the Court extensively scrutinized their involvement in the case.

It was determined that Mr Pritam Singh, Mr Chua Zhi Hon, and Mr Kenneth Foo Seck Guan were not liable to AHTC for the control failures in the System.

“The amendments in respect of Mr Singh, Mr Chua, and Mr Foo were disallowed by the Judge because AHTC’s Statement of Claim did not allude to their roles in relation to the control failures in the System,” the judgement explained.

The Court agreed with the trial judge’s decision, which led to the conclusion that AHTC did not provide sufficient evidence that these individuals had approved or authorized the System.

Former AHTC Chairman, Ms Sylvia Lim, was found liable to STC in negligence for causing AHTC to award a contract to Red-Power Electrical Engineering Pte Ltd, having failed to discharge her burden of proof that she had acted in good faith when she chose not to renew the contracts with two other companies which offered the same services at significantly cheaper rates.

On the same note, Mr Low and Ms Lim were found liable to AHTC for negligence in allowing control failures in the System to occur. The judgement also found Ms How Weng Fan, the managing agent director, and her late husband, Danny Low, liable for the same negligence.

The Court of Appeal, in making these determinations, underscored its agreement with the Judge in rejecting attempts by AHTC to amend its pleadings after trial and before the Appeals were heard on the grounds that AHTC’s Statement of Claim did not adequately detail these individuals’ roles in relation to the control failures in the System.

The judgement brought a complete reversal for FM Solutions and Services (FMSS), the company initially found by the lower court to be liable for dishonest assistance and knowing receipt in regard to the First Managing Agent (MA) Contract and the first Essential Maintenance Service Unit (EMSU) Contract.

However, the Court of Appeal concluded, “In so far as the Judge found FMSS liable for dishonest assistance and knowing receipt with regard to the First MA Contract and the First EMSU Contract…those claims against FMSS must necessarily fail.”

Significantly, the court resolved that FMSS is not liable to either AHTC or STC in any respect, contradicting the lower court’s judgment.

The Court explained, “We have reversed the Judge’s conclusions on these points in their entirety, and FMSS is hence not liable to either AHTC or STC in any respect.”

When it came to addressing the question of apportionment, the judgement was clear. It stated, “There is no need to ‘apportion’ liability owed to the plaintiffs, and this court only needs to find, at this stage, which defendant(s) are liable to which plaintiff(s) for which claim(s). Any issue of apportionment of damages should be dealt with at the assessment of damages stage.”

Turning to the issue of costs, the court determined that the costs of the trial should be decided by the trial judge after damages have been assessed, considering the trial judge is better placed to assess the costs in light of the decision in the Appeals and the actual damages that may be assessed in due course.

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