IN THE HIGH COURT OF THE REPUBLIC OF SINGAPORE
HC/S of 2017 ) Between
ALJUNIED-HOUGANG TOWN COUNCIL (ID Unknown) …Plaintiff And
1. SYLVIA LIM SWEE LIAN (NRIC No. S1727921A)
2. LOW THIA KHIANG (NRIC No. S1177549G)
3. PRITAM SINGH (NRIC No. S7623613E)
4. CHUA ZHI HON (NRIC No. S8535980J)
5. KENNETH FOO SECK GUAN (NRIC No. S7711639G)
6. HOW WENG FAN (NRIC No. S2506328G)
7. HOW WENG FAN (PERSONAL REPRESENTATIVE OF THE ESTATE OF DANNY LOH CHONG MENG, DECEASED, IN HIS PERSONAL CAPACITY AND TRADING AS FM SOLUTIONS & INTEGRATED SERVICES) (NRIC No. S2506328G)
8. FM SOLUTIONS & SERVICES PTE LTD (Registration No. 201111590H)
…Defendants
TABLE OF CONTENTS
1. DRAMATIS PERSONAE ...... 1
1.1 The Plaintiff: Aljunied-Hougang Town Council ...... 1
1.2 The Defendants: An overview ...... 2
1.3 The 1st Defendant: Sylvia Lim ...... 3
1.4 The 2nd Defendant: Low Thia Khiang ...... 3
1.5 The 3rd Defendant: Pritam Singh...... 4
1.6 The 4th and 5th Defendants: Chua Zhi Hon and Kenneth Foo ...... 4
1.7 The 6th and 7th Defendants: How Weng Fan and the late Danny Loh Chong Meng ...... 5
1.8 The 8th Defendant: FM Solutions & Services Pte Ltd ...... 6
1.9 Other Parties: CPG Facilities Management Pte Ltd ...... 8
1.10 Limitation on Scope of Claims made by AHTC ...... 9
2. THE DUTIES: TOWN COUNCILLORS AND LOH AND HOW ...... 9
2.1 Elected Members and Appointed Members ...... 9
2.2 Loh and How ...... 11
2.3 Tortious Duty of Care and Skill ...... 12
3. RELEVANT BACKGROUND FACTS LEADING UP TO PRESENT SUIT ...... 12
3.1 The Audit by the Auditor-General’s Office ...... 12
3.2 The Appointment of Independent Accountants and the Accountants’ Review of Past Payments ...... 15
3.3 The Appointment of the Independent Panel ...... 17
4. INSTALLATION OF FMSS AS MANAGING AGENT OF AHTC ..... 19
4.1 Preliminaries ...... 19
4.2 Precursor to the appointment of FMSS ...... 19
4.3 The 4 August 2011 Town Council Meeting & the 1st MA Contract ...... 22
4.4 The 2nd MA Contract ...... 24 i
5. PAYMENT CONTROLS ...... 24
5.1 The flawed system of making payments to FMSS/FMSI in AHTC arising from the appointment of FMSS as the Managing Agent ...... 24
5.2 Void/Voidable Payments to FMSS/FMSI ...... 28
5.3 Improper Payments to FMSS / FMSI ...... 31
5.4 Payments to Other Third Parties in Breach of TCFR Provisions ...... 34
6. BREACH OF CORE FIDUCIARY DUTY ...... 37
6.1 Installation of FMSS: Sylvia Lim and Low Thia Khiang ...... 37
6.2 Remedies arising from breaches of core fiduciary duties...... 42
6.3 Loh and How’s breach of core fiduciary duty ...... 45
6.4 Loh and How: Dishonest Assistance ...... 46
6.5 Remedies for breach of Loh and How’s core fiduciary duties ...... 48
6.6 The decision to enter into the FMSS Contracts and/or the FMSI EMSU Contract was ultra vires and void in Public Law ...... 50
7. BREACH OF DUTY OF CARE AND SKILL ...... 51
7.1 Sylvia Lim and Low Thia Khiang: Appointment of FMSS ...... 51
7.2 Remedies for breach of duty of care and skill ...... 53
7.3 Sylvia Lim: Improper Payments ...... 54
7.4 Remedies for Sylvia Lim’s breach of duty of care and skill ...... 55
7.5 The Committee members’ breach of duty of care and skill – engaging LST Architects for 7 projects involving costs in excess of $70,000 without tender ...... 55
7.6 Remedies for Committee members’ breach of duty of care and skill ...... 58
8. KNOWING RECEIPT: FMSS & FMSI ...... 58
8.1 Liability to Account ...... 58
ii
STATEMENT OF CLAIM Page 1
STATEMENT OF CLAIM
1. DRAMATIS PERSONAE 1.1 The Plaintiff: Aljunied-Hougang Town Council 1.1.1 The Plaintiff, Aljunied-Hougang Town Council (“AHTC”), is a body
corporate with perpetual succession incorporated in Singapore under the
Town Councils Act (Cap. 329A) (version in force from 15 August 2005)
(the “TCA”). AHTC may sue and be sued in its corporate name under
section 5 of the TCA.
1.1.2 AHTC manages Housing Development Board (“HDB”) estates in
Aljunied Group Representation Constituency (“GRC”) (which comprises
Bedok Reservoir-Punggol, Eunos, Kaki Bukit, Paya Lebar and Serangoon
Divisions) and Hougang Single Member Constituency (“SMC”).
1.1.3 Following the General Election on 7 May 2011 (the “2011 General
Election”) and pursuant to the Town Councils (Declaration of Towns)
Order 2011 (G.N. No. S 263/2011), Aljunied Town Council and Hougang
Town Council merged to form AHTC on 27 May 2011, with a handover
date of 1 August 2011.
1.1.4 Following the by-election for Punggol East (“PE”) SMC on 26 January
2013 (the “2013 By-Election”) and pursuant to the Town Councils
(Declaration of Towns) (Amendment) Order 2013 (G.N. No. S 97/2013)
AHTC was reconstituted as Aljunied-Hougang-Punggol East Town
Council (“AHPETC”), with effect from 22 February 2013.
STATEMENT OF CLAIM Page 2
1.1.5 Following the General Election on 11 September 2015 (the “2015
General Election”) and pursuant to the Town Councils (Declaration of
Towns) Order 2015 (G.N. No. S 577/2015), PE SMC became part of Pasir
Ris-Punggol Town Council (“PRPTC”). AHPETC was reconstituted as
AHTC on 1 October 2015, and all properties, rights and liabilities of
AHPETC that were related to PE were, as of 1 December 2015, the
properties, rights and liabilities of PRPTC. Reference to AHTC herein
shall refer to AHTC and/or AHPETC (as the context requires).
1.1.6 AHTC’s members comprise the elected Members of Parliament (“MPs”)
(the “Elected Members”) and appointed members (the “Appointed
Members”) pursuant to section 8 of the TCA, from whose ranks the
Chairman and Vice Chairman are chosen pursuant to section 9 of the
TCA. The Elected Members and Appointed Members will be referred to
collectively as “Town Councillors”.
1.2 The Defendants: An overview 1.2.1 At the 2011 General Election, the group of candidates from the Workers’
Party (“WP”) elected for the electoral division of Aljunied GRC were the
1st Defendant: Sylvia Lim Swee Lian (“Sylvia Lim”), the 2nd Defendant:
Low Thia Khiang, the 3rd Defendant: Pritam Singh, Chen Show Mao, and
Muhamad Faisal bin Abdul Manap. Yaw Shin Leong of the WP was
elected to the Hougang SMC seat.
1.2.2 Following the by-election for Hougang SMC on 26 May 2012, Png Eng
Huat of the WP was elected to the Hougang SMC seat.
STATEMENT OF CLAIM Page 3
1.2.3 Following the 2013 By-Election, Lee Li Lian of the WP was elected to the
PE SMC seat.
1.3 The 1st Defendant: Sylvia Lim 1.3.1 Sylvia Lim was fielded successfully as a candidate in a group of
candidates from the WP elected for the electoral division of Aljunied GRC
in the 2011 General Election and the 2015 General Election.
1.3.2 Sylvia Lim has been an Elected Member of AHTC from 7 May 2011 to
date and has held the following appointments in AHTC:
a. From June 2011 to August 2015: Chairman of AHTC.
b. June 2012 to date: Member of the Tenders and Contracts
Committee (the “Committee”).
c. October 2015 to date: Vice-Chairman of AHTC.
1.4 The 2nd Defendant: Low Thia Khiang 1.4.1 Low Thia Khiang was, prior to the 2011 General Election, the elected
Member of Parliament for the electoral division of the Hougang SMC
from 1991 to 2011.
1.4.2 Low Thia Khiang was fielded successfully as a candidate in a group of
candidates from the WP elected for the electoral division of Aljunied GRC
in the 2011 General Election and the 2015 General Election.
1.4.3 Low Thia Khiang has been an Elected Member of AHTC from 7 May
2011 to date.
STATEMENT OF CLAIM Page 4
1.4.4 Low Thia Khiang was Vice-Chairman of AHTC from June 2011 to July
2013.
1.5 The 3rd Defendant: Pritam Singh 1.5.1 Pritam Singh was fielded successfully as a candidate in a group of
candidates from the WP elected for the electoral division of Aljunied GRC
in the 2011 General Election.
1.5.2 Pritam Singh has been an Elected Member of AHTC from 7 May 2011 to
date and has held the following appointments in AHTC:
a. From August 2012 to August 2015: Vice-Chairman of AHTC.
b. From June 2012 to date: Chairman of the Committee.
c. From October 2015 to date: Chairman of AHTC.
1.6 The 4th and 5th Defendants: Chua Zhi Hon and Kenneth Foo 1.6.1 The 4th and 5th Defendants are Chua Zhi Hon (“David Chua”) and
Kenneth Foo Seck Guan (“Kenneth Foo”) respectively. David Chua and
Kenneth Foo were and are Appointed Members of AHTC from May 2011
to date.
1.6.2 From June 2012, David Chua and Kenneth Foo were members of the
Committee.
1.6.3 The Committee was responsible for, inter alia,:
a. Vetting specifications of tenders called by AHTC;
STATEMENT OF CLAIM Page 5
b. Evaluating tenders received;
c. Interviewing tenderers as needed; and
d. Deciding on the award of tenders.
1.7 The 6th and 7th Defendants: How Weng Fan and the late Danny Loh Chong Meng 1.7.1 The 6th Defendant is How Weng Fan (“How”). How was married to
Danny Loh Chong Meng (“Loh”). Loh passed away on 27 June 2015.
How and one Loh Chung Kit are the personal representatives of Loh’s
Estate.
1.7.2 Loh and How were both officers of AHTC:
a. Loh was Secretary from 1 August 2011 to 31 May 2015;
b. How was Deputy Secretary from 9 June 2011 to 14 July 2015; and
c. How was also General Manager from 1 August 2011 to 14 July
2015.
1.7.3 Loh and How were appointed pursuant to section 20 of the TCA, which
provides that:
“Secretary and other staff of Town Council 20.—(1) A Town Council shall appoint a person, including any appointed member, to be the secretary to the Town Council on such terms and conditions as the Town Council may determine who shall be responsible to the Town Council for the proper administration and management of the functions and affairs of the Town Council in accordance with this Act.
STATEMENT OF CLAIM Page 6
(2) A Town Council may appoint such other staff on such terms and conditions as it may determine to assist the secretary.”
1.7.4 Loh and How are individuals known to Sylvia Lim and/or Low Thia
Khiang:
a. How had previously served as the Secretary of the former
Hougang Town Council under Low Thia Khiang; and
b. Loh provided Essential Maintenance Service Unit (“EMSU”)
services to the former Hougang Town Council through FM
Solutions & Integrated Services (“FMSI”) – a sole proprietorship
registered in Loh’s sole name – from 15 October 2007 to 14
October 2012 (the “FMSI EMSU Contract”).
1.8 The 8th Defendant: FM Solutions & Services Pte Ltd 1.8.1 The 8th Defendant is FM Solutions & Services Pte Ltd (“FMSS”), a
company incorporated in Singapore on 15 May 2011 with Loh as the
initial sole director and sole subscriber of 500,000 ordinary shares in
FMSS.
1.8.2 At all material times, FMSS was in the business of inter alia real estate
management.
1.8.3 FMSS was engaged by AHTC from 15 July 2011 to 14 July 2015 to
provide managing agent services and project management services:
STATEMENT OF CLAIM Page 7
a. FMSS was engaged to provide managing agent services and
project management services to AHTC under the 1st Managing
Agent Contract from 15 July 2011 to 14 July 2012 (the “1st MA
Contract”); and
b. FMSS was engaged to provide managing agent services and
project management services to AHTC under the 2nd Managing
Agent Contract from 15 July 2012 to 14 July 2015 (the “2nd MA
Contract”).
1.8.4 FMSS was also engaged by AHTC from 1 October 2011 to 30 June 2015
to provide EMSU services:
a. FMSS was engaged to provide EMSU services to AHTC under the
1st EMSU Contract from 1 October 2011 to 30 June 2012 (the “1st
EMSU Contract”);
b. FMSS was engaged to provide EMSU services to AHTC under the
2nd EMSU Contract from 1 July 2012 to 30 June 2015 (the “2nd
EMSU Contract”).
1.8.5 The 1st MA Contract, the 2nd MA Contract, the 1st EMSU Contract and
the 2nd EMSU Contract shall be collectively referred to as the “FMSS
Contracts” in this Statement of Claim.
1.8.6 On 17 June 2011, the shares in FMSS were distributed in the following
proportion:
STATEMENT OF CLAIM Page 8
a. Loh held 50% of FMSS.
b. How held 20% of FMSS.
c. Yeo Soon Fei (“Yeo”) held 10% of FMSS.
d. Koh Weng Kong (also known as “Vincent Koh”) held 10% of
FMSS.
e. Chng Jong Ling held 10% of FMSS.
1.8.7 As at the date hereof, the interest in FMSS is held in the following
proportion:
a. Loh’s estate: 50% of FMSS,
b. How: 20% of FMSS,
c. Yeo: 20% of FMSS; and
d. Lieow Chong Sern (Liang Zhongsheng): 10% of FMSS.
1.8.8 The directors of FMSS as at the date hereof are:
a. How (appointed 16 June 2011); and
b. Yeo (appointed 16 June 2011).
1.9 Other Parties: CPG Facilities Management Pte Ltd 1.9.1 CPG Facilities Management Pte Ltd (“CPG”) was the managing agent of
the Aljunied Town Council prior to the 2011 General Election. Aljunied
STATEMENT OF CLAIM Page 9
Town Council entered into a contract with CPG for the provision of
managing agent services for the period 1 August 2010 to 31 July 2013 (the
“CPG Contract”). CPG continued as managing agent of AHTC after the
2011 General Election until replaced by FMSS.
1.10 Limitation on Scope of Claims made by AHTC 1.10.1 The claims made herein cover the period between the 2011 General
Election and the 2015 General Election. The Town Councils (Declaration
of Towns) Order 2015 (G.N. No. S 577/2015) – which caused AHPETC
to revert to AHTC – ordered that all properties, rights and liabilities of
AHPETC that were related to PE were, as of 1 December 2015, the
properties, rights and liabilities of PRPTC.
1.10.2 AHTC does not claim any loss attributable or properly apportioned to
PRPTC through these proceedings although for the purposes of pleading
its case herein, the full quantum of such claims are pleaded unless and
until apportioned inter se between AHTC and PRPTC.
2. THE DUTIES: TOWN COUNCILLORS AND LOH AND HOW 2.1 Elected Members and Appointed Members 2.1.1 The Town Councillors are fiduciaries of AHTC and/or are persons subject
to duties and obligations ordinarily arrogated to fiduciaries having, inter
alia, undertaken to act for or on behalf of AHTC in circumstances which
give rise to a relationship of trust and confidence, and each of them owed
the following duties to AHTC:
a. The core fiduciary duties:
STATEMENT OF CLAIM Page 10
i. A duty of loyalty and fidelity (the “duty of loyalty and
fidelity”);
ii. A duty to act honestly and in good faith in the best interests
of AHTC and for proper purposes at all material times, and
not for any personal, collateral, or other improper purpose
(the “duty of good faith”);
iii. A duty to avoid placing oneself in a position where there is
a conflict, or potential conflict, between his loyalty and
duty to AHTC, on one hand, and his personal interest or the
interest of a third party, on the other (the “no conflict
rule”);
iv. A duty to declare to AHTC if one held any office or
possessed any property which placed oneself in a position
of actual or potential conflict of interest between his duties
owed to AHTC and one’s personal interest or interests of
and/or duties owed to any third parties (the “self-
declaration rule”);
v. Not to make a profit from one’s appointment other than
through the legitimate emoluments payable to him (the “no
profit rule”);
STATEMENT OF CLAIM Page 11
b. The duty to diligently exercise reasonable care and skill in the
exercise of their powers and in the discharge of their
responsibilities.
2.1.2 AHTC avers that the following expressions in the statutes set out duties
and obligations consistent with those undertaken by fiduciaries:
a. Section 15 of the TCA: Obliges a Town Councillor to “disclose the nature of his interest at a meeting of the Town Council”.
b. Rule 42 of the Town Council Financial Rules (Cap. 329A, Section 42) (version in force from 1 December 2007) (the “TCFR”): Prohibits lending to “any member, officer or employee of the Town Council.”
c. Rule 74(19A) of the TCFR: Prohibits the acceptance of the non- lowest priced tender if a Town Councillor has “any interest in the supplier of the stores, services or works in respect of which the acceptance of such tender or the waiver is sought.”
2.2 Loh and How 2.2.1 Loh and How – in their respective offices as Secretary and Deputy
Secretary of AHTC, which are both senior appointments – are fiduciaries
of AHTC and/or were subject to duties and obligations ordinarily
arrogated to fiduciaries, having inter alia, undertaken to act for or on
behalf of AHTC in circumstances which give rise to a relationship of trust
and confidence, and each of them owed fiduciary duties to AHTC
identical to those identified in paragraph 2.1.1 above (“Loh and How’s
Fiduciary Duties”).
STATEMENT OF CLAIM Page 12
2.3 Tortious Duty of Care and Skill 2.3.1 Further and/or in the alternative, the Town Councillors and each of them,
Loh and How, in their respective offices and by reason of their respective
appointments of seniority and authority, each owed concomitant duties of
care to AHTC under the common law tort of negligence.
3. RELEVANT BACKGROUND FACTS LEADING UP TO PRESENT SUIT 3.1 The Audit by the Auditor-General’s Office 3.1.1 As obliged by law, all Town Councils are required annually to have their
financial statements audited and then submitted to the Minister for
National Development, for presentation to Parliament.
3.1.2 For Financial Year (“FY”) 2012-13, AHTC’s (then AHPETC’s) submitted
audited financial statements and its Auditor’s Report dated 4 February
2014 prepared by its independent auditors, Foo Kon Tan Grant Thornton
LLP (“FKT”) (“FKT’s Report”), contained a Disclaimer of Opinion
based on 13 grounds of qualifications.
3.1.3 FKT’s Report stated that FKT “were not able to obtain sufficient
appropriate audit evidence to provide a basis for an audit opinion” and
accordingly that they “do not express an opinion on the Statement of
Financial Position of the [AHTC] as at 31 March 2013.” It also contained
a qualified opinion on AHPETC’s other legal and regulatory requirements
which stated that AHPETC has not complied with the provisions of the
STATEMENT OF CLAIM Page 13
TCA and the TCFR due to the matters described in the Basis for
Disclaimer of Opinion.
3.1.4 On 18 February 2014, the Minister for National Development wrote to the
Deputy Prime Minister and Minister for Finance (the “Deputy Prime
Minister”), expressing concerns over, inter alia, the following matters:
a. That FKT’s Report “raises serious questions about the reliability
and accuracy of AHPETC’s financial and accounting systems”;
and
b. That FKT had raised more issues of pressing concern in FY2012-
13 compared to the previous financial year, which “suggests a
deterioration in the position.”
3.1.5 The Minister for National Development thus invited the Deputy Prime
Minister to consider exercising his power under section 4(4) of the Audit
Act to direct the Auditor-General’s Office (“AGO”) to conduct an audit of
AHPETC’s FY2012-13 accounts.
3.1.6 On 19 February 2014, the Deputy Prime Minister wrote to the Auditor-
General stating that “[t]he observations in the Auditor’s Report raise
serious questions about the adequacy of AHPETC’s financial and
accounting systems, and whether public funds in AHPETC are properly
applied.” In exercise of his powers under section 4(4) of the Audit Act, the
Deputy Prime Minister directed the Auditor-General to carry out an audit
STATEMENT OF CLAIM Page 14
of AHPETC’s FY2012-13 financial accounts, records and books
according to the Terms of Reference enclosed therein (the “AGO Audit”).
3.1.7 The Terms of Reference for the AGO Audit provided, inter alia, the
following:
a. To examine whether for FY2012-13 all reasonable steps had been
taken by AHPETC to comply with any written law relating to
AHPETC’s monies, including but not limited to the TCA and
TCFR (Clause 1(iii));
b. To make such examination and evaluation as the Auditor-General
may consider necessary to investigate the causes of the disclaimer
of opinion by FKT in FKT’s Report (Clause 2(i));
c. To make such examination and evaluation as the Auditor-General
may consider necessary to ascertain the reliability and accuracy of
AHPETC’s financial management and accounting processes and
systems, and to ascertain and understand AHPETC’s accounts
(Clause 2(ii)); and
d. To exercise any of the powers conferred on the Auditor-General by
section 6 of the Audit Act in the performance of the Audit (Clause
3).
3.1.8 The AGO in turn appointed PricewaterhouseCoopers LLP (“PwC”) to
carry out an audit of selected areas of AHPETC’s accounts as part of the
STATEMENT OF CLAIM Page 15
AGO Audit, on behalf of and acting upon and under the authority of AGO
(the “PwC Audit”). The key objective of the PwC Audit was “to analyse
the inflows and outflows of six current bank accounts operated by
AHPETC in FY 2012/13 (April 2012 to March 2013) and to identify and
follow up on irregular transactions so as to ascertain the legitimacy of
these transactions.”
3.1.9 On 9 February 2015, AGO issued its final report on the AGO Audit to the
public (the “AGO Report”), which incorporated the findings of PwC’s
report on the review of AHPETC’s bank transactions (the “PwC AGO
Report”).
3.1.10 It was disclosed, inter alia, in the AGO Report and the PwC AGO Report
that the Town Councillors and the Town Council officers (including Loh
and How) had acted in a manner which was in breach of their obligations
owed to the Town Council and/or were not in the interest of the residents
of the Town Council.
3.1.11 Where appropriate, AHTC will in this Statement of Claim make reference
to these public reports and to the specific paragraphs therein.
3.2 The Appointment of Independent Accountants and the Accountants’ Review of Past Payments 3.2.1 Subsequent to the AGO Audit, and arising from the serious findings made
in the AGO Audit, proceedings were commenced by the Ministry of
National Development (“MND”) against AHTC (then AHPETC) (HDB
STATEMENT OF CLAIM Page 16
subsequently joined as a party to MND’s application) for, amongst others,
the appointment of independent accountants for AHTC. MND’s
application was made while the constituency of PE was still part of
AHPETC. Following the General Election on 11 September 2015, PE
became part of PRPTC and AHPETC was reconstituted as AHTC.
3.2.2 On 27 November 2015, the Court of Appeal, in a judgment dated the same
date (the “Judgment”), ordered, amongst others, that AHPETC appoint
accountants to assist in identifying the outstanding non-compliances with
section 35(c) of the TCA, to advise on the steps that must be taken to
remedy those outstanding non-compliances, and to establish whether any
past payments made by AHPETC were improper and ought therefore to be
recovered. Pursuant to the Judgment, AHTC appointed KPMG LLP
(“KPMG”) as its accountants, while PRPTC appointed PwC.
3.2.3 KPMG published its report on the review of past payments made by
AHPETC dated 31 October 2016 (the “KPMG Report”), while PwC
published its report on such review of past payments dated 30 April 2017
(the “PwC Report”) on 2 May 2017.
3.2.4 The KPMG Report made further findings concerning, inter alia, the
governance of public funds in AHPETC. In particular, the KPMG Report
found that:
a. Substantial improper payments had been made to related parties,
FMSS and FMSI. Such payments were also made under a severely
STATEMENT OF CLAIM Page 17
flawed payment system (see paragraph 5.1 below), where there
were no effective checks and balances;
b. Substantial improper payments had also been made to other
parties;
c. These improper payments were made in breach of the relevant
Town Councillors’ and/or Town Council officers’ duties and
obligations owed to AHPETC and/or the relevant provisions in the
TCA and/or TCFR; and
d. The relevant Town Councillors and/or Town Council officers are
responsible for the improper payments and should be held liable
for the losses suffered by AHPETC.
3.2.5 Where appropriate, AHTC will in this Statement of Claim make reference
to the KPMG Report and to the specific paragraphs therein.
3.3 The Appointment of the Independent Panel 3.3.1 In February 2017, AHTC appointed an Independent Panel (the “IP”)
consisting of Mr Philip Jeyaretnam (Chairman), Mr N Sreenivasan and Mr
Ong Pang Thye, to act as agents of AHTC under section 32(2) of the
TCA.
3.3.2 Section 32(2) of the TCA states:
“A Town Council may, subject to such conditions or restrictions as it thinks fit, delegate to any employee thereof or any agent all or any of the powers, functions and duties by this Act (except a restricted
STATEMENT OF CLAIM Page 18
power), and any power, function or duty so delegated may be exercised or performed by such employee or agent in the name and on behalf of the Town Council.”
3.3.3 The IP’s terms of reference (the “IP’s Terms of Reference”) include but
are not limited to:
“2.1.1 To review the Report on Improper Payments by KPMG LLP dated 31 October 2016 and any other report(s) issued or which may subsequently be issued by KPMG LLP concerning improper past payments (the “KPMG Reports”) and take such action as the Independent Panel thinks is in the best interests of AHTC. For the avoidance of doubt, the Independent Panel shall have the power to consult with and/or instruct KPMG LLP or its legal advisors to clarify or carry out such further work into such matters in the KPMG Reports as the Independent Panel considers necessary.
2.1.2 Without prejudice to the generality of paragraph 2.1.1 above, to do all such acts, matters and things including making any demand, commencing, prosecuting, carrying on, defending, settling, adjusting, withdrawing, compromising, compounding, discontinuing, filing appeals or interpleading in respect of all disputes, suits, actions and proceedings (including mediation, arbitration, and Court proceedings) and making any report to relevant authorities in connection with or arising out of the transactions, acts or things considered in the KPMG Reports.”
3.3.4 Accordingly, pursuant to the IP’s Terms of Reference, the IP has brought
about this Suit in the name of AHTC to, inter alia, recover all the
improper payments that had been paid out by AHTC and/or all the damage
and loss suffered by AHTC from the Defendants.
STATEMENT OF CLAIM Page 19
4. INSTALLATION OF FMSS AS MANAGING AGENT OF AHTC 4.1 Preliminaries 4.1.1 AHTC avers that its financial woes and the improper payments started
with the installation of a related party, FMSS, as the managing agent of
the Town Council.
4.2 Precursor to the appointment of FMSS 4.2.1 CPG was the managing agent of the former Aljunied Town Council at the
date of AHTC’s formation. Subsequent to the 2011 General Election,
CPG’s obligations to the former Aljunied Town Council and CPG’s
appointment would contractually expire only on 31 July 2013.
4.2.2 Notwithstanding the above, on or about 15 May 2011, Sylvia Lim and
Low Thia Khiang decided purportedly on behalf of AHTC that:
a. Loh and How would be instructed to set up and incorporate FMSS;
b. FMSS would be appointed forthwith as Managing Agent of AHTC
in CPG’s stead;
c. FMSS’s appointment as Managing Agent of AHTC would initially
be for a “transition period with a contract for one year”, without
the need to call for a tender by AHTC;
d. Loh would be concurrently appointed as the General Manager or
Secretary of AHTC; and
e. How would be appointed Deputy Secretary of AHTC.
STATEMENT OF CLAIM Page 20
4.2.3 On 15 May 2011, FMSS was incorporated with Loh as its sole shareholder
and director.
4.2.4 The aforesaid is recorded in part in an email dated 19 May 2011 from Low
Thia Khiang to How (the “19 May Email”).
4.2.5 The 19 May Email also records that Sylvia Lim and Low Thia Khiang
were aware that the installation of FMSS – once carried out – would
create a position of conflict whereby Loh’s and How’s duties to AHTC
would be set against their interest as directors and shareholders of FMSS.
The 19 May Email reads, in part, as follows:
“I have a short discussion with Sylvia today, we agree it is cleaner and easier to work by appointing Danny to be GM/Secretary of TC. This is on the understanding that you will be actively involve (sic) with the company which we will be appointed (sic) as MA for the transition period with a contract for one year
…
As for the conflict of interest, we find that it is not a big issue as all transaction has to follow (sic) the Financial Rules and MA’s company is subject to the Companies Act.”
4.2.6 By a letter dated 15 June 2011, FMSS issued a letter of intent marked for
the attention of Sylvia Lim as Chairman of AHTC, to offer its services as
managing agent for AHTC for a period of one year with effect from 15
July 2011 (the “Letter of Intent”).
STATEMENT OF CLAIM Page 21
4.2.7 FMSS issued an invoice no. FMSS/ 0601 dated 30 June 2011 to AHTC
for, inter alia, “provision of Managing Agent Services for Hougang SMC
for the month of June 2011” which accounted for $92,000 of the total
invoiced amount of $106,559 (the remainder being other expenses related
to the handover of AHTC).
4.2.8 Sylvia Lim and Yaw Shin Leong signed the Letter of Intent purportedly
on behalf of AHTC on 8 July 2011 and 18 July 2011 respectively.
4.2.9 By an email dated 13 July 2011 from Sylvia Lim to How, Low Thia
Khiang and Yaw Shin Leong, Sylvia Lim recorded the decision:
a. Not to call for a tender for the appointment of Managing Agent but
“will do so in one year’s time”; and
b. To commit to appointing FMSS “via letter of intent for now”.
4.2.10 By an email dated 13 July 2011, Low Thia Khiang replied to the
aforementioned email and wrote:
“Residents are not interested in whether we manage the town directly or engage MA or which MA we engaged whatever happens, good or bad, all elected members will be affected and accountable. I am of the view that the sole responsibility nature of the matter in Town Management means the decision making authority should sole rests (sic) with the elected members so long as we act in good faith and do not contravene “explicit” financial rules… We can properly document the reason for waiver as well as due diligence processes you/we have gone through with elected members on appointment of the MA at the separate meeting in a form of a report to the council with the new secretary in place.”
STATEMENT OF CLAIM Page 22
[emphasis added]
4.2.11 On 1 August 2011, the CPG Contract was terminated prematurely by
mutual consent purportedly between AHTC and CPG.
4.3 The 4 August 2011 Town Council Meeting & the 1st MA Contract 4.3.1 On 4 August 2011, AHTC held a Town Council meeting (the “4 August
2011 Town Council Meeting”) whereat the minutes thereof records the
approval of the Town Councillors was given for:
a. The waiver of tender for the appointment of a managing agent;
b. The appointment of FMSS as AHTC’s managing agent under the
1st MA Contract for one year from 15 July 2011;
c. The ratification of the appointment of Loh as Secretary with effect
from 1 August 2011; and
d. How, who had been earlier appointed as Deputy Secretary (i.e.
with effect from 9 June 2011), was to remain in the same
appointment,
(hereinafter referred to as the “Installation of FMSS”).
4.3.2 AHTC avers that the approval of the waiver of the tender and the
appointment of FMSS under the 1st MA Contract at the 4 August 2011
Town Council Meeting was secured as a fait accompli since a decision
STATEMENT OF CLAIM Page 23
had already been taken therefor prior to the 4 August 2011 Town Council
Meeting as aforesaid.
4.3.3 AHTC further avers that in a bid to persuade the other Town Councillors
to agree to the waiver of tender at the 4 August 2011 Town Council
Meeting, Sylvia Lim and/or Low Thia Khiang made the following key
misleading and/or false representations at the meeting:
a. CPG had “indicated their desire to be released from the agreement
as soon as practicable”;
b. Given the “tight timeframe and urgency”, there was no time to call
any tender for MA Services and it was “in the public interest” that
the calling of the tender be waived; and
c. The terms offered by FMSS “did not put the Town Council worse
off than under the previous MA”.
4.3.4 The KPMG Report has established that these reasons provided for the
waiver of the tender were false and/or clearly did not justify a waiver for,
inter alia, the following key reasons:
a. It was not so much that CPG had wanted out “as soon as
practicable”. Instead, even before CPG had apparently expressed a
preference to be released, some of the Town Councillors had
already decided to appoint FMSS.
STATEMENT OF CLAIM Page 24
b. There was simply no alleged “tight timeframe and urgency” as it
was clearly open to the Town Council to retain CPG as managing
agent until a tender had been called and a managing agent
appointed.
c. Based on the proposed terms set out in the Letter of Intent, FMSS
was clearly more expensive than CPG.
4.3.5 The 1st MA Contract expired on 14 July 2012.
4.4 The 2nd MA Contract 4.4.1 On 13 April 2012, AHTC called a tender for the three-year managing
agent services contract from 15 July 2012 to 14 July 2015.
4.4.2 FMSS, which was the sole tenderer, was awarded the 2nd MA Contract on
2 August 2012. The managing fee to be paid to FMSS under the 2nd MA
Contract was $16,752,314, excluding a separate project management
services fee of 3.5% of the value of projects managed.
5. PAYMENT CONTROLS 5.1 The flawed system of making payments to FMSS/FMSI in AHTC arising from the appointment of FMSS as the Managing Agent 5.1.1 AHTC had a flawed system of governance which, absent any meaningful
financial prudential measures, caused, facilitated and/or contributed to
improper payments made to FMSS and FMSI which AHTC seeks to
recover by way of these proceedings.
STATEMENT OF CLAIM Page 25
5.1.2 By awarding the 1st and 2nd MA Contracts to FMSS and/or appointing
FMSS as the Managing Agent of AHTC, Sylvia Lim and Low Thia
Khiang have set up and/or allowed a system at the Town Council (the
“System”), which has effectively enabled Loh and How to be responsible
for certifying work done, approving payments and/or signing cheques to
FMSS/FMSI, to benefit themselves from the very same payments.
5.1.3 The features of the System are as follows:
a. First, invoices from FMSS to AHTC would be raised by How on
behalf of FMSS (in her capacity as director of FMSS), and
invoices from FMSI to AHPETC would be raised by Loh on
behalf of FMSI (in his capacity as sole proprietor of FMSI);
b. Second, How (in her capacity as General Manager) and/or Yeo (in
his capacity as Deputy General Manager), on behalf of the Town
Council, would certify the work done for a significant number of
these invoices, without any second review by another Town
Council Officer/member, despite How and Yeo being interested
parties to the transaction;
c. Third, the approval of the payment voucher and/or the cheque to
FMSS or FMSI would also be performed by How (in her capacity
as General Manager) on behalf of the Town Council, without any
second review by another Town Council Officer/member despite
How being an interested party to the transaction; and
STATEMENT OF CLAIM Page 26
d. Finally, Loh, on behalf of the Town Council, would also sign most
of the cheques to FMSS/FMSI.
5.1.4 Notwithstanding that the cheques to FMSS required also the co-signature
of the Town Council Chairman or Vice-Chairman, the AGO in the AGO
Audit were unable to determine if any independent verification of the
payments was made by the Town Council Chairman or Vice-Chairman at
the cheque-signing stage, by which point the certification of works and the
approval of payment would already have been given.
5.1.5 The KPMG Report found that under this System:
a. It is unlikely that the Chairman or Vice-Chairman would have
been independently informed as to whether the earlier
certifications in respect of the FMSS invoices were appropriate or
justified.
b. In fact, unlike FMSS, there was no internal requirement put in
place for the Chairman or Vice-Chairman to be co-signatory for
cheques issued or bank transfers in payment of the FMSI invoices.
c. The Town Council did not have protocols or processes in place to
independently and objectively assess the service levels of FMSS
and FMSI.
d. The Town Council’s governance of matters relating to FMSS and
FMSI was “seriously flawed”, involving pervasive control failures
STATEMENT OF CLAIM Page 27
(including a lack of financial operations and record-keeping), and
an unacceptably high degree of financial responsibility was
relinquished by the Town Councillors to the conflicted officers of
AHTC.
e. This exposed public funds to risks of erroneous payments,
overpayments, payments for which services had not been
sufficiently verified and payments without proper authority, as
well as the potential for actual misappropriation or civil or
commercial breach of trust.
5.1.6 In the premises, it is clear that the persons, i.e. Loh and How, who issued
the invoices on behalf of the payee (i.e. FMSS or FMSI) also certified the
work done and approved payment on behalf of the payor (i.e. the Town
Council) and/or signed off on the cheques. Effectively, these interested
persons had carte blanche in the Town Council to make payments to
FMSS/FMSI, which directly and financially benefitted themselves.
5.1.7 AHTC avers that the System is inherently flawed as it is clearly incapable
of providing:
a. Any independent and/or effective check against payments made by
the AHTC to FMSS/FMSI; nor
b. Any safeguard to public monies held by AHTC and/or AHTC’s
interest.
STATEMENT OF CLAIM Page 28
Accordingly, no Town Councillor could have reasonably approved the
System, without being in breach of his or her duties.
5.1.8 In this regard, the AGO Report and the KPMG Report have both
concluded that AHTC did not have the necessary checks and balances
with respect to payment to the related parties, FMSS and FMSI.
5.1.9 The AGO Audit found that a sum of $6,605,613.85 was paid to FMSS and
FMSI in FY2012-13 under the System, and this related to 84 invoices of
FMSS/FMSI.
5.1.10 The KPMG Report further found that, overall, a total sum of $33,717,535
was paid to FMSS and FMSI under the System, and all of these payments
were co-signed by conflicted officers of AHTC or employees of FMSS.
5.2 Void/Voidable Payments to FMSS/FMSI 5.2.1 For all the reasons set out in paragraph 5.1 above, AHTC contends that:
a. The FMSS Contracts and/or the FMSI EMSU Contract were
entered into in breach of fiduciary duties owed to AHTC by the
Town Councillors and the conflicted Town Council officers
(including Loh and How).
b. The conflicts of interest inherent in those transactions were so
severe that, without the implementation of appropriate safeguards,
those transactions were incapable of being authorised by AHTC
STATEMENT OF CLAIM Page 29
and/or the Town Councillors acting consistently with their
fiduciary duties.
c. Further, the decision of the Town Councillors to enter into the
transactions without ensuring appropriate safeguards were put in
place was a decision that no reasonable Town Councillors would
have made, and therefore, ultra vires AHTC.
5.2.2 In the premises, the total payments of $33,717,535 made to FMSS and
FMSI pursuant to, inter alia, the FMSS Contracts and/or the FMSI EMSU
Contract are voidable for breach of fiduciary duty and/or void in public
law. The breakdown of this total sum comprises the following:
a. A total sum of $5,447,603 in MA fees charged to AHTC by FMSS
during the period 15 July 2011 to 14 July 2012, pursuant to the 1st
MA Contract.
b. A total sum of $583,641 in fees charged to AHTC by FMSS
during the period 1 October 2011 to 30 June 2012, pursuant to the
1st EMSU Contract.
c. A total sum of $23,654,053 in MA fees charged to AHTC by
FMSS during the period 15 July 2012 to 14 July 2015, pursuant to
the 2nd MA Contract.
STATEMENT OF CLAIM Page 30
d. A total sum of $4,354,517 charged to AHTC by FMSS during the
period 1 July 2012 to 30 June 2015, pursuant to the 2nd EMSU
Contract.
e. A total sum of $442,200 charged to AHTC by FMSI during the
period 15 October 2007 to 14 October 2012, pursuant to the FMSI
EMSU Contract.
f. In respect of the above, an aggregate amount of $33,717,535 was
paid to FMSS and FMSI, whilst an amount of $764,479 has not
been paid.
5.2.3 Further, in this regard, AHTC would highlight the following relevant
findings made by AGO/PwC in the AGO Audit as well as subsequently
KPMG in their review of past payments of AHTC, concerning the
payments made to FMSS/FMSI:
a. In the AGO Audit:
i. AGO has found that “[t]here were control weaknesses, and
lack of documentary evidence that payments to the related
parties were independently verified so as to ensure that
work has been satisfactorily performed and payments were
fully justified and correctly computed”.
ii. PwC has, in turn, concluded that it was “unable to be fully
satisfied whether the TC appropriately entered into the
STATEMENT OF CLAIM Page 31
RPTs of the [2012] MA Contract and the [2012] EMSU
Contract [with FMSS] .. in FY2012/13 [and] unable to be
fully satisfied that all payments made to FMSS and FMSI
are fully justified and properly computed. Taken together,
[PwC was] not fully satisfied with the validity and
propriety over the RPTs.”
b. In the review of past payments of AHPETC, KPMG found that
“[t]he same pervasive Control Failures that allowed improper
payments would tend to conceal instances of improper payment
and, concurrently, determination of how much ought to be
recovered. It remains a real and reasonable prospect that there are
further instances of improper payments to FMSS or FMSI in
respect of which detection by an independent review is not readily
achievable.”
5.3 Improper Payments to FMSS / FMSI 5.3.1 Further and/or in the alternative, AHTC contends that, subject to the
Defendants showing otherwise in a proper account and inquiry, the
propriety of the total payments of $33,717,535 made to FMSS and FMSI
is called into question and/or this total sum of $33,717,535 comprised of
improper payments made to FMSS and FMSI.
5.3.2 The breakdown of such improper payments to FMSS and FMSI comprises
of the following:
STATEMENT OF CLAIM Page 32
a. A total sum of $5,447,603 in MA fees charged to AHTC by FMSS
during the period 15 July 2011 to 14 July 2012, pursuant to the 1st
MA Contract.
b. A total sum of $583,641 in fees charged to AHTC by FMSS
during the period 1 October 2011 to 30 June 2012, pursuant to the
1st EMSU Contract.
c. A total sum of $23,654,053 in MA fees charged to AHTC by
FMSS during the period 15 July 2012 to 14 July 2015, pursuant to
the 2nd MA Contract.
d. A total sum of $4,354,517 charged to AHTC by FMSS during the
period 1 July 2012 to 30 June 2015, pursuant to the 2nd EMSU
Contract.
e. A total sum of $442,200 charged to AHTC by FMSI during the
period 15 October 2007 to 14 October 2012, pursuant to the FMSI
EMSU Contract.
f. In respect of the above, an aggregate amount of $33,717,535 was
paid to FMSS and FMSI, whilst an amount of $764,479 has not
been paid.
5.3.3 AHTC further avers that:
a. Insofar as the payment of MA fees to FMSS is concerned, these
were on inflated rates, and in the first year where FMSS was the
STATEMENT OF CLAIM Page 33
MA, AHTC had in fact paid total MA fees of about 10% higher,
i.e. some $515,773 higher, than what would have been the total
MA fees if CPG had been retained as the MA.
b. Similarly, in the second year, higher MA fees paid to FMSS could
have been avoided and/or saved if CPG had been retained as the
MA. If AHTC had continued to use CPG’s rate for managing
agent services adjusted for inflation, it could have saved some
$746,000 between 15 July 2012 and 14 July 2015.
5.3.4 In the premises, as against Sylvia Lim, Low Thia Khiang, Loh and How,
jointly and severally, AHTC is entitled to:
a. A declaration that each and/or all of them have acted in breach of
their fiduciary duties owed to AHTC;
b. An account of profits made by each and/or all of them in breach of
their fiduciary duties owed to AHTC;
c. An order and/or declaration that any profits made by each and/or
all of them in breach of their fiduciary duties and/or traceable
proceeds of the same retained by them are held on constructive
trust in favour of AHTC, or alternatively, subject to an equitable
lien; and
d. Equitable compensation from each and/or all of them in respect of
any losses suffered by AHTC as a result of their said breaches of
STATEMENT OF CLAIM Page 34
fiduciary duty, including, inter alia, repayment of monies
wrongfully paid out by AHTC.
5.3.5 By reason of the same, as against FMSS and/or FMSI, AHTC is entitled to
an order and/or declaration that AHTC has rescinded and/or is entitled to
rescind the FMSS Contracts and/or the FMSI EMSU Contract, and is
entitled to the return of any and all payments made pursuant to the same.
5.3.6 Further and/or alternatively, against all Defendants and each of them, all
necessary accounts and enquiries, to determine the improper payments
made to the Defendants which AHTC is entitled to recover.
5.4 Payments to Other Third Parties in Breach of TCFR Provisions 5.4.1 AHTC breached Rule 74(1) of the TCFR for 10 construction projects,
each estimated to cost more than $70,000, by failing to invite a tender in
respect of each project, and/or to accept the lowest tender therefor.
5.4.2 Rule 74 of the TCFR states:
“Procedure for tenders
74.—(1) Unless waived under paragraph (17), tenders shall be invited for the execution of works or for any single item of stores or services estimated to cost more than $70,000.
… (15) The Town Council or the chairman, within the financial limit authorised by the Town Council, may for reasons to be disclosed with the acceptance, accept a tender which is not the lowest tender.
STATEMENT OF CLAIM Page 35
(16) The circumstances and reasons for not accepting the lowest tender which meets the specifications fully or very substantially must be fully justified and shall be recorded and open to scrutiny by the auditor.
(17) Tenders may be waived by the Town Council or the chairman as authorised within the limits of his financial authority to incur expenditure where —
(a) the supply of goods or services is known to be only within the capacity of a sole agent or a specialist contractor; (b) the urgency of the requirement makes it necessary; or (c) it is manifestly necessary in the public interest to do so.
(18) Waiver of tenders under paragraph (17)(b) or (c) shall only be used under very special circumstances and must be fully justified.
(19) The submission to the Town Council or the chairman for accepting a tender which is not the lowest tender under paragraph (15) or for waiver under paragraph (17), and the circumstances and justification for accepting any such tender or granting any such waiver, shall be recorded and made available to the auditor for inspection and audit.”
5.4.3 Instead of issuing separate tenders for each of these projects, AHTC
invited a tender for consultants on a fixed fee basis, with the intention of
choosing from a panel of pre-approved consultants to assist in managing
certain projects from time to time (the “Panel of Consultants”).
5.4.4 AHTC selected LST Architects and Design Metabolists through the
aforementioned process to be placed on a Panel of Consultants for certain
projects at fixed rates, and would from time to time engage either
consultant to provide services.
STATEMENT OF CLAIM Page 36
5.4.5 Insofar as the tender for the Panel of Consultants was a substitute for
inviting consultants to tender for each individual project, AHTC was still
required to choose the lowest priced consultant, unless pursuant to Rule
74(16) of the TCFR: (a) the circumstances and reasons for not accepting
the lowest tender are fully justified; and (b) this is recorded and left open
for scrutiny by an auditor.
5.4.6 LST Architects was engaged by AHTC for all 10 projects, and was
higher-priced than Design Metabolists in 7 of these projects without
adequate justification and/or without recording the circumstances and
reasons for doing so. The appointment of LST Architects in such
circumstances is a breach of Rule 74(15) and Rule 74(16) of the TCFR.
5.4.7 AHTC’s aforesaid breach of Rule 74(1) of the TCFR disentitled AHTC
calling for a fresh tender for each of the 10 construction projects and
thereby caused and/or suffered AHTC to lose the opportunity to receive
and accept tender bids that were lower in price in comparison to what had
been charged by LST Architects and Design Metabolists.
5.4.8 Further and/or in alternative, AHTC’s breach of Rule 74(15) and Rule
74(16) of the TCFR in appointing LST Architects instead of Design
Metabolists for 7 out of 10 construction projects caused and/or suffered
AHTC to incur an additional aggregate amount of $2,794,560 as set out
below:
STATEMENT OF CLAIM Page 37
S/N Contract Sum payable Sum payable, if Additional cost of Number to LST under DM had been appointing LST awarded appointed over DM ($) contract ($) ($)
1 OT/285(A)/12 509,087 210,000 299,087
2 OT/285(B)/12 673,767 210,000 463,767
3 OT/307/13 393,750 210,000 183,750
4 OT/316/13 584,745 210,000 374,745
5 OT/322/14 71,500 57,000 14,500 6 OT/303/13
7 OT/331/14 1,668,711 210,000 1,458,711
Total 2,794,560
6. BREACH OF CORE FIDUCIARY DUTY 6.1 Installation of FMSS: Sylvia Lim and Low Thia Khiang 6.1.1 Sylvia Lim and Low Thia Khiang engaged in a course of conduct in
breach of their various fiduciary duties set out in paragraph 2.1 above.
PARTICULARS
a. Each of them was at all material times following the 2011 General
Election aware that:
i. FMSS and/or FMSI would in reality be providing the same
services that had previously been supplied by the same
employees and/or service providers of Hougang SMC.
ii. In particular, Loh and How:
STATEMENT OF CLAIM Page 38
A. Were employees and directors of FMSS and/or
FMSI;
B. Were shareholders of FMSS and/or FMSI;
C. Were senior managers of AHTC; and
D. Would be acting for both AHTC and FMSS/FMSI
under the FMSS Contracts and the FMSI EMSU
Contract.
iii. The FMSS Contracts and the FMSI EMSU Contract would,
therefore, put Loh and How in a position of perpetual
conflict of interest and/or duty.
iv. The conflict of interest and/or duty inherent in the FMSS
Contracts and/or the FMSI EMSU Contract was such that,
without appropriate safeguards being implemented:
A. It was not in the best interests of AHTC to enter
into the FMSS Contracts and/or the FMSI EMSU
Contract; and
B. Public monies would be put unjustifiably at risk if
AHTC entered into the FMSS Contracts and/or the
FMSI EMSU Contract.
STATEMENT OF CLAIM Page 39
b. Notwithstanding their awareness of the matters set out at sub-
paragraph (a) above, Sylvia Lim and Loh Thia Khiang jointly or
severally:
i. Failed to disclose any or all of the matters set out at sub-
paragraph (a), or the System, to AHTC;
ii. Authorised, approved, acquiesced in and/or otherwise
caused AHTC to enter into the FMSS Contracts and the
FMSI EMSU Contracts, and did so:
A. At a higher price than had previously been paid for
what was in reality the same individuals providing
the same services without additional benefits to
AHTC;
B. At a higher price than AHTC would have had to
pay had it retained CPG as its Managing Agent for
the two years remaining on their Managing Agent
agreement, as set out in paragraph5.3.3 above;
C. Without appropriate safeguards for the protection of
AHTC’s interests and public money having been
put in place; and
D. Without appropriate disclosure of all the said
contracts and the System thereafter including, inter
STATEMENT OF CLAIM Page 40
alia, to all auditors, and in AHTC’s financial
statements in FY2012-2013.
6.1.2 In the premises:
a. The FMSS Contracts and/or the FMSI EMSU Contract and/or the
System were so tainted by conflicts of interest and/or so contrary
to the best interests of AHTC as to render them incapable of
approval by a Town Councillor acting consistently with his/her
fiduciary obligations of loyalty and fidelity;
b. Sylvia Lim’s and Low Thia Khiang’s entry into and/or
authorisation and approval of, or acquiescence in, the FMSS
Contracts and/or the FMSI EMSU Contract and/or the System
constituted breaches of their fiduciary duties as set out in
paragraph 2.1 above.
6.1.3 Further, Sylvia Lim and Low Thia Khiang breached their fiduciary duties
to AHTC by:
a. Waiving the need for quotations for certain transactions without
obtaining the necessary authorisation of the AHTC Chairman;
b. Awarding and/or acquiescing in and/or approving and/or
authorising the award of contracts pursuant to quotations/tenders
which were not the lowest quotations/tenders received, without
proper justification and/or evaluation;
STATEMENT OF CLAIM Page 41
c. Failing to maintain sufficient control over the expenses and
payments of AHTC, including:
i. Failing to put in place, maintain and/or enforce a payment
process with sufficient independent verification and
segregation of duties (see paragraphs 5.1.1 to 5.2.3 above);
ii. Failing to ensure that necessary and proper authorisations,
approvals, certifications, verifications and/or supporting
documents were obtained before payments were made from
AHTC to third parties (see paragraphs 5.1.1 to 5.3.6
above);
iii. Failing to ensure that payments from AHTC to third parties
were correctly made, including making and/or acquiescing
in and/or approving and/or authorising payments to
vendors under agreements at rates which were higher than
the agreed rates (see paragraphs 5.1.1 to 5.3.6 above);
iv. Failing to keep proper accounts and records of AHTC’s
transactions and affairs; and
v. By their actions as set out at paragraphs 4 to 5 above,
causing AHTC to be in breach in of the TCA and/or TCFR.
6.1.4 The aforesaid conduct amounted to breaches of the following duties by
Sylvia Lim and Low Thia Khiang and/or each of them:
STATEMENT OF CLAIM Page 42
a. The duty of loyalty and fidelity to AHTC; and
b. The duty of good faith: A duty to act honestly and in good faith in
the best interest of AHTC and for proper purposes at all material
times, and not for any personal, collateral, or other improper
purpose.
6.2 Remedies arising from breaches of core fiduciary duties 6.2.1 By reason of Sylvia Lim’s and Low Thia Khiang’s said breaches of
fiduciary duty, AHTC entered into the FMSS Contracts and/or the FMSI
EMSU Contract, pursuant to which it was charged the following:
a. A total sum of $5,447,603 in MA fees charged to AHTC by FMSS
during the period 15 July 2011 to 14 July 2012, pursuant to the 1st
MA Contract.
b. A total sum of $583,641 in fees charged to AHTC by FMSS
during the period 1 October 2011 to 30 June 2012, pursuant to the
1st EMSU Contract.
c. A total sum of $23,654,053 in MA fees charged to AHTC by
FMSS during the period 15 July 2012 to 14 July 2015, pursuant to
the 2nd MA Contract.
d. A total sum of $4,354,517 charged to AHTC by FMSS during the
period 1 July 2012 to 30 June 2015, pursuant to the 2nd EMSU
Contract.
STATEMENT OF CLAIM Page 43
e. A total sum of $442,200 charged to AHTC by FMSI during the
period 15 October 2007 to 14 October 2012, pursuant to the FMSI
EMSU Contract.
f. In respect of the above, an aggregate amount of $33,717,535 was
paid to FMSS and FMSI, whilst an amount of $764,479 has not
been paid.
6.2.2 AHTC further avers that:
a. In so far as the payment of Managing Agent fees to FMSS is
concerned, these were on inflated rates, and in the first year where
FMSS was the Managing Agent, AHTC had in fact paid total
Managing Agent fees of about 10% higher i.e. some $515,773
higher, than what would have been the total Managing Agent fees
if CPG FM had been retained as the Managing Agent.
b. Similarly, in the second year, higher Managing Agent fees paid to
FMSS could have been avoided and/or saved if CPG FM had been
retained as the Managing Agent. If AHTC had continued to use
CPG’s rate for Managing Agent, adjusted for inflation, it could
have saved some $746,000 between 15 July 2012 and 14 July
2015.
6.2.3 AHTC is entitled to the following remedies in respect of Sylvia Lim’s and
Low Thia Khiang’s breaches of the aforesaid core fiduciary duties:
STATEMENT OF CLAIM Page 44
a. A declaration that each and/or all of them have acted in breach of
their fiduciary duties owed to AHTC;
b. Equitable compensation from each and/or all of them in respect of
any losses suffered by AHTC as a result of their said breaches of
fiduciary duty, including, inter alia, repayment of monies
wrongfully paid out by AHTC, which, subject to Sylvia Lim and
Low Thia Khiang showing otherwise in a proper account and
inquiry, comprises the total payments of $33,717,535 made to
FMSS and FMSI. In this regard, AHTC repeats paragraphs 5.2 and
5.3 above;
c. At the minimum, Sylvia Lim and Low Thia Khiang are liable for
the higher MA fees that were paid to FMSS, i.e. $515,773 in
respect of the 1st MA Contract and $746,000 in respect of the 2nd
MA Contract. In the regard, AHTC repeats paragraphs 5.3
and6.2.2 above.
d. If necessary, an account of any profits (if any) made by each
and/or all of them in breach of their fiduciary duties owed to
AHTC; and/or
e. If necessary, an order and/or declaration that any profits (if any)
made by each and/or all of them in breach of their fiduciary duties
and/or the traceable proceeds of the same retained by them are
STATEMENT OF CLAIM Page 45
held on constructive trust in favour of AHTC, alternatively, subject
to an equitable lien.
6.2.4 Further and/or alternatively, against Sylvia Lim and Low Thia Khiang, all
necessary accounts and enquiries, to determine the improper payments
made to the Defendants which AHTC is entitled to recover.
6.3 Loh and How’s breach of core fiduciary duty 6.3.1 Loh and How engaged in a course of conduct in breach of their various
fiduciary duties set out in paragraphs 2.1 and 2.2 above through the
commission of the following acts as set out in this paragraph 6.3.
6.3.2 The Installation of FMSS and the appointments of Loh and How as
General Manager, Secretary and Deputy Secretary of AHTC caused Loh
and How to knowingly fail to act in the best interests of AHTC in breach
of their duty of loyalty and fidelity, their duty of good faith, the self-
declaration rule and the no-conflict rule.
PARTICULARS
a. The particulars in paragraphs 4, 5 and 6.1 above are repeated.
b. The appointment of Loh and How as Secretary and Deputy
Secretary of AHTC and the Installation of FMSS placed Loh and
How in a clear position of conflict whereby the duties of Loh and
How to AHTC would be set against their interest as directors and
shareholders of FMSS.
STATEMENT OF CLAIM Page 46
c. Loh and How failed to declare their interest in FMSS to the Town
Councillors at the 4 August 2011 Town Council Meeting.
6.3.3 The aforesaid conduct amounted to breaches of the following duties by
Loh and How and/or each of them:
a. The duty of loyalty and fidelity to AHTC;
b. The duty of good faith: A duty to act honestly and in good faith in
the best interest of AHTC and for proper purposes at all material
times, and not for any personal, collateral, or other improper
purpose;
c. The no-conflict rule: A duty to avoid placing oneself in a position
where there is a conflict, or potential conflict, between his
undivided loyalty and duty to AHTC, on one hand, and his
personal interest or the interest of a third party, on the other; and
d. The self-declaration rule: A duty to declare to AHTC if one held
any office or possessed any property which placed oneself in a
position of actual or potential conflict of interest between his
duties owed to AHTC and one’s personal interest or interests of
and/or duties owed to any third parties.
6.4 Loh and How: Dishonest Assistance 6.4.1 Loh and How dishonestly assisted the breaches of fiduciary duties
committed by Sylvia Lim and Low Thia Khiang.
STATEMENT OF CLAIM Page 47
PARTICULARS
a. Loh and How knew or ought to have known that Sylvia Lim and
Low Thia Khiang were acting in breach of their core fiduciary
duties, in particular, that the Installation of FMSS as a fait
accompli during the 4 August 2011 Town Council Meeting was
against AHTC’s best interests. Paragraphs 4, 5 and 6.1 above are
repeated.
b. Loh and How dishonestly assisted in Sylvia Lim and Low Thia
Khiang’s breaches of core fiduciary duty by, inter alia :
i. Securing the incorporation of FMSS on 15 May 2011 on
Low Thia Khiang’s instructions;
ii. Issuing a letter of intent from FMSS to AHTC to offer to
provide managing agent services to AHTC from 15 July
2011;
iii. Failing to properly disclose their interest as shareholders in
FMSS to the members of AHTC prior to or during the 4
August 2011 Town Council Meeting, thereby causing
and/or procuring AHTC to appoint Loh and How as
Secretary and Deputy Secretary of AHTC respectively.
This is consistent with an attempt to conceal from AHTC
STATEMENT OF CLAIM Page 48
their interest in FMSS and the true nature of the Installation
of FMSS.
c. Loh and How must have known the irregular shortcomings of:
i. The Installation of FMSS as a fait accompli during the 4
August 2011 Town Council Meeting; and
ii. Their appointment as Secretary and Deputy Secretary of
AHTC, coupled with the Installation of FMSS, that placed
them in a clear position of conflict.
d. Loh and How’s knowledge of the Installation of FMSS was such
as to render their participation and/or assistance in Sylvia Lim and
Low Thia Khiang’s breaches of core fiduciary duties contrary to
normally acceptable standards of honest conduct.
e. As a result of Loh and How dishonestly assisting Sylvia Lim and
Low Thia Khiang’s breaches of their core fiduciary duties as set
out above, AHTC made improper payments to FMSS. Paragraphs
4, 5 and 6.1 above are repeated.
6.5 Remedies for breach of Loh and How’s core fiduciary duties 6.5.1 AHTC is entitled to the following remedies against Loh and How in
respect of their breach of core fiduciary duties owed to AHTC and
dishonestly assisting in Low Thia Khiang and Sylvia Lim’s breaches of
their core fiduciary duties:
STATEMENT OF CLAIM Page 49
a. A declaration that each and/or all of them have acted in breach of
their fiduciary duties owed to AHTC;
b. Equitable compensation against Loh and How for all losses arising
from or in connection with the appointment of FMSS as Managing
Agent and improper payments made to FMSS/FMSI under the
FMSS Contracts and the FMSI EMSU Contract, which, subject to
Loh and How showing otherwise in a proper account and inquiry,
comprise the total payment of $33,717,535 made to FMSS and
FMSI. In this regard, AHTC repeats paragraphs 5.2 and 5.3 above;
c. An account of the profits received by Loh and How in breach of
their fiduciary duties; and/or
d. An order and/or declaration that any profits (if any) made by each
and/or all of them in breach of their fiduciary duties and/or the
traceable proceeds of the same retained by them are held on
constructive trust in favour of AHTC, alternatively, subject to an
equitable lien.
6.5.2 Further and/or alternatively, against Loh and How, all necessary accounts
and enquiries, to determine the improper payments made to the
Defendants which AHTC is entitled to recover.
STATEMENT OF CLAIM Page 50
6.6 The decision to enter into the FMSS Contracts and/or the FMSI EMSU Contract was ultra vires and void in Public Law 6.6.1 The Plaintiff avers that, by reason of, inter alia, the matters set out at
paragraphs 4, 5 and 6.1 above, the decision by AHTC which was brought
about by Sylvia Lim and Low Thia Khiang to enter into the FMSS
Contracts and/or the FMSI EMSU Contract:
a. Was made in bad faith and/or for improper purposes including,
inter alia, the benefit of How, Loh, FMSS and/or FMSI;
b. Failed to take into account relevant considerations including, inter
alia, the need to ensure adequate safeguards for the best interests
of AHTC and public monies; and
c. Was so unreasonable and/or irrational that no reasonable Town
Councillor would have made the same decision.
6.6.2 In the premises:
a. The FMSS Contracts and/or the FMSI EMSU Contract were ultra
vires the powers of AHTC and void in public law;
b. AHTC is entitled as against FMSS and/or FMSI to set aside and/or
rescind the FMSS Contracts and/or the FMSI EMSU Contract; and
c. AHTC is entitled as against FMSS and/or FMSI to restitution of all
payments made pursuant to the FMSS Contracts and/or the FMSI
EMSU Contract.
STATEMENT OF CLAIM Page 51
7. BREACH OF DUTY OF CARE AND SKILL 7.1 Sylvia Lim and Low Thia Khiang: Appointment of FMSS 7.1.1 Sylvia Lim and Low Thia Khiang breached their duty of care and skill qua
fiduciary and/or duty of care and skill in tort to AHTC by failing to
exercise proper scrutiny in causing AHTC to improperly waive the tender
for the 1st MA Contract and awarding the 1st MA Contract and 2nd MA
Contract to FMSS.
7.1.2 AHTC further avers that the Installation of FMSS occurred in the context
of misleading statements and material non-disclosures that were permitted
to stand uncorrected by Sylvia Lim and/or Low Thia Khiang.
PARTICULARS
a. There is no record of disclosure made at the 4 August 2011 Town
Council Meeting that Loh and How were the owners of FMSS
although this was well known to at least Sylvia Lim and Low Thia
Khiang;
b. There is no record of any discussion on the position of conflict
created by the appointment of Loh and How as Secretary and
Deputy Secretary of AHTC;
c. The alleged urgent need to replace CPG due to the “tight
timeframe and urgency” raised at the 4 August 2011 Town Council
Meeting was misleading since:
STATEMENT OF CLAIM Page 52
i. AHTC was legally entitled to retain CPG under the terms
of the CPG Contract until at least 31 July 2013.
ii. AHTC could have retained CPG until a tender had been
called and a managing agent appointed and/or shortened
the tender process.
iii. The “tight timeframe and urgency” was self-inflicted:
AHTC signed the deed of release and discharged CPG on 1
August 2011. However, the Town Council meeting to seek
the waiver of tender was held only on 4 August 2011, when
CPG was already out of the picture.
d. The circumstances, as recorded in the minutes of the 4 August
2011 Town Council Meeting, did not justify the waiver of the
tender in respect of the 1st MA Contract since, inter alia:
i. The appointment of FMSS caused AHTC to incur
additional costs.
ii. The fees proposed by FMSS were entirely arbitrary – being
calculated based on (i) the rates charged under the CPG
Contract; and (ii) annual staff costs of the former Hougang
Town Council, based on its audited financial statements for
the year ended 31 March 2011. There was no basis for
STATEMENT OF CLAIM Page 53
using the CPG Contract rates as a method of pricing
FMSS’s services.
iii. There is no record of any discussion on the feasibility of
holding CPG to its full contractual term or least until a
proper legitimate tender process was undertaken to replace
CPG.
iv. There is no record to suggest AHTC considered the serious
conflicts of interest in the appointment of FMSS, namely,
that the proposed appointment of FMSS would involve Loh
and How taking key management positions in AHTC and
thereby causing Loh and How’s duty to AHTC to be in
conflict with their ownership interest in FMSS.
v. The failure to hold a tender prior to the appointment of
FMSS under the 1st MA Contract was a breach of Rule 74
of the TCFR.
7.1.3 AHTC incurred losses in electing to appoint FMSS as managing agent
instead of retaining CPG under the CPG contract. Paragraphs 4 and 5.3.3
above are repeated.
7.2 Remedies for breach of duty of care and skill 7.2.1 AHTC is entitled to equitable compensation and/or damages for all losses
arising from or in connection with the 1st MA Contract and the 2nd MA
STATEMENT OF CLAIM Page 54
Contract in respect of Sylvia Lim and Low Thia Khiang’s breach of their
duties of care and skill qua fiduciary and/or duty of care and skill in tort.
7.3 Sylvia Lim: Improper Payments 7.3.1 Sylvia Lim was an authorised cheque signatory under Rule 33 of the
TCFR, for the duration of her appointment as Chairman of AHTC. Rule
33 of the TCFR states:
“Bank instructions and authorised cheque signatories
33.—(1) Instructions to banks relating to changes of authorised cheque signatories and variation of any other authority shall be signed by the secretary and countersigned by the chairman.
(2) Authorised cheque signatories are as follows:
(a) cheques not exceeding $50,000 or such lesser Secretary and an officer amount as authorised by the — authorised by the Town Town Council from time to Council time Chairman or vice-chairman and secretary or an officer (b) all other cheques — authorised by the Town Council.
(3) A Town Council may use any mode of payment other than cheques to effect payments, and instructions pertaining to such mode shall be authorised by the stipulated cheque signatories.”
7.3.2 Sylvia Lim, as Chairman of AHTC and co-signatory of cheques issued to
FMSS, owed a duty to properly scrutinise each payment and underlying
documents to ensure that FMSS’s work and service levels justified the
payment and that the payments were consistent with the contractual and
statutory obligations of AHTC.
STATEMENT OF CLAIM Page 55
7.3.3 Sylvia Lim breached her duty of care and skill qua fiduciary and/or duty
of care and skill in tort to AHTC by failing to conduct proper checks
before signing off on cheques in favour of FMSS.
PARTICULARS
a. An internal protocol was put in place for payments to FMSS: The
cheque co-signatory must be the Chairman or Vice Chairman of
AHTC. A resolution in these terms was passed at the Town
Council meeting held on 8 September 2011.
b. In signing off on cheques to FMSS without properly scrutinising
the payments and/or adequate verification, Sylvia Lim breached
her duty of care. Paragraph 5 above is repeated.
7.4 Remedies for Sylvia Lim’s breach of duty of care and skill 7.4.1 AHTC is entitled to equitable compensation and/or damages in the amount
of the improper payments made to FMSS for which Sylvia Lim was the
cheque co-signatory as set out in paragraph 7.3 above.
7.5 The Committee members’ breach of duty of care and skill – engaging LST Architects for 7 projects involving costs in excess of $70,000 without tender 7.5.1 The Committee members viz Sylvia Lim, Pritam Singh, David Chua and
Kenneth Foo, owed a duty to properly discharge their office as members
of the Committee which included, inter alia, a positive obligation to
STATEMENT OF CLAIM Page 56
comply with and abide by the statutory obligations, in particular Rule 74
of the TCFR.
7.5.2 The Committee members and each of them breached their duty of care and
skill qua fiduciary and/or duty of care and skill in tort to AHTC by (a)
causing AHTC to appoint LST Architects and Design Metabolists to the
Panel of Consultants and by awarding contracts for 10 projects to the
contractors on this Panel of Consultants without calling for a separate
tender for each project; and (b) in respect of 7 out of 10 construction
projects, awarding the contracts to LST Architects despite Design
Metabolist being the lower-priced contractor.
PARTICULARS
a. Rule 74(1) of the TCFR requires town councils to invite tenders
for the execution of works or for any single item of stores or
services estimated to cost more than $70,000, unless otherwise
waived pursuant to Rule 74(17).
b. Rule 74(17) of the TCFR provides that tenders may be waived by
the Town Council or the Chairman within limits of financial
authority to incur expenditure where: (a) the supply of goods or
services is known to be only within the capacity of a sole agent or
specialist contractor; (b) the urgency of the requirement makes it
necessary; or (c) it is manifestly necessary in the public interest to
do so. It is further stipulated in Rule 74(18) of the TCFR that the
STATEMENT OF CLAIM Page 57
waiver of tender under grounds (b) or (c) “shall only be used under
very special circumstances and must be fully justified”.
c. In addition, Rules 74(15) and (16) of the TCFR provide that,
whilst the Town Council or the Chairman (within the financial
limit authorised by the Town Council) may accept a tender which
is not the lowest tender, the “circumstances and reasons for not
accepting the lowest tender which meets the specifications fully or
very substantially must be fully justified and shall be recorded and
open to scrutiny by the auditor.”
d. In breach of Rule 74 of the TCFR, the Committee members and
each of them caused AHTC to appoint LST Architects and Design
Metabolists to the Panel of Consultants instead of calling for
separate tenders therefor and to award contracts for the 10 projects
to the contractors on this Panel of Consultants.
e. In addition, in respect of 7 out of 10 of such construction projects,
the Committee members and each of them caused AHTC to award
the contract to the higher-priced contractor on the Panel of
Consultants, namely, LST Architects. AHTC avers that the
circumstances for and reasons for not appointing Design
Metabolists as the lower-priced contractor or for not calling for
separate tenders therefor were not justified. Had Design
STATEMENT OF CLAIM Page 58
Metabolists been appointed for these 7 construction projects,
AHTC would not have been liable to pay an additional $2,794,560.
f. By reason of the above, AHTC has suffered loss and damage in the
form of: (i) the loss of the opportunity to receive and accept tender
bids that were lower in price in comparison to what had been
charged by LST Architects and Design Metabolists, to be assessed;
and/or (ii) losses in the amount of $2,794,560 arising from the
appointment of LST Architects over Design Metabolists for 7
construction projects.
g. Paragraph 5.4 is repeated herein.
7.6 Remedies for Committee members’ breach of duty of care and skill 7.6.1 In respect of the Committee members’ breach of their duties of care and
skill qua fiduciary and/or duty of care and skill in tort, AHTC is entitled to
equitable compensation and/or damages (to be assessed) for the failure to
ensure that AHTC called separate tenders for each of the 10
aforementioned construction projects; or, in the alternative, damages in
the amount of $2,794,560 on account of losses in appointing LST
Architects over Design Metabolists for 7 out of 10 construction projects.
8. KNOWING RECEIPT: FMSS & FMSI 8.1 Liability to Account 8.1.1 Further and/or in the alternative, FMSS and FMSI are liable to account for
AHTC’s monies received in breach of fiduciary duty.
STATEMENT OF CLAIM Page 59
8.1.2 Sylvia Lim, Low Thia Khiang, Loh and How had disposed or caused to be
disposed AHTC’s assets in breach of their fiduciary duty.
PARTICULARS
a. Improper payments were made to FMSS and FMSI by AHTC in
breach of the core fiduciary duties of Sylvia Lim, Low Thia
Khiang, Loh and How. Paragraph 6 above is repeated.
b. Further and/or in the alternative, improper payments were made to
FMSS and FMSI by AHTC in breach of Sylvia Lim’s and/or Low
Thia Khiang’s duty of care and skill qua fiduciary. Paragraphs 7.1
to 7.4 above is repeated herein.
8.1.3 Improper payments were received by FMSS and FMSI. FMSS and FMSI
had knowledge that these monies were paid and received by FMSS and
FMSI in breach of trust as set out in paragraph 8.1.2 above, such as to
make it unconscionable for FMSS and FMSI to retain the benefit of these
monies.
8.1.4 Accordingly, FMSS and FMSI are liable to AHTC for knowing receipt of
the monies received from AHTC and/or for dishonest assistance of the
said breaches. It would be unconscionable for FMSS and FMSI to retain
such monies from AHTC, which were paid in breach of Sylvia Lim’s,
Low Thia Khiang’s, Loh’s and How’s breach of fiduciary duties.
8.1.5 In the premises, as against FMSS, AHTC is entitled to:
STATEMENT OF CLAIM Page 60
a. An order and/or declaration that FMSS and FMSI are liable to
account to AHTC in the manner of a constructive trustee by
reasons of their knowing receipt of payments made in breach of
fiduciary duties owed to AHTC and/or their dishonest assistance of
the same;
b. An order and/or declaration that FMSS and FMSI hold any monies
paid to them in breach of fiduciary duties owed to AHTC and/or
traceable proceeds of the same retained by them on constructive
trust for AHTC, alternatively, subject to an equitable lien; and/or
c. Equitable compensation in respect of any losses suffered by AHTC
as a result of FMSS’s and FMSI’s knowing receipt and/or
dishonest assistance, including, inter alia, repayment of monies
wrongfully paid out by AHTC, which, subject to FMSS and FMSI
showing otherwise in a proper account and inquiry, comprises the
total payments of $33,717,535 made to FMSS and FMSI.
AND THE PLAINTIFF CLAIMS AGAINST THE DEFENDANTS:
1. In respect of the loss and damage suffered on the FMSS Contracts and
FMSI EMSU Contract and/or improper payments made to FMSS and
FMSI, as set out in paragraphs 4 to 7 above:
a. As against Sylvia Lim and Low Thia Khiang:
STATEMENT OF CLAIM Page 61
i. Declarations that Sylvia Lim and Low Thia Khiang have
breached their fiduciary duty and duty of care owed to
AHTC as set out in paragraphs 6.1 and 6.2 above;
ii. Equitable compensation in respect of any losses suffered by
AHTC as a result of their breaches of fiduciary duties
including, inter alia, repayment of monies wrongfully paid
out by AHTC to FMSS and FMSI, which, subject to Sylvia
Lim and Low Thia Khiang showing otherwise in a proper
account and inquiry, comprises of total payments of
$33,717,535 made to FMSS and FMSI;
iii. In the alternative, at the minimum, Sylvia Lim and Low
Thia Khiang are liable for the higher MA fees that were
paid to FMSS, i.e. $515,773 in respect of the 1st MA
Contract and $746,000 in respect of the 2nd MA Contract.
iv. In the alternative, damages for their breaches of duty of
care, including loss and damage on the 1st MA Contract
and 2nd MA Contract as set out above in paragraphs 7.1 to
7.4.1;
v. If necessary, an account of any profits (if any) made by
each and/or all of them in breach of their fiduciary duties
owed to AHTC; and/or
STATEMENT OF CLAIM Page 62
vi. If necessary, an order and/or declaration that any profits (if
any) made by each and/or all of them in breach of their
fiduciary duties and/or traceable proceeds of the same
retained by them are held on constructive trust in favour of
AHTC, alternatively, subject to an equitable lien;
b. As against Low and How:
i. Declarations that Loh and How have breached their
fiduciary duties and/or dishonestly assisted the breaches of
fiduciary duties committed by Sylvia Lim and Low Thia
Khiang as set out in paragraphs 6.3 to 6.5 above;
ii. Equitable compensation for all losses arising from or in
connection with the appointment of FMSS as Managing
Agent, and improper payments made to FMSS/FMSI under
the FMSS Contracts and the FMSI EMSU Contract, which,
subject to Loh and How showing otherwise in a proper
account and inquiry, comprises of the total payments of
$33,717,535 made to FMSS and FMSI;
iii. An account of any profits made by each and/or all of them
in breach of their fiduciary duties owed to AHTC; and/or
iv. An order and/or declaration that any profits made by each
and/or all of them in breach of their fiduciary duties and/or
STATEMENT OF CLAIM Page 63
the traceable proceeds of the same retained by them are
held on constructive trust in favour of AHTC, alternatively,
subject to an equitable lien;
c. As against FMSS and FMSI:
i. An order and/or declaration that FMSS and FMSI are liable
to account to AHTC in the manner of a constructive trustee
by reason of their knowing receipt of payments made in
breach of fiduciary duties owed to AHTC and/or their
dishonest assistance of the same;
ii. An order and/or declaration that FMSS and FMSI hold any
monies paid to them in breach of fiduciary duties owed to
AHTC and/or traceable proceeds of the same retained by
them (and any accretions in value) (the “Trust Assets”) on
constructive trust for AHTC, alternatively, subject to an
equitable lien.
iii. Payment and/or delivery up (as the case may be) to AHTC
by FMSS and FMSI of the Trust Assets;
iv. Equitable compensation in respect of any losses suffered by
AHTC as a result of FMSS’s and FMSI’s knowing receipt
and/or dishonest assistance, including, inter alia,
repayment of monies wrongfully paid out by AHTC,
STATEMENT OF CLAIM Page 64
which, subject to FMSS and FMSI showing otherwise in a
proper account and inquiry, comprises the total payment of
$33,717,535 made to FMSS and FMSI; and/or
v. In the alternative, an order and/or declaration that AHTC
has rescinded and/or is entitled to rescind the FMSS
Contracts and the FMSI EMSU Contract, and is entitled to
the restitution of all payments made under the FMSS
Contracts and the FMSI EMSU Contract.
2. In respect of improper payments to LST Architects in breach of the TCFR
as set out in paragraphs 5.4 and 7.5 to 7.6 above,
a. Declarations that Sylvia Lim, Pritam Singh, Chua Zhi Hon and
Kenneth Foo and each of them, in their respective capacities as
members of the Committee, have breached their duties of care
owed to AHTC as set out in paragraph 7.5 above;
b. As against Sylvia Lim, Pritam Singh, Kenneth Foo and Chua Zhi
Hon, jointly and severally, in their respective capacities as
members of the Committee:
i. Damages and/or equitable compensation to be assessed for
the failure to ensure that AHTC called separate tenders for
each of the 10 aforementioned construction projects as set
out in paragraphs 5.4 and 7.5 to 7.6 above; or,
STATEMENT OF CLAIM Page 65
ii. In the alternative, damages and/or equitable compensation in
the amount of $2,794,560 as representing the losses in
appointing LST Architects over Design Metabolists for 7 out
of 10 construction projects as set out in paragraphs 5.4 and
7.5 to 7.6 above;
3. As against all Defendants and each of them:
a. Interest;
b. Costs, including but not limited to costs incurred by AHTC in
investigating and remedying the Defendants’ breaches as set out
above;
c. All necessary accounts and enquiries as to the monies wrongfully
paid out from AHTC as a result of the Defendants’ breaches, and
payment to AHTC of all sums which shall be found to be due to it
upon the taking of such accounts and enquiries; and
d. Further or other relief.
Dated the 21st day of July 2017
SHOOK LIN & BOK LLP
SOLICITORS FOR THE PLAINTIFF
STATEMENT OF CLAIM Page 66
This writ is issued by Shook Lin & Bok LLP of 1 Robinson Road #18-00 AIA
Tower, Singapore 048542, solicitors for the said Plaintiff whose address is Block
810 Hougang Central #02-214 Singapore 530810.
.
This Writ was served by of by way of personal service/in accordance with the terms of an order for substituted service on the Defendants who is known to me/who was pointed out to me by /who admitted to me on the day of 2017.
Endorsed this day of 2017
Process Server