HDB's application to join MND at appeals court stage of town council case is a "surprise" to WP

The Aljunied-Hougang-Punggol East Town Council said it was surprised that the Housing Board (HDB) has applied to join the Ministry of National Development (MND) in a case involving the AHPETC.
The Aljunied-Hougang-Punggol East Town Council said it was surprised that the Housing Board (HDB) has applied to join the Ministry of National Development (MND) in a case involving the AHPETC.PHOTO: ST FILE

SINGAPORE - The Housing Board's (HDB) application to join the Ministry of National Development (MND) in a case involving the Workers' Party-run town council, has come as a surprise to Ms Sylvia Lim, who chairs both the town council and the WP.

She told The Straits Times on Tuesday: "The Aljunied-Hougang-Punggol East Town Council (AHPETC) is surprised that just when the MND's appeal is about to be heard by the Court of Appeal, HDB files a court document giving notice of its intention to join MND's lawsuit, in case the MND loses its appeal."

She added: "AHPETC will make its position on this known in court."

The Court of Appeal hearing has been fixed for Aug 3.

The MND had appealed against a decision in May by High Court Justice Quentin Loh in which he rejected the MND's application to appoint independent accountants to the WP-run AHPETC.

He ruled that the law only prescribes for the HDB or residents - and not the ministry - to take legal action against a town council if it fails to perform its duties. He also said that the MND already has powers to impose conditions - such as appointing accountants - when disbursing grants to town councils.

The HDB - a statutory board under the MND - now wants to be added as a co-plaintiff in anticipation of two possible developments at the Court of Appeal: that the court agrees that the HDB, and not the MND, is entitled to seek the court order; and that the sole reason that the appeal to appoint the independent accountants fails is that MND is not the right party to initiate such action.

The HDB's application, which was filed on June 22, was "based on the rule that no substantive action should be defeated by the procedural non-joinder of a party", the HDB and MND said in a joint statement on Tuesday .

They added that the application to join in the suit was filed by the HDB, and not MND.

The statement noted that High Court held that MND "was not the proper party to seek a court order to compel AHPETC to comply with its obligations under the Town Councils Act and that only the HDB, residents and flat-owners may do so".

The main part of their joint statement said:

"MND is appealing against the High Court's holding that MND is not the proper party to seek court assistance.

"Separately and without deviating from MND's appeal, HDB has filed the joinder application based on the rule that no substantive action should be defeated by the procedural non-joinder of a party.

"HDB's application is on the basis that it only needs to be heard if the Court of Appeal agrees with the High Court that (i) the HDB (and not the MND) is the proper party to seek the court order; and (ii) the only reason why MND's application for independent accountants is not granted is because MND is not the correct party to apply for it."

The application by the HDB has been fixed for hearing at the Court of Appeal on Aug 3, together with the MND's appeal.

A year-long special audit by the Auditor-General's Office had found serious accounting and governance lapses at AHPETC, prompting the MND to withhold two years of grants amounting to about $14 million.

MND applied in March for the High Court to appoint independent accountants to oversee the grants, co-sign payments above $20,000, examine past payments at AHPETC and recover any losses.

When its bid in the High Court failed, the MND applied for an expedited hearing before the Court of Appeal, saying that it otherwise could not disburse grants that it withheld, given the High Court's grim view of AHPETC's actions.

In his ruling, Justice Loh had been critical of the state of AHPETC's accounts and the validity and propriety of payments made to related parties. He also criticised the town council, saying it was a "travesty" that it ignored its duties and obligations to residents.

waltsim@sph.com.sg