SINGAPORE - A potential $17.5 million collective sale of the Beauty World Food Centre has been stalled, after the High Court on Tuesday (Feb 20) declined to give three of its trustees the power to go ahead with the deal.
In a decision delivered in chambers, Justice Hoo Sheau Peng said that in the process leading to the deal, the three trustees had fallen short of their duty to obtain the best price for the stall holders.
Highlighting key problems with the deal, the judge noted that no valuation on the property was done before the sale, nor was there an open call for interest to purchase the property.
In addition, the stall holders were not given timely updates on critical issues such as how the proceeds would be apportioned, nor were they given proper time to consent to the sale.
She also noted that "there was no awareness that the trustees had no power to sell and no advice was sought from lawyers". She said the trustees' lawyer, who came on board later, has sought to address some of these issues, "but such efforts do not close the prior gaps in the process".
However, the decision does not preclude the trustees from going back to court to ask for the power for another collective sale, their lawyer, Mr Jimmy Yap, told The Straits Times on Tuesday.
Mr Yap said he will be discussing the options with his clients.
The trustees were also ordered to pay legal costs of $7,000 to the dissenting stall owners, who were represented by Mr Gregory Vijayendran.
The food centre, which occupies the fourth floor of the strata-titled Beauty World Centre in Bukit Timah, comprises 41 food stalls, but the title of the property is contained in a single strata certificate. This means that all the stall owners must agree before the food centre can be sold.
In 2016, a potential buyer expressed interest to purchase the centre, built in the 1980s, for $17.5 million.
The potential buyer paid an option fee of $175,000 to the stall owners. But seven individuals, who own six different stalls between them, rejected the money because they were against the sale.
The transaction was held off until the court decided whether the three trustees have the power to sell the food centre.
The trustees - Mr Lai Chong Lee, Mr Tan Kock Meng and Mr Tan Han Soong, who are also stall operators - had asked the court to enable them to proceed with the intended sale even though trust documents neither spell out nor imply that they have the power to sell the property.
They said most of the owners are in their late 60s or 70s, and wish to retire from the business, which is becoming increasingly stressful.
They said that in the past few years, most of the stall owners have been in favour of a collective sale, as the only financially feasible way to retire is by converting their investment into cash.
Madam Wu, 71, is among stall owners hoping for a sale. "I'm old already and want to retire."
She has owned a drinks stall at the food centre for 10 years. She said she would continue operating her stall for now and possibly rent it out in the future.
Madam Wu, like others at the food centre The Straits Times spoke to, declined to reveal her full name, citing sensitivity over the topic of the sale.
Madam Lao, in her 50s, opposes the sale. She said: "It is not fair because they were selling it way below the market price." She declined to reveal the price at which she would have agreed to sell her stall.
But one hawker, who gave his name only as Mr Xie, 48, said he is happy that he will not have to move to another place. He has been renting a fish soup stall at the food centre for the past two years.
The owner of the stall he is renting had agreed to the sale of the food centre.
Said Mr Xie: "We have a lot of regular customers who make business stable. If we move elsewhere, we will have to start from scratch."