The Aljunied-Hougang Town Council (AHTC), run by the Workers' Party (WP), has agreed to hand over financial documents to rival Pasir Ris-Punggol Town Council (PRPTC) but only those that relate strictly to Punggol East constituency.
This was agreed on in the Court of Appeal yesterday.
It is, however, only a partial agreement as their lawyers and accountants will have to meet to thrash out the conditions for PRPTC to access documents with information that includes other parts of AHTC as well.
Chief Justice Sundaresh Menon, who presided over the hearing, told both sides that should there be a dispute, they can return to the court with samples of the documents to illustrate the problem and receive guidance from the judges.
The two sides are entangled in a row over the sharing of financial documents needed to review the accounts of Punggol East, after the People's Action Party won back the single-seat constituency from the WP.
Punggol East also returned to the fold of the PRPTC.
Last month, the apex court had directed the accountants of both town councils to work with each other and share documents.
AHTC's accountant is KPMG while PRPTC's is PricewaterhouseCoopers (PwC).
At yesterday's hearing, Mr Peter Low, representing AHTC, said PwC should ensure its team of accountants does not have political or grassroots affiliations. PwC should also undertake not to reveal confidential information about AHTC it may come across, he added.
But Senior Counsel Davinder Singh, representing PRPTC, said the issue of political affiliation was irrelevant and there was no evidence that information was going to be misused.
Agreeing, CJ Menon said: "It's not evident to us on what basis Mr Low can impose conditions on who your clients want to appoint unless he can find a specific interest that is implicated. And so far that doesn't appear to be the case."
He added that PwC should have access to all documents related to Punggol East, but said: "It may be necessary to protect that flow of information related to AHTC and limit the disclosures to the parts relating to Punggol East."
CJ Menon also said that it was not the court's intention for PwC to duplicate the work already done by KPMG, which had been appointed to examine AHTC's books.
"I don't think it's on our mind that an identical exercise is going to be done twice over, by two groups of people because that would be rather disruptive," he said.