The fractious collective sale of Gilstead Court has hit more trouble with a breakaway group from the sales committee asking the High Court to remove financial penalties aimed at minority owners.
Four members of the seven-man committee, including treasurer Choo Liang Haw, filed documents with the court on Monday, escalating what has already been one of the most fractious collective sales in years.
The dispute centres on penalty clauses the collective sale agreement had imposed on the five dissenting owners at the estate in Newton.
These clauses could cost the five owners up to $26,000 each, a prospect that led them to file an objection with the Strata Titles Board (STB).
This triggered mandatory mediation but that failed last month after the sales committee could not agree to remove the clauses from the sales agreement.
That prompted the board to place a stop order on the deal.
The sales committee now has to apply to the High Court to have the collective sale approved. The Straits Times understands that it has until Monday next week to do so.
The division among the committee that arose during the mediation process appears to have led to Monday's court application.
The clauses state that the 43 owners who consented to the collective sale should contribute $2,000 out of their own pocket to a common fund for procedures related to the sale effort.
This sum would be refunded with 12 per cent interest once the sale has been completed.
But the minority owners would have $4,000 deducted from their share of the sale proceeds and shared equally among the 43 consenting sellers.
Other clauses state that the minority owners will have to stump up costs related to the STB approval proceedings.
Typically, costs related to legal proceedings of a collective sale are borne by all owners.
An application to the STB is not needed if all owners consent to the transaction.
The 163-page document filed by the four committee members said that the minority owners had offered to sign the agreement in June as long as the penalising clauses were removed. This would have eliminated the need for an application to the board.
But their proposal was turned down by the committee secretary, former Supreme Court judge Warren Khoo, according to the court document.
Mr Khoo, who had drafted the sales agreement, told the minority owners by e-mail that the clauses were aimed at promoting the principle of equality in the sharing of benefits.
The court documents also stated that minority owners would have to fork out about $26,000 each, which would be distributed to the 43 sellers.
The four committee members want the court to remove the "offensive clauses" in their words, if the objecting owners sign the sales agreement.
Tuan Sing Holdings, the developer that successfully tendered for the site in June, has offered to pay up to $135,000 for legal fees and other related costs. The committee has yet to accept the offer.
Majority owners have also said that they are prepared to forgo any payments that could be claimed from minority owners.
When The Straits Times contacted a committee member who was not part of the High Court application, he declined to comment as he had not received a copy of the court documents.