AHTC trial: Defendants acted ‘in good faith’ at all times, say lawyers in closing submissions

AHTC trial: Defendants acted ‘in good faith’ at all times, say lawyers in closing submissions

AHTC (1)
Aljunied-Hougang Town Council. (File photo: Ngau Kai Yan)

SINGAPORE: Lawyers for defendants in the landmark Aljunied-Hougang Town Council (AHTC) trial filed their closing submissions on Friday (Jan 18), reiterating their stance that the town councillors – including three Workers’ Party Members of Parliament – acted in good faith at all material times, and in execution of the Town Council Act (TCA) and Town Councils Financial Rules (TCFR).

In the closing submissions which Channel NewsAsia obtained on Monday (Jan 21), lawyers from Tan Rajah & Cheah also said that the town councillors owe only statutory duties which they have acted in accordance with.

The firm represents the three WP MPs Low Thia Khiang, Sylvia Lim and Pritam Singh, as well as former AHTC town councillors Chua Zhi Hon and Kenneth Foo. They are five of eight defendants being sued by AHTC and Pasir Ris-Punggol Town Council (PRPTC) over alleged improper payments involving millions of dollars.

They are also accused of breaching their fiduciary duties in the appointment of town council managing agent FM Solutions and Services (FMSS).

Other defendants involved in the suit are director and shareholder of FMSS How Weng Fan, and her late husband FMSS owner Danny Loh. The last defendant is FMSS itself.  

READ: AHTC trial - Managing agent enjoyed 300 per cent profit increase as town council's finances suffered, say lawyers

In the plaintiffs’ closing submissions, AHTC’s lawyers from Shook Lin and Bok called for the court to allow its claims of S$33.7 million from the eight defendants, with costs.

They reiterated that the defendants breached their duties of loyalty, fidelity and of good faith, and in particular, Mr Low and Ms Lim had “acted in bad faith in their dealings with FMSS”.

But lawyers for the first five defendants contended that while there are statutory duties owed by the town councillors in accordance with the TCA, the statutory duties owed “does not give rise to a fiduciary obligation” unless Parliament intended otherwise.

It would also be “unduly onerous” to saddle resident volunteers such as Mr Chua and Mr Foo, they added, with fiduciary duties, as they are laymen volunteering their services “for the common good”, and were only paid an honorarium of S$300 each a month.

Meanwhile, lawyers for the three other defendants also contended in their closing submissions that Mr Loh and Ms How’s appointments were for administrative purposes and did not carry fiduciary duties.

READ: What makes a "responsible" town councillor? Low Thia Kiang, PRPTC lawyer cross swords at AHTC trial

The lawyers from Netto & Magin LLC pointed out that Mr Loh and Ms How were not members of the town council and did not have voting rights or decision-making powers. Furthermore, they added, as Mr Loh and Ms How were not town councillors, Section 15 of the TCA, which restricts disclosure of interest to members of the town council, does not apply to them.

Nonetheless, they said, the two had made disclosures of their interest in FMSS to the plaintiffs.

“Mr Loh and Ms How had at all material times acted honestly and in good faith and had fully disclosed their interest in FMSS to the town councillors of AHTC,” they wrote.

“INCONSISTENT AND UNSUSTAINABLE POSITIONS” OF KPMG, PWC WITNESSES

The lawyers for the first five defendants also stressed that the appointments of FMSS, its service provider FMSI, the third-party contractors as well as the payments made to them were done in accordance with the processes in AHTC and with the consent of the town councillors.

They added that there was “nothing improper” about these appointments and payments.

They also took issue with the witnesses called by AHTC and PRPTC, pointing out that the plaintiffs’ only basis for their claims are the reports by audit firms KPMG and Pricewaterhousecoopers (PwC), and that their sole witnesses, KPMG’s executive director Owen Hawkes and PwC partner Goh Thien Phong, have “no personal knowledge of the facts and circumstances existing at the material time” when the town councillors made their decisions and carried out the actions which are being impugned in the suits.  

“It is submitted that little weight should be accorded to the evidence of Mr Hawkes and Mr Goh given the inconsistent and unsustainable positions taken in respect of their roles in these proceedings,” the lawyers wrote.

Mr Hawkes, the lawyers said, was not an independent expert witness, but a factual witness called in support of AHTC’s case. Hence, they said, his evidence was therefore “partisan and ought not to be treated otherwise”.

As for Mr Goh, lawyers said it is apparent that he had played the role of not just an expert but as a consultant assisting in PRPTC’s case.

The lawyers for the three other defendants made a similar point, describing the audit reports as “inaccurate” and “prejudicial”.

READ: Town council performance has improved despite "many challenges", says AHTC

“The evidence presented provided an outsider’s perspective of what had taken place within AHTC over the span of four years that involved hundreds of thousands of documents, many people and physical events that cannot be revisited,” they wrote.

“The witnesses of both plaintiffs attempted to testify on matters which required personal knowledge and their testimonies were scanty and lacked credibility.”

DEFENDANTS SUBJECTED TO STANDARDS OF “PERFECT HINDSIGHT”

Lawyers for the first five defendants also submitted that in the course of cross-examination, the plaintiffs had attempted to build their case by subjecting the defendants to the “standards of perfect hindsight” using hypothetical scenarios that, they wrote, “did not take into consideration the actual circumstances that the town councillors faced at the time”.

They pointed out that the plaintiffs did not call any factual witnesses to challenge the town councillors’ evidence of the circumstances that they faced almost immediately after they were elected following the 2011 General Elections.

They pointed out that the plaintiff’s claims require the court to assess their decisions as to the appointments and payments made by AHTC with respect to FMSS, FMSI and the various third parties.

“In other words, the Honourable Court is being asked by the plaintiffs to second-guess the decisions of the town councillors,” they wrote. “It is submitted that neither the accountants nor the Honourable Court is in a position to state what the decisions should have been.”

Parties will have up to the middle of next month to file replies to each other’s submissions, before making oral submissions in person in March.

Source: CNA/lc

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