Chief Justice to hear MND application for expedited appeal hearing on AHPETC case

The Aljunied-Hougang-Punggol East town council (AHPETC) at Block 701, Hougang Ave 2. -- PHOTO: ST FILE
The Aljunied-Hougang-Punggol East town council (AHPETC) at Block 701, Hougang Ave 2. -- PHOTO: ST FILE

SINGAPORE - Chief Justice Sundaresh Menon will on Thursday hear an application by the Ministry of National Development (MND), which wants to expedite its appeal against a High Court decision not to appoint independent accountants at the Workers' Party (WP)-run town council.

CJ Menon will conduct an open-court hearing at 10am to decide whether the case warrants being put on the fast track.

MND is fighting a decision by Justice Quentin Loh, who had ruled last Wednesday that there was no legal basis to grant the ministry's request to appoint independent accountants to the Aljunied-Hougang-Punggol East Town Council (AHPETC).

The ministry had wanted the accountants to oversee its grants to the town council and investigate the town council's past payments, after a special audit of AHPETC found accounting and governance lapses in its financial management.

But while Justice Loh said it was a "travesty" that AHPETC had neglected its obligations to residents, he found that the Town Councils Act only provided for residents and the Housing Board - and not the MND - to take legal action against AHPETC.

The judge also urged both parties to work together to reach a consensus so that MND can disburse government grants to AHPETC amounting to $14 million, which the ministry is withholding due to the financial lapses.

These grants are the reason MND is seeking to expedite its appeal against Justice Loh's decision. The ministry said last Friday it is unable to immediately disburse the grants to AHPETC in the absence of the independent accountants, given the High Court's grim view of the town council's actions.

A spokesman said: "The judge found that AHPETC had breached and continues to be in breach of its duties and obligations in law, and that there are critical questions about the state of its finances.

"The Government cannot disburse public funds to AHPETC in the current circumstances, given the very serious findings by the Auditor-General's Office (AGO) and the High Court."

WP and AHPETC chairman Sylvia Lim said she was surprised that the MND is appealing Justice Loh's decision, and "especially that they are not taking the advice of the judge that the MND and AHPETC should work together to arrange for the grants to be disbursed".

She added that the town council "will resist the appeal".

In his decision, Justice Loh had agreed with AHPETC lawyer Peter Low's argument that the law already allows the National Development Minister to impose conditions on grants disbursed to town councils, including the appointment of independent accountants. Thus there would be no need for MND to seek the court's approval to appoint the accountants.

In addition, citing parliamentary debates of 1988, Justice Loh had found that the intent in passing the Town Councils Act was to give town councils latitude in their management of funds.

But MND explained to The Straits Times on May 29 that it was appealing the decision because "any conditions imposed by the minister would be unacceptable to APHETC and this will result in further court proceedings".

"This will delay disbursement of the S&CC grants, which ultimately puts at risk residents' interests," a ministry spokesman said.

"MND's appeal, if granted, will ensure that a court-appointed independent accountant takes appropriate steps to recover any monies that may have been lost through its financial mismanagement and questionable payments. It will also allow MND to immediately disburse the... grants to AHPETC in the interests of residents while ensuring that these public funds are adequately safeguarded."

Attorney-General's Chambers deputy chief counsel for litigation Aurill Kam, acting for MND, had said in court last month that AHPETC was "technically insolvent" and only has enough funds until June.

Ms Kam also said the court stepping in to appoint the accountants will allay any potential concerns of apparent bias.