The new Workers' Party-run Sengkang Town Council (SKTC) will take over the management of a lawsuit initiated by the Pasir Ris-Punggol Town Council (PRPTC), the Ministry of National Development (MND) confirmed on Wednesday (July 22).
PRPTC had filed the ongoing civil suit to recover alleged losses incurred by the former Punggol East SMC, which is now part of Sengkang GRC and returned to WP hands at the recent general election.
The transfer of the management of the lawsuit will take effect when the current town councils hand over duties to the new town councils, MND added.
The new town councils will be formed following an official order by the Minister for National Development, which will likely be issued at the end of this month. The order will state the handover date, which will be within 90 days of the order.
This means the WP team in Sengkang will take on the responsibility of handling the lawsuit, which was brought by PRPTC against WP chairman Sylvia Lim, former party chief Low Thia Khiang and six other defendants in the High Court.
MND said: "As the former Punggol East SMC has become a part of Sengkang GRC, its rights and duties, including the management of the lawsuit initiated by PRPTC, will be handed over to the new town council." It added that it was unable to comment on specific legal actions or arrangements, which are the prerogative of the respective town councils, as it is not a party to the suit.
It remains to be seen if Senior Counsel Davinder Singh, who has been representing PRPTC in the lawsuit, will continue to represent the new Sengkang Town Council.
Mr Singh's law firm, Davinder Singh Chambers, did not respond to requests for comment on Wednesday.
The WP's He Ting Ru, an MP-elect for Sengkang GRC, said in a Facebook post on Friday that her team is committed to ensuring a smooth takeover from the previous town councils.
"We will also ensure that all decisions taken in relation to the management of the ongoing lawsuit are fair, transparent and in accordance with the law," Ms He said.
PRPTC's civil suit came after the WP-run Aljunied-Hougang Town Council (AHTC) had taken the same defendants to court.
Punggol East was managed by AHTC from 2013 to 2015. In GE2015, the People's Action Party won back the single seat. It became part of Sengkang GRC when electoral boundaries were redrawn earlier this year.
PRPTC and the WP town councillors are appealing against a High Court judgment which ruled, among other things, that Ms Lim and Mr Low had breached their fiduciary duties to the town council.
The sums payable to the plaintiffs will be assessed separately.
Assistant Professor of Law Benjamin Ong from the Singapore Management University said SKTC could in theory apply to the court to discontinue the claim entirely.
"However, because the proceedings are at such a late stage, SKTC would require the court's permission to discontinue the suit," he said.
"Further, the court would be able to impose conditions on the discontinuance."
Prof Ong added that even if the court allows the suit to be discontinued, it could still be left open for SKTC to restart proceedings against the defendants later on.
Outlining some possible scenarios, he said SKTC might agree to appoint an independent panel which will be empowered to carry on the litigation on its behalf, and further agree not to interfere with this litigation, similar to what AHTC did.
The Minister for National Development may also have the power to order SKTC to resume proceedings under Section 43D of the Town Councils Act, he said, adding that this is speculation on his part.
"I say it is possible because, as far as I know, Section 43D, which was introduced in 2017, has never been used before, so the precise scope of the minister's powers under Section 43D has yet to be pronounced on authoritatively by the courts."
Alternatively, it is also possible the minister makes financial grants to SKTC conditional on it resuming proceedings against the defendants or, depending on the timing of the grant, conditional on SKTC not discontinuing the civil suit in the first place, Prof Ong said.
Correction note: An earlier version of the article said the transfer of the lawsuit will take effect when the new town councils are formed. This is incorrect. The handover of duties, including the management of the lawsuit, will take place within 90 days of the formation of the new town councils.
