SINGAPORE - The Court of Appeal sits on Monday to hear the Ministry of National Development's (MND) appeal against a High Court decision not to appoint independent accountants to the town council run by the Workers' Party (WP).
Chief Justice Sundaresh Menon, along with Judges of Appeal Chao Hick Tin and Andrew Phang, will hear arguments from the MND's lawyer, Attorney-General's Chambers deputy chief counsel for litigation Aurill Kam, and Aljunied-Hougang-Punggol East Town Council's (AHPETC) lawyer, Mr Peter Low.
It will also hear an application by the Housing Development Board (HDB) to join the MND as a co-plaintiff and co-appellant in the case.
WP and AHPETC chairman Sylvia Lim has said that the town council "will resist the appeal".
The crux of the hearing is to determine whether to uphold Justice Quentin Loh's finding in May, that there was no legal basis for the MND to ask the court to appoint the independent accountants.
In his decision, Justice Loh had criticised AHPETC over its lapses, but said that the law only has provisions for the HDB or residents - and not the ministry - to take legal action against a town council that fails to perform its duties.
He also said that the National Development Minister has powers to appoint the accountants as a condition for disbursing grants to town councils, and does not have to go through the court.
When the MND appealed the ruling, it cited the High Court's grim view of AHPETC's actions: "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 AGO and the High Court."
Justice Loh had harsh words for AHPETC, describing it as a "travesty" that it ignored its duties and obligations.
He was critical of the state of the town council's accounts, and questioned the validity and propriety of payments previously made to related parties - a reference to AHPETC's managing agent firms that are owned by the town council's key officials.
The MND said that given the High Court's findings, it could not immediately disburse about $14 million in grants, over two financial years, to AHPETC without independent accountants safeguarding the monies.
The MND had withheld the sum from AHPETC owing to financial lapses uncovered by the Auditor-General's Office during a special audit.
In March, the MND applied to the High Court to appoint independent accountants to AHPETC to oversee the grants, co-sign payments above $20,000, examine past payments, and recover any losses.
MND's June 22 application to add the HDB as a co-plaintiff is in anticipation of two possible developments: the Court of Appeal agreeing that HDB, and not MND, is entitled to seek the court order; and the Court of Appeal finding that the sole reason for not appointing accountants is that the MND is not the right party to initiate such action.