Developers claim contract breach as owners seek ruling over validity of sale
A GROUP of home owners in Gillman Heights Condominium are being sued by the estate’s buyers for alleged breach of contract.
They face legal action by CapitaLand and Hotel Properties (HPL), which have agreed to buy the sprawling 607-unit estate in Alexandra Road.
The eight owners, who together own four units, had filed an application to the High Court last Monday. They want to know if a supplementary deal to the original collective sale agreement is valid.
The developers responded yesterday, claiming the action breached the owners’ contractual obligations, which includes an undertaking not to do anything detrimental to the sale process.
However, the owners argue that they need their question about the sale deal answered by the High Court before they can be said to have assumed such contractual obligations.
Their question stems from Gillman Heights’ unusually complex sale process, which involved two collective sale agreements. The original expired on June 22 last year, and a supplementary agreement was tacked on to extend it. Most majority sellers signed both; minority owners did not sign either one.
The eight owners being sued said they, and some others, signed the first deal but not the supplementary one.
They say they are caught in a unique position between the majority and minority owners. The group also claims that some of the signatures on the supplementary agreement came in after the deadline. If these tardy signings were excluded, the second agreement may not reach the required 80 per cent owners’ consent.
‘All they want is a judge to decide whether there was a valid extension or not, and if not, what are the consequences,’ said lawyer N.Sreenivasan of Straits Law, which is representing the eight owners.
‘Collective sales are in fact a form of compulsory acquisition, and even those who have signed the collective sale agreement have only agreed to tie themselves up for a fixed period of time.’
Mr Pang Tee Lian and his wife are among the eight owners facing legal action. Mr Pang, 59, said yesterday: ‘We know we’re fighting someone with very deep pockets, so we’re scared. But we’re also frustrated.’
‘In my mind, a collective sale is a win-win situation, with a happy seller and happy buyer. We’re not out to make an extra buck for the fun of it,’ added Mr Pang, a general manager at an architectural firm. ‘We just don’t know where we stand: Are we the majority or minority?’
In fact, groups representing both majority and minority owners have also clashed with CapitaLand and HPL, which last year agreed to pay $548 million for Gillman Heights.
At least one unhappy majority seller circulated letters among his neighbours earlier this year calling for a concerted action to invalidate the sale. CapitaLand
responded with a series of legal letters threatening to sue for breach of contract.
In the meantime, the condo’s minority owners want the High Court to overturn the sale, which got the go-ahead in December from the Strata Titles Board, the body that governs collective sales.
Their appeal hearing will take place next Monday.
This series of legal clashes is fast becoming an eerie echo of the prolonged tussle over the collective sale of Horizon Towers in Leonie Hill.
That struggle started last May after some majority owners tried to back out of the deal. They were subsequently sued by the buyers – which incidentally include HPL – while minority owners are now appealing against the sale.
‘We know we’re fighting someone with very deep pockets, so we’re scared. But we’re also frustrated…We just don’t know where we stand: Are we the majority or minority?’
MR PANG, explaining why he and seven other home owners filed the application to the High Court
‘Any extension must be very carefully scrutinised.’
MR N.SREENIVASAN of Straits Law, which is representing the home owners
Source: The Straits Times 21 Feb 08