SINGAPORE — The Workers’ Party Members of Parliament (MPs) at the centre of an ongoing high-profile lawsuit reiterated in their closing submission to the High Court that they acted in good faith when handling town council matters.

But the lawyers representing Aljunied-Hougang Town Council (AHTC), which is suing them, argued in their submission that the MPs’ actions “severely damaged” the town council’s financial position while enriching the managing agent that they had brought in.

The various parties involved in the suit filed their closing submissions last Friday (Jan 18) — marking another milestone of a saga which has been going on for almost six years and counting. This followed a 17-day trial that took place in October last year.

AHTC is seeking to claim S$33.7 million of “improper” payments made to AHTC’s former managing agent FM Solutions and Services (FMSS) and contractor FM Solutions and Integrated Services (FMSI).

FMSS was brought in by the WP MPs to provide estate management services.

Pasir Ris-Punggol Town Council (PRPTC) is also suing the WP MPs to recover any losses allegedly incurred back when the WP-led town council managed the Punggol East constituency.

These are the key points from the closing submissions:

WP MPs’ ACTED IN GOOD FAITH

Senior Counsel Chelva Retnam Rajah from Tan Rajah & Cheah, representing former WP chief Low Thia Khiang, party leader Pritam Singh and chairman Sylvia Lim, wrote in his closing submission:

• Town councils are of “a political nature and are intended to be managed by the elected MPs with as much latitude as possible within the broad and general rules laid”.

• At all times, the WP MPs acted in “good faith and in execution” of the Town Councils Act (TCA) and Town Councils Financial Rules (TCFR).

• While the town councillors owe statutory duties under the TCA, that does not mean there is a fiduciary obligation unless Parliament “clearly intended otherwise”.

• There was nothing improper about the appointments and payments as they were based on AHTC’s due processes. The town councils’ lawyers have not proven that AHTC paid FMSS more than what is due under the contracts.

• The sum of money that AHTC seeks to claim is unreasonable, as it amounted to all payments made to FMSS and FMSI. This contradicts the previous assessment made by accounting firm KPMG, which stated that there was an alleged improper payment of slightly over S$1.5 million, with only about S$624,000 to be recovered.

• Neither AHTC nor PRPTC can make claims for equitable compensation unless they have suffered a loss, such as a shortfall in service delivery to residents.

• The two town councils relied only on KPMG and PwC reports as basis for their claims. In addition, the town councils’ witnesses had no personal knowledge of the facts and circumstances that the town councillors faced on the ground.

AHTC’S FINANCIAL POSITION SEVERELY DAMAGED

The lawyer for AHTC, David Chan from Shook Lin and Bok LLP, and PRPTC’s lawyer Senior Counsel Davinder Singh of Drew & Napier, said in their submissions:

• There was a “particularly disturbing consequence” from the appointment of FMSS as a managing agent.

• Both FMSS and FMSI “were effectively given carte blanche over AHTC’s payment process”, allowing it to enjoy “extraordinary profits”, which rose over 300 per cent between 2011 and 2015. In contrast, AHTC’s financial position was “severely damaged”.

• The decision to enter into contracts with FMSS or FMSI “is void in public law” as town councillors “unquestioningly” followed Ms Lim and Mr Low’s lead, failing to take into account that certain information was withheld or misrepresented.

• The WP MPs are “not entitled” to Section 52 of the TCA, which says that no suit or other legal proceedings can be filed against any member, officer, or employee of a Town Council for anything which is done in good faith.

• The MPs have gotten that section “completely wrong”, as “good faith is hardly an apt description” of their conduct. Based on evidence and testimonies provided by the WP MPs, they were determined to “hide the truth”.

• Ms Lim misrepresented the facts. Mr Chan, for example, said she would not hesitate to “concoct evidence or be evasive to avoid making admissions under oath”, and that her cross-examination revealed that her previous statements on the issue in Parliament were “at best, inaccurate and, at worst, untruthful”.

WHAT THEY SAID:

WP MPs lawyer Senior Counsel Chelva Retnam Rajah: “Plaintiffs attempted to build their case by subjecting the Defendants to the standards of perfect hindsight using hypothetical scenarios that did not take into consideration the actual circumstances that the Town Councillors faced at the time.”

PRPTC’s lawyer Senior Counsel Davinder Singh: “They have got it completely wrong. Section 52 does not apply to instances where town councillors and officers breach their duties to the town council. In any event, “good faith” is hardly an apt description of conduct as described above.”

WHAT’S NEXT

The various parties have until the middle of next month to file replies to each other’s submissions. They will then present their oral submissions in March.

ABOUT THE CASE:

The three WP MPs – Mr Low, Ms Lim and Mr Singh – are embroiled in two multi-million-dollar civil lawsuits initiated by an independent panel acting on behalf of the WP-run AHTC as well as PRPTC.

Aside from the WP MPs, other parties being sued include former AHTC town councilors Chua Zhi Hon and Kenneth Foo. Separately, FMSS, its director and shareholder How Weng Fan, as well as her late husband FMSS owner Danny Loh, are also being sued.

Here was how the protracted saga unraveled:

• May 2011: At the General Election on May 11, WP won the five-member Aljunied GRC and retained the single seat of Hougang. It formed the Aljunied-Hougang Town Council (AHTC). FMSS was set up on May 15.

• Jan 2013: WP won the single seat of Punggol East in a by-election, and folded it into its existing town council, which was renamed as the Aljunied-Hougang-Punggol East Town Council (AHPETC).

• May 2013: During a Parliamentary debate, People’s Action Party (PAP) MPs questioned the WP about a possible conflict of interest arising from the fact that FMSS was owned by WP supporters

• Feb 2015: The Auditor-General’s Office (AGO) carried out an audit of AHPETC and found several lapses in governance and compliance. It was revealed that Mr Loh was also the secretary of the town council, with the power to co-sign cheques, while his wife Ms How was the general manager of AHPETC. Both husband and wife were longtime WP supporters. In a Parliamentary debate that same month, PAP leaders accused the WP MPs of breaching their fiduciary duties. The opposition MPs denied the allegations.

• July 2015: Mr Loh died after an accidental fall in Japan.

• Sept 2015: WP lost Punggol East to the PAP in the General Election. The town council was renamed AHTC.

• Nov 2015: The Court of Appeal ordered AHTC to appoint accountants to fix lapses found by the AGO.

• Nov 2016: Accounting firm KPMG found “improper payments” worth over S$33.7 million to FMSS and FMSI.

• Feb 2017: AHTC appointed an independent panel to review the findings of the KPMG report.

• July 2017: The panel, on behalf of AHTC, filed a suit against the three WP MPs to claim back the money. WP said it would contest the suit.

• Sept 2017: PRPTC also filed a suit against the three WP MPs for losses allegedly incurred back when WP ran Punggol East constituency.

• Oct 5, 2018: The trial relating to the two suits began. It ended on Oct 30.