Legal poser in town council lawsuit after WP's Sengkang GRC win

Pasir Ris-Punggol Town Council had originally sued for alleged losses incurred when Punggol East was under WP's watch. PHOTO: ST FILE

A legal poser has arisen in the lawsuit brought by Pasir Ris-Punggol Town Council (PRPTC) on behalf of the former Punggol East SMC, after the Workers' Party (WP) won Sengkang GRC at the recent general election.

Chief among the questions is who will take charge of the case, now that the former single seat - which was absorbed into Sengkang GRC - has gone back to the WP.

PRPTC had originally sued WP chairman Sylvia Lim, former party chief Low Thia Khiang and six other defendants in the High Court for alleged losses incurred when Punggol East was under their watch. It initiated the civil suit after the WP-run Aljunied-Hougang Town Council (AHTC) had taken the same defendants to court.

Punggol East had been managed by AHTC from 2013 to 2015, but was wrested back by the People's Action Party in the 2015 polls.

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 cases are scheduled to be heard by the Court of Appeal next month. The sums payable to the plaintiffs will be assessed separately.

But Punggol East was voted into WP hands earlier this month.

Lawyers say one issue to be clarified is who the plaintiffs are, now that the single seat formerly under PRPTC has changed hands and is in the process of being handed over to the WP.

A further issue would be that existing lawyers would have to take instructions from the new client - likely a new town council set up and run by the WP - whose views as a client may vary from PRPTC's, said lawyer Dharmendra Yadav.

Assistant Professor of Law Benjamin Ong from the Singapore Management University noted that under the Town Councils Act, the Minister for National Development has powers to establish any new town councils, dissolve any redundant town councils and provide for an orderly transition.

Under the Act, the minister has to issue these orders on the 14th day after July 16, which is the date when the results of the election were published in the Government Gazette, he said. This would mean the orders will be issued on, and take effect from, July 30, he added.

He suggested that based on past practice, the July 25 order could specify that legal proceedings by PRPTC which relate to the area of Punggol East SMC may be continued and enforced by the new Sengkang Town Council.

He cited what took place after the 2015 General Election, when the Minister for National Development ordered, among other things, that existing legal proceedings relating to the area of Punggol East SMC may be continued and enforced by PRPTC with effect from Dec 1, 2015.

This explained why PRPTC was one of the plaintiffs in the High Court case, he added.

"If I am correct in my prediction... then the effect of the July 25 order will be that the defendants will now be liable to AHTC and Sengkang Town Council," he said.

Prof Ong pointed out the likely effect of such an order would be that PRPTC's lawyers become the lawyers for the future Sengkang Town Council.

"But it is possible for Sengkang Town Council to discharge the lawyers. It is also in theory possible that the existing lawyers for PRPTC might, for whatever reason, discharge themselves from acting on behalf of Sengkang Town Council," he added.

Senior Counsel Davinder Singh is representing PRPTC in the suit.

PRPTC has appealed against the judgment issued last October by Justice Kannan Ramesh, specifically in relation to how the amount of compensation payable by the defendants is to be calculated.

According to court papers filed, PRPTC is appealing against the part of the decision by Justice Ramesh which held that the town council has to show the loss to be recovered in relation to Ms Lim, Mr Low, Ms How Weng Fan and the estate of the late Mr Danny Loh for their breaches of their fiduciary duties.

PRPTC is also appealing against Justice Ramesh's ruling that it is not entitled to compensation computed by reference to original sums that were used.

Prof Ong said the future Sengkang Town Council has every incentive to cooperate in allowing the litigation to proceed smoothly.

"It is in the new town council members' interest to demonstrate before the public that they will abide by the law and relevant legal processes," he said.

"In addition, the Workers' Party, like all political parties, has an interest in having the Court of Appeal clarify the law on town councils."

The WP declined to comment on the matter when approached.

  • Additional reporting by Tham Yuen-C

Correction note: This article has been updated for accuracy.

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A version of this article appeared in the print edition of The Straits Times on July 20, 2020, with the headline Legal poser in town council lawsuit after WP's Sengkang GRC win. Subscribe