The appeal made by majority owners of Regent Garden who opposed the collective sale of $34 million with Allgreen Properties was dismissed yesterday by the Court of Appeal.
On 15 May 2008, the appeal was filed by 23 out of the 25 majority owners of the project, who expressed their distress about the additional payments made by Allgreen, which amounted to $2 million. The money was given to six minority owners who declined the corporate sale in the first place.
After Allgreen received an order from the High Court, the appeal was filed on 16 April 2008, which obliged the majority owners to finish the purchase and sale of Regent Garden.
In January 2008, the sale on the grounds that the deal was not performed in good faith and the valuation was way below was rejected by Strata Titles Board.
On its decision, the majority owner’s appeal was dismissed by the Court of Appeal, stating that nothing on the law as well as in the arrangement between the seller and buyer that prohibited Allgreen to make extra payments to the minority owners.
It was also reiterated by the Court of Appeal that the existence of the Land Titles Strata Act was intended to defend majority owners against their wasteful bargain.
Davinder Singh of Napier and Drew, which represented Allgreen, also depended on the affidavit of Tan Tiong Cheng, the managing director of Knight Frank, who said, “It is also my experience that it is not uncommon for the developer to contribute to the payment of the premium to the minority owners to procure their consent to the collective sale”.
On whether the corporate sale was performed with honest intentions, the Court of Appeal just stated, “A purchaser does not owe any duty of care, much less duty of good faith, to a vendor of property in relation to the price of the property. The general principle is caveat emptor”.
The court concluded that the corporate sale committees that don’t need to see themselves in the same plight with regards to incentive payments can just have provision for the same contingencies by providing them in the sale and purchase arrangement.