AHTC lawsuit

WP giving 'irrelevant, confusing info' to explain actions

Workers' Party (WP) chief Low Thia Kiang watches the live telecast of Polling Day on the small screen at the Hougang Stadium on Sept 11, 2015.
Workers' Party (WP) chief Low Thia Kiang watches the live telecast of Polling Day on the small screen at the Hougang Stadium on Sept 11, 2015. PHOTO: ST FILE

The Workers' Party (WP) town councillors who are being sued for allegedly making millions in improper payments have raised confusing and irrelevant information to explain away their actions, said Aljunied-Hougang Town Council (AHTC) lawyers.

In fresh documents filed in the High Court on Wednesday, they said the town councillors - in bringing up WP chief Low Thia Khiang's experience in Hougang, and claiming the system was skewed against them - have sought to introduce information that "amounts to pleadings that are scandalous, frivolous and an abuse of process".

This could "tend to prejudice, embarrass, and delay the fair trial of the action", they added.

The lawyers, who are from law firm Shook Lin & Bok, were responding to the defence filed on Aug 15 by Mr Low and fellow WP MPs Sylvia Lim and Pritam Singh, as well as town councillors Chua Zhi Hon and Kenneth Foo.

AHTC is suing them, its former managing agent FM Solutions and Services (FMSS) as well as the firm's owner How Weng Fan over improper payments the town council made from July 2011 to July 2015.

The lawsuit was initiated under the direction of an independent panel appointed by AHTC to recover the money.

As part of their defence, the town councillors included two annexes in which they said they had no choice but to appoint FMSS as managing agent without calling a tender in 2011 because they did not want services to residents to be disrupted.

The annexes said, among other things, that AHTC's then managing agent CPG Facilities Management would not be sincere in managing an opposition town council, and the PAP may use the town council system to "trip up" the newly elected WP MPs.

The WP, which ran Hougang town council from 1991, beat the PAP team in Aljunied GRC in the 2011 General Election.

The town councillors also said they appointed a new managing agent because CPG did not have a contractual obligation to extend its services to Hougang.

Refuting this, AHTC said CPG was required to do so under its contract. AHTC pinpointed the rushed appointment of FMSS as the start of its accounting woes - more than $33 million in payments made to the firm, run by Ms How and her late husband Danny Loh, were said to be improper and invalid.

But the town councillors, Ms How and FMSS have denied these claims. They argued that under Section 52 of the Town Councils Act, they are protected from any personal claims against them for actions they have taken in their roles.

To this, AHTC said the provision does not apply as the town councillors had breached their "core fiduciary duties" and "acted in bad faith, for improper purposes". It added that the provision covers "claims brought by a party other than AHTC", and does not apply to them.

Ms How and FMSS had separately said in their defence, filed on Aug 16, that AHTC is stopped, or legally barred, from getting back its money. They said AHTC had voluntarily entered into a contract with FMSS, paid for the services in accordance with contractual terms, and benefited from the services provided.

But AHTC argued that this defence did not apply, as Ms How, who was AHTC's general manager, and Mr Loh, who was its secretary, had knowingly received money that was given to them in breach of fiduciary duty.

When approached yesterday, FMSS and the WP town councillors declined to comment.

However, Mr Singh said any response would be "undertaken through the legal process".

A version of this article appeared in the print edition of The Straits Times on September 01, 2017, with the headline 'WP giving 'irrelevant, confusing info' to explain actions'. Print Edition | Subscribe