Town councils' suits against Workers' Party MPs start on Friday

Low Thia Khiang, Sylvia Lim, Pritam Singh to take stand in trial expected to run till Nov 2

The trial for the lawsuits will see (from left) WP chairman Sylvia Lim, former WP chief Low Thia Khiang and current leader Pritam Singh take the stand. PHOTO: ST FILE

The trial for the multi-million-dollar lawsuits against three Workers' Party town councillors will start on Friday.

Expected to run until Nov 2, it will see former WP chief Low Thia Khiang, chairman Sylvia Lim and current leader Pritam Singh take the stand.

The Aljunied GRC MPs are among those being sued by the Aljunied-Hougang Town Council (AHTC) under the direction of an independent panel. They also face a suit from the Pasir Ris-Punggol Town Council (PRPTC), which manages the affairs of Punggol East.

The other defendants in the lawsuit are AHTC's former managing agent FM Solutions and Services (FMSS), its owner How Weng Fan, and two other town councillors, Mr Chua Zhi Hon and Mr Kenneth Foo.

Both lawsuits are linked to the more than $33 million paid to FMSS and a related service provider between July 2011 and July 2015.

AHTC wants the town councillors to account for the sum and repay any money that was wrongfully paid out. PRPTC alleges that the decisions made by the town councillors had caused it to suffer "loss and damage", and is claiming equitable compensation.

In a statement last July, the three WP MPs rejected the claim that they acted in breach of their fiduciary duties, among other allegations. They also denied that they entered into contracts with architects in breach of duties owed to AHTC.

On being asked to give an account of profits made from the appointment of FMSS or pay damages of at least $1.25 million, Mr Low and Ms Lim said they have "not benefited a single cent".

Ms Lim and Mr Singh have also been asked to pay damages of $2.8 million for the wrongful appointment of architects.

"The WP MPs have acted in good faith and in the best interests of the town council and our residents," they said.

Observers are watching the suit closely for the legal and political implications the verdict might have.

In what some have called a "landmark case", the courts will have to rule on whether town councillors owe a fiduciary duty to their town councils because such a relationship between town councillors and town councils is not spelt out in the Town Councils Act.

And if the defendants are indeed found liable, the defendants would have to compensate AHTC.

If they cannot pay up, they risk being declared bankrupt and having their assets seized. MPs who are made bankrupt will lose their seats.

The trial is likely to see KPMG Forensics partner Owen Hawkes and PwC partner Goh Thien Phong take the stand first.

Both men belong to firms tasked to examine Aljunied-Hougang Town Council's accounts.

The WP MPs and town councillors will be represented by Tan Rajah & Cheah, with lawyer Chelva Retnam Rajah as lead counsel.

The independent AHTC panel is represented by a team from Shook Lin and Bok led by lawyer David Chan, while PRPTC is represented by Drew & Napier, and FMSS is represented by Netto & Magin.

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A version of this article appeared in the print edition of The Straits Times on October 03, 2018, with the headline Town councils' suits against Workers' Party MPs start on Friday. Subscribe