WP MPs file defence in AHTC lawsuit

This article is more than 12 months old

Trio says they are not personally liable for the $33 million in payments and maintains they 'had acted in good faith'

Workers' Party (WP) MPs Sylvia Lim, Low Thia Khiang and Pritam Singh have filed their defence in the lawsuit brought against them by the Aljunied-Hougang Town Council (AHTC), saying they were not personally liable for the $33 million in payments made by the town council to its former managing agent and service provider.

The MPs, who have been asked to account for the sum, also said they do not owe any special duty of care to the town council beyond what is stated in the laws governing town councils. They pointed out that they need only to fulfil obligations imposed by these laws.

Even so, they added, they had acted in good faith and the best interests of the town council in the appointment of its managing agent FM Solutions and Services (FMSS) and service provider FM Solutions and Integrated Services (FMSI).

These arguments by the trio, who lead the AHTC, were set out in a 40-page statement of defence, which also covers two other defendants, town councillors Kenneth Foo Seck Guan and Chua Zhi Hon. It is the latest turn in the long-running saga after WP took charge of the town council after it won Aljunied GRC in 2011.

Last month, AHTC, represented by law firm Shook Lin & Bok, initiated legal action against them under the direction of an independent panel the town council appointed in February to help recover improper payments.

The town council alleged that $33,717,535 in payments it made from July 15, 2011, to July 14, 2015, to FMSS and FMSI were not valid, as the town councillors had acted in breach of their fiduciary duties.

Last night, the three MPs said their defence would deal with all the allegations made against them and which they denied.

Our actions... sought to ensure that AHTC was able to fulfil all its functions and duties, notwithstanding the difficult circumstances that we were faced with. Workers’ Party MPs Sylvia Lim, Low Thia Khiang and Pritam Singh

"We maintain that, at all times, we had acted in good faith and in accordance with our duties as town councillors. Our actions had the best interests of the residents of AHTC at heart and sought to ensure that AHTC was able to fulfil all its functions and duties, notwithstanding the difficult circumstances that we were faced with," they said in their statement.

The five defendants are represented by law firm Tan Rajah & Cheah, which said: "Their duties as town councillors are no more and no less than as set out in the Town Councils Act (TCA) and the Town Councils Financial Rules."

Under the TCA, the councillors are also protected from any personal claims against them for actions they have taken in their roles, their lawyers added. They also denied that the town council had made any improper payments or suffered any loss as a result of their conduct.

AHTC had asked for "equitable compensation" for any sum wrongfully paid out, which was made in its statement of claim filed in the High Court last month.

It also wanted Ms Lim and Mr Low to be liable for $1.2 million - the difference between the "inflated charges" of FMSS against the rates of previous managing agent CPG Facilities Management.

The town council had pinpointed the appointment of FMSS, without a tender being called, as the start of its financial woes. It said FMSS was set up by Ms How Weng Fan and her late husband Danny Loh on the instruction of Ms Lim and Mr Low.

Both MPs, refuting allegations of wrongdoing, said they did it to ensure that the services to residents would not be disrupted, under a system stacked against opposition parties.

They said CPG had told them it wanted to stop providing managing agent services to AHTC, even though its contract had not ended.

Given its desire to quit, they said they did not trust it to continue to do its best for the residents and felt it was "too politically risky to retain a reluctant and unwilling managing agent".

They also said they took steps to "ameliorate" any conflicts of interest that would arise from making Ms How the town council's general manager, and Mr Loh the secretary, by requiring all payments to FMSS to be co-signed by either the chairman or vice-chairman of the town council.