A potential $17.5 million collective sale of the Beauty World Food Centre has stalled, after the High Court yesterday 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 in their duty to obtain the best price for the stallholders.
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 buy the property.
In addition, the stallholders were not given timely updates on critical issues such as how the proceeds would be apportioned, or proper time to consent to the sale.
She noted "there was no awareness that the trustees had no power to sell and no advice was sought from lawyers". The trustees' lawyer, who came on board later, tried to address some of these issues, she said, but these "do not close the prior gaps in the process".
However, this decision does not preclude the trustees from going back to court to ask for the power for another collective sale, their lawyer Jimmy Yap told The Straits Times yesterday. He said he will discuss 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 buy 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 had 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 though the 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, who owns a drinks stall at the centre, is among stall owners hoping for a sale. "I'm old already and want to retire."
She said she would continue operating her stall for now, but possibly rent it out in future. Like others The Straits Times spoke to, she declined to reveal her full name, citing sensitivity over the sale of the centre.
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 a 48-year-old hawker who is renting a fish soup stall at the food centre is happy about not having to move, though the stall owner had agreed to the sale of the centre.
The hawker, who gave his name only as Mr Xie, said: "We have a lot of regular customers...If we move elsewhere, we will have to start from scratch."