AHTC case: Workers' Party leaders awarded costs for appeals

SINGAPORE — Workers' Party (WP) leaders Pritam Singh, Sylvia Lim and Low Thia Khiang will be able to recover some legal fees in the long-running case involving the party's town council, after the apex court found they had succeeded substantially in their appeals and awarded costs to them.

The Court of Appeal also agreed that the trio could claim for the costs of using more than two lawyers in some instances — an exception to the usual rule — as the case had high stakes for all parties involved and dealt with complex issues of both law and fact.

The Nov 29 ruling followed previous judgments in July 2023 and November 2022 in which the apex court overturned several findings of the High Court, while confirming that senior WP leaders were liable to Aljunied-Hougang Town Council (AHTC) and Sengkang Town Council (STC) for negligence in certain respects.

Following the July decision, parties made written arguments on the costs to be awarded for the appeals.

In all, $351,965.62 in costs were awarded to Mr Singh, Ms Lim and Mr Low, as well as other town councillors, FM Solutions & Services (FMSS) and its employees. They were also awarded $36,817.01 in disbursements for out-of-pocket expenses such as photocopying and filing fees.

WP town councillors largely succeeded in their appeals: Court

In its latest judgment, the court said the WP town councillors did succeed substantially in their appeals. This included that they were found to have acted in good faith in the hiring of FMSS as AHTC's managing agent without an open tender.

In July, the apex court overturned an earlier finding by a lower court that Ms Lim and Mr Low had breached their fiduciary duties, and instead found that they had been negligent in allowing control failures to happen at the town council and in other miscellaneous payments.

The court also found that Mr Singh could not be held liable for negligence in AHTC's payments process, as he was not given the chance to defend himself against the claim.

As such, the court rejected AHTC's argument that it was the successful party in the appeals because some WP leaders were found to have been grossly negligent, and that it was thereby entitled to costs.

This argument "cannot be sustained on the facts because most of the issues in the appeals... were not found in AHTC's favour", it said.

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Instead, it agreed with the WP leaders and other town councillors involved in the case, who argued that they should be awarded costs as the majority of claims against them by AHTC and STC were dismissed as a result of the appeals.

This is although liability for some serious breaches was found to have been established even after the appeals, it noted.

Overall, the court said the town councillors were "successful in overturning the outcome reached in the court below on the majority of the issues" and should be entitled to claiming costs.

The costs due to the WP leaders and others are to be borne by both AHTC and STC. STC inherited the case from Pasir Ris-Punggol Town Council (PRPTC) after Punggol East SMC was subsumed into Sengkang GRC in 2020.

PRPTC had initiated a civil suit, parallel to AHTC's lawsuit, to recover losses incurred by Punggol East when the constituency was under the WP and managed by the WP-run town council from 2013 to 2015.

An independent panel appointed by AHTC had taken the WP leaders, several town councillors and the town council's managing agent to court over $33.7 million of improper payments made by AHTC between 2011 and 2015.

Central to the case is the WP leaders' hiring of FMSS, which was set up by Ms How Weng Fan and her now-deceased husband, Mr Danny Loh, who were later appointed deputy secretary and general manager, and secretary of AHTC, respectively, while remaining FMSS shareholders and directors.

The High Court found in 2019 that Mr Low and Ms Lim had breached their fiduciary duties to AHTC, and Mr Singh had breached his duties of skill and care, among other findings. The WP leaders then appealed against the judgment.

Reasonable to use more lawyers

In its Nov 29 decision, the court agreed with the WP leaders that their use of more than two lawyers to fight the appeals was warranted, due to its exceptional nature and complexity.

Typically, claims for the costs of more than two lawyers are not allowed unless the court grants a certificate that allows for it. This raises the amount of costs that can be claimed from the other party, in this case by 50 per cent.

The apex court noted that the appeals raised the important question of whether a public servant exercising statutory duties under public law is also subject to fiduciary and equitable duties. That a five-judge bench heard the appeals reflected the need for the assistance of lawyers with requisite knowledge and experience, they added.

Chief Justice Sundaresh Menon led the panel, which also comprised justices Judith Prakash, Tay Yong Kwang, Woo Bih Li and Andrew Phang.

The court said the numerous claims made by the town councils also necessitated careful analysis of evidence to put them in proper context, so as to determine the propriety of the contracts awarded by the WP town councillors.

In addition, the appeals involved voluminous materials comprising 206 bundles totalling 52,694 pages, the court said.

The stakes in the appeal were very high for all parties involved, with serious allegations against the WP leaders and town councillors, strong media interest and important questions of public interest raised.

"Viewed in its entirety, we agree... that the use of more than two counsel was reasonably necessary for the adequate presentation and preparation for the appeals," the court said.

Separate cost orders warranted

The court also made separate costs orders against STC, which argued against this.

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STC had accepted that costs orders should be made against it as the WP town councillors, employees and FMSS had succeeded on key issues in their appeal.

But it submitted that it should be subject to a single costs order, even though the different parties were represented by different law firms.

The court noted that implicit in STC's argument was the suggestion that the case did not justify separate legal teams.

To this, the court said that while it was true that there was some degree of shared interests between the parties, this "cannot be taken too far".

The interests of the town councillors and FMSS employees were aligned insofar as they relied on the same broad arguments, such as in the interpretation of laws and regulations.

"However, that in and of itself does not lead to the conclusion that the... decision to engage separate counsel was an unreasonable one," said the court.

It noted that there were some nuances and differences between the parties' positions and interests. For instance, the town councillors and employees made different arguments about the correct interpretation of the Town Councils Act.

Unlike the other parties involved, Mr Singh, Ms Lim and Mr Low were also elected MPs, and as such had to face potential political consequences on top of the legal consequences from the claims against them, the court said.

The parties also acted in rather distinct capacities in relation to AHTC's affairs, it added.

In determining the quantum of cost orders, the court said it took into account that there were issues found in AHTC and STC's favour, such as that the WP leaders and town councillors owed a duty of care and skill to the town councils and were thus liable for some of the claims.

Broadly, it applied a 15 per cent discount to the costs awarded due to the findings in AHTC and STC's favour.

ALSO READ: AHTC case: Court of Appeal finds Sylvia Lim, Low Thia Khiang liable for negligence; Pritam Singh cleared

This article was first published in The Straits Times. Permission required for reproduction.