AHTC case: Up to town councils to prove 'true or proper loss' in recovering damages from Workers' Party MPs, says judge

The Aljunied-Hougang Town Council is said to have made $33.7 million in improper payments under their watch.
The Aljunied-Hougang Town Council is said to have made $33.7 million in improper payments under their watch.PHOTO: ST FILE
Former WP chief Low Thia Khiang, chairman Sylvia Lim and current leader Pritam Singh have been found liable for damages suffered by the Aljunied-Hougang Town Council (AHTC).
Former WP chief Low Thia Khiang, chairman Sylvia Lim and current leader Pritam Singh have been found liable for damages suffered by the Aljunied-Hougang Town Council (AHTC).PHOTOS: ST FILE

SINGAPORE - It is up to the town councils to show what their "true or proper loss" is when they try to recover monies from eight defendants, including three Workers' Party MPs, in the next stage of a long-running civil suit.

Former WP chief Low Thia Khiang, chairman Sylvia Lim and current leader Pritam Singh have been found liable for damages suffered by the Aljunied-Hougang Town Council (AHTC), which is said to have made $33.7 million in improper payments under their watch.

In his judgment on Friday (Oct 11), Justice Kannan Ramesh said all the payments under two major contracts the AHTC awarded to its managing agent FM Solutions and Services and its sister company could be said to involve the misapplication of the town council's funds.

However, the town council had received the relevant services. The amount of money AHTC can recover, therefore, is the difference between what was paid and the value of the net benefits actually obtained by AHTC, he wrote.

This would mean that the "loss cannot possibly be as much as the full amount disbursed under the impugned contracts", he added.

As well, "the legal burden of proving loss falls upon the plaintiffs", Justice Ramesh said, adding that the plaintiffs must prove that the defendants' breach was the "but-for" cause of their loss.

The "but-for" cause is a legal term to show that something would not have happened but for the contributing factor.

 
 
 
 

Pasir Ris-Punggol Town Council (PRPTC) had also sued the same set of eight defendants, over claims related to Punggol East constituency when the WP won the ward at the 2013 by-election.

Justice Ramesh also said the court would not be exercising its discretion to order a common account, since the purpose of such an account would be to identify the whereabouts of the money.

In this case, "there is no confusion as to where and to whom AHTC's funds were paid".

He also set out guidelines for the other remedies sought by AHTC and PRPTC in relation to the defendants' breach of fiduciary duties.

For example, they can try to get FMSS and its co-owners, Ms How Weng Fan and her late husband Danny Loh, to repay any profits earned from their contracts with AHTC.

But they would have to choose between doing that or compensating the town council for losses suffered.

The judge has also allowed the plaintiffs to seek from the town councillors and the other defendants the costs of investigating their breaches of duty.

Friday's verdict brings to a close the first tranche of the trial to determine liability. The next step of the trial would be to determine the damages.