AHTC appeal judgement: How a 9-year legal saga unfolded

SINGAPORE — The apex court largely exonerated senior Workers' Party (WP) leaders Low Thia Khiang, Pritam Singh and Sylvia Lim on Wednesday (Nov 9) in a long-winding case concerning the appointment of a managing agent for Aljunied-Hougang Town Council (AHTC) without an open tender.

With this, the judgement marks another milestone in a legal tussle that has spanned nine years, after the ruling People's Action Party first called into question the fact that WP had improperly appointed FM Solutions and Services (FMSS), a company founded by party supporters, in 2013.

FMSS was led by Ms How Weng Fan, a colleague from Mr Low's days in the WP-held Hougang Town Council.

Citing Section 52 of the Town Councils Act, in which a person acting for a town council is exempt from personal liability if they had "acted in good faith" when carrying out their duties, the court judged that the trio did not owe AHTC fiduciary or equitable duties.

This includes the appointment of FMSS as AHTC's managing agent.

However, the court said in its judgement that the members and senior employees are liable to AHTC for negligence in certain respects relating to its payments process.

Ms Lim was also not afforded protection by Section 52 for her negligence in a number of third-party contractor contracts. 

Here is a look back at how the case has unfolded over the years:

TIMELINE

May 2011: At the General Election on May 11, WP won the five-member Aljunied Group Representation Constituency and retained the single seat of Hougang. It formed AHTC. FMSS was set up on May 15.

Jan 2013: WP won the single seat of Punggol East in a by-election and folded it into its existing town council, which was renamed Aljunied-Hougang-Punggol East Town Council (AHPETC).

May 2013: During a parliamentary debate, People's Action Party MPs questioned the WP about a possible conflict of interest arising from the fact that FMSS was owned by WP supporters.

Feb 2015: The Auditor-General’s Office carried out an audit of AHPETC and found several lapses in governance and compliance. It was revealed that Mr Loh was also the secretary of the town council, with the power to co-sign cheques, while his wife Ms How was the general manager of AHPETC. Both husband and wife were longtime WP supporters. In a parliamentary debate that same month, PAP leaders accused the WP MPs of breaching their fiduciary duties. The opposition MPs denied the allegations.

July 2015: Mr Loh died after an accidental fall in Japan.

Sept 2015: WP lost Punggol East to the PAP in the General Election. AHPETC was renamed to AHTC.

Nov 2015: The Court of Appeal ordered AHTC to appoint accountants to fix lapses found by theAuditor-General’s Office.

Nov 2016: Accounting firm KPMG found “improper payments” worth over S$33.7 million to FMSS and FMSI.

Feb 2017: AHTC appointed an independent panel to review the findings of the KPMG report.

July 2017: The panel, on behalf of AHTC, filed a suit against the three WP MPs to claim back the money. WP said it would contest the suit.

Sept 2017: Pasir Ris-Punggol Town Council (PRPTC) also filed a suit against the three WP MPs for losses allegedly incurred back when WP ran Punggol East constituency.

Oct 5, 2018: The trial relating to the two suits began. It ended on Oct 30.

Jan 18, 2019: All parties filed their closing submissions to the court, summarising their arguments made during the trial.

April 9, 2019: PRPTC, AHTC and the WP MPs appeared in court to deliver their oral submissions. The MPs’ lawyers said the S$33.7 million claim was speculative — only S$15,710 was recoverable.

Oct 11, 2019: The MPs, town councillors and senior employees of the AHTC and FMSS were found liable for some of the claims made against them by the AHTC and PRPTC, in a judgement by Justice Kannan Ramesh.

Jan 3, 2020: Following the High Court judgement, the Government ordered AHTC to strip Mr Low and Ms Lim of authority from handling some financial matters, so as to prevent them from causing further irregularities.

Jan 17, 2020: AHTC said it would comply with the order to restrict powers of Mr Low and Ms Lim on some financial matters.

July 11, 2020: WP retains Aljunied GRC and Hougang in the 2020 General Election.

Aug 3, 2020: AHTC made a rare application to amend a statement of claim against WP MPs months after the case was decided, extending the claims of breaches of duty of skill and care to more town councillors. The court later rejected some of these applications as it might affect the judgement.

Feb 25, 2021: The Court of Appeals heard an appeal from multiple parties involved in the case, claiming that Justice Kannan Ramesh had erred in law and on facts in his 2019 decision.

Nov 9, 2022: The apex court released its judgement on the AHTC case that largely overturned the earlier High Court judgement, and found that the WP town councillors and senior employees do not owe AHTC fiduciary or equitable duties, and are only liable for negligence in certain respects.