WP town councillors acted in good faith at all times: Defence

Lawyers for the plaintiffs and defendants in the multimillion-dollar civil suits over the management of the Aljunied-Hougang Town Council handed their written closing submissions to the High Court last Friday. Political Correspondent Adrian Lim reports.

The case built against five Workers' Party (WP) town councillors, who are facing two multimillion-dollar civil suits over how they ran their town council, does not take into account the actual circumstances that they faced, said their lawyers.

In their closing submissions handed to the High Court last Friday, the lawyers representing WP's chairman Sylvia Lim, former chief Low Thia Khiang and secretary-general Pritam Singh also reiterated that the trio had acted in good faith at all times, and noted the plaintiffs did not call any "factual witnesses" to challenge the WP MPs' evidence about the circumstances after the 2011 General Election.

The submissions came after a 17-day hearing last October, during which the five WP town councillors took the stand to defend themselves against allegations that they had breached their fiduciary duties in running the Aljunied-Hougang Town Council (AHTC).

The case centres on $33.7 million that AHTC paid to its former managing agent FM Solutions & Services (FMSS) and service provider FM Solutions and Integrated Services between 2011 and 2015.

AHTC and Pasir Ris-Punggol Town Council (PRPTC) filed separate lawsuits in 2017 to recover the monies from the payments, which are alleged to be improper and void.

In the 150-page submission, lawyers from Tan Rajah and Cheah, who represent the WP town councillors, set out their case for why there was nothing improper about the appointments and payments.

They also made the point that town councils are to be managed by the elected MPs with as much latitude as possible under the law. Ms Lim, who was delegated authority to act on AHTC's behalf, had waived the tender for a new managing agent in 2011 and appointed FMSS for one year.

 
 

But in the course of cross-examination, the plaintiffs "attempted to build their case by subjecting the defendants to the standards of perfect hindsight using hypothetical scenarios that did not take into consideration the actual circumstances that the town councillors faced at the time", the lawyers said.

After winning Aljunied GRC from the People's Action Party (PAP) in 2011, the WP MPs decided to have an alternative managing agent as a contingency in case the incumbent, CPG Facilities Management, decided to pull out, the lawyers argued.

Mr Low spoke to Ms How Weng Fan, the then secretary of the WP-run Hougang Town Council, and her husband Danny Loh about setting up a managing agent firm and tapping experienced staff from Hougang Town Council (HTC). FMSS was thus formed.

"It was alleged at trial by the plaintiffs that the contingency plan involved benefiting WP's supporters on the basis that HTC's staff were WP supporters. This allegation... is baseless and unsupported by any evidence," the lawyers said.

The legal team, led by Senior Counsel Chelva Rajah, also said the only basis of the claims by AHTC and PRPTC is audit reports by KPMG and PwC.

AHTC appointed KPMG in 2016 to look into its books, after the Auditor-General's Office found significant governance lapses in a special audit. PRPTC appointed PwC to look into AHTC's accounts.

Defence lawyers said the witnesses, KPMG executive director Owen Hawkes and PwC partner Goh Thien Phong, "have no personal knowledge of the facts and circumstances existing at the material time when the town councillors made the decisions".

Little weight should be accorded to the evidence given by Mr Hawkes and Mr Goh, the lawyers said, adding "it is indisputable that the accountants have gone beyond their remit by second-guessing whether the contracts and appointments should have been made".

They added that no "factual witnesses" were called by the plaintiffs to challenge the evidence given by the town councillors of the circumstances they faced after they were elected in the 2011 elections.

During the hearings, the town councillors spoke about the special circumstances they faced, such as the unprecedented case of a GRC changing hands from the PAP to an opposition party, and the incumbent managing agent no longer willing to continue to work with the WP MPs, the lawyers noted.

"The town councillors made the decisions they did with the residents' best interests at heart," the lawyers said.

They also said Mr Jeffrey Chua, then secretary of Aljunied Town Council, who was involved in the handover, should have been called as a witness to testify on a May 13 letter which the plaintiffs referred to as purported evidence of CPG being told it was going to be replaced. The letter sought to obtain data relating to residents, the lawyers said.

The other three defendants in the lawsuits are FMSS, Ms How and the late Mr Loh, who is represented by Ms How. After AHTC appointed FMSS as managing agent, Mr Loh was made secretary and Ms How, general manager, of AHTC, from 2011 to 2015.

Lawyers from Netto and Magin said in closing submissions that these roles were for administrative purposes and did not carry fiduciary duties. Mr Loh and Ms How had acted honestly and in good faith, and had disclosed fully their interest in FMSS to AHTC's town councillors, their lawyers added.

 
A version of this article appeared in the print edition of The Straits Times on January 23, 2019, with the headline 'WP town councillors acted in good faith at all times: Defence'. Print Edition | Subscribe