High Court · Decided 27 May 2015

The Attorney-General v The Aljunied-Hougang-Punggol East Town Council

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[2015] SGHC 137Case no. Originating Summons No 250 of 2015 (Summons No 1299 of 2015)

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Quentin Loh J:
Introduction
[1] The Attorney-General, on behalf of the Government, acting through the Ministry of National Development (“MND”) filed Originating Summons No 250 of 2015 (“OS 250”) on 20 March 2015. The Defendant is the Aljunied-Hougang-Punggol East Town Council (“AHPETC”), a body corporate under the Town Councils Act (Cap 329A, 2000 Rev Ed) (“TCA”).
[2] The MND seeks the following:
[3] The MND also filed Summons No 1299 of 2015 (“SUM 1299”) on 20 March 2015 asking for the following orders:
[4] The parties have agreed to address me on both OS 250 and SUM 1299 and have further agreed that I decide both the OS and Summons at the same time as, except for the declarations, the same prayers are sought in both applications.
[5] At the beginning of the hearing, counsel for AHPETC, Mr Peter Low (“Mr Low”) applied for leave to file a supplementary affidavit by Ms Sylvia Lim (“Ms Lim”), the Chairman of AHPETC. Counsel for the MND, Ms Aurill Kam (“Ms Kam”) had no objections to the application, but sought the right to respond to Ms Lim’s supplementary affidavit. I granted leave to both parties to file their respective affidavits.
[6] Further, Ms Kam sought leave towards the end of the first day of the hearing to amend OS 250 to include prayer 2A. Prayer 2A reads as follows:
Mr Low had no objections to the application and I allowed the amendment accordingly.
The Facts
[7] The relevant facts underlying this application are largely not in dispute. Following Singapore’s General Elections on 7 May 2011, the Hougang Town Council and Aljunied Town Council merged to form the Aljunied-Hougang Town Council (“AHTC”) on 27 May 2011. After the by-election for Punggol East Single Member Constituency, AHTC was reconstituted as AHPETC with effect from 22 February 2013.
[8] Under the TCA, the financial year (“FY”) runs from 1 April to 31 March and Town Councils are required to submit audited financial statements and auditor’s observations report (“Audited Financial Statements and Reports”) (if any) for each FY to the Minister for National Development (“the Minister”) by 31 August and for the Minister to present the same to Parliament.
[9] AHPETC (initially as AHTC) submitted its first Audited Financial Statements and Reports for FY 2011/2012 (“FY 11/12”) to the Minister on 11 January 2013. They were late by four months and 11 days. More importantly, the FY 11/12 financial statements were disclaimed by their then auditors, M/s Foo Kon Tan Grant Thornton LLP (“FKT”). FKT issued a Disclaimer of Opinion in respect of AHPETC’s (then AHTC) financial statements for FY 11/12, listing four areas as the bases for their disclaimers. These bases included the fact that $32,079,316 of AHPETC’s (then AHTC) operating expenditure had been allocated between residential property, commercial property and car park without first identifying the expenditure relating to the rightful property type and the fact that FKT was unable to ascertain the accuracy of the cash and bank balances of AHPETC’s (then AHTC) bank accounts as a sum of $67,589 remained irreconcilable.
[10] AHPETC’s Audited Financial Statements and Reports for its FY 2012/2013 (“FY 12/13”), which should have been submitted by 31 August 2013 to the Minister, were again late. This time it was submitted on 10 February 2014, five months ten days late. Rather alarmingly, FKT not only issued a Disclaimer of Opinion on AHPETC’s financial statements for FY 12/13, but this time it did so on 13 grounds.
[11] Three of these grounds were the same as those issued for the FY 11/12 financial statements. The remaining ten grounds included:
(a) FKT’s inability to obtain necessary documents to ascertain the collectability of the service and conservancy receivables;
(b) FKT’s inability to determine the accuracy of the lift upgrading expenses of $18,162,857;
(c) FKT’s inability to determine the validity and accuracy of advance receipt from residents in respect of service and conservancy charges (“S&CC”) amounting to $507,809;
(d) AHPETC’s failure to comply with r 4(2B)(a) of the Town Council Financial Rules (Cap 329A, R 1, 1998 Rev Ed) (“TCFR”) which was in relation to the transfer of funds into the sinking fund; and
(e) FKT’s inability to obtain details of the project management service fees AHPETC paid to a related party.
FKT eventually concluded that AHPETC “[had] not complied with the provisions of the [TCA] and the [TCFR].”
[12] According to the Minister, the observations in the above two reports by FKT “raised[d] serious questions about the reliability and accuracy of AHPETC’s financial and accounting systems.” Hence, the Auditor-General (“AGO”) was appointed on 19 February 2014 by the Deputy Prime Minister and the Minister for Finance to conduct an audit on AHPETC’s FY 12/13 financial accounts, records and books (“the AGO Audit”).
[13] Pending completion of the AGO Audit, the MND withheld the grants-in-aid to AHPETC for FY 2014/2015 (“FY 14/15”) because of its concerns surrounding the adequacy of AHPETC’s financial and accounting systems and as to whether moneys held by AHPETC (“Town Council Moneys”) were properly applied.
[14] In response, AHPETC wrote to the MND on 16 June 2014 stating that the withholding of the grants-in-aid to AHPETC is “likely to critically and adversely affect the [Town Council’s] cash flow position, resulting in a disruption of essential services to the town because the [Town Council] would not be able to pay its contractors”. AHPETC also informed the MND in a another letter dated 30 July 2015 that it would not be able to make its first quarter sinking fund transfer due to the grants-in-aid being withheld and as it needed to pay for essential services for the town.
[15] After further exchange of correspondence and receiving certain information from AHPETC, the MND offered in a letter dated 7 October 2014 to disburse half of the grants-in-aid to AHPETC, subject to the following conditions:
(a) That AHPETC explains the decrease in its cash and cash equivalent over a period of 16 months;
(b) That AHPETC’s Chairman confirms and declares that the statements on AHPETC’s financial accounts which were provided earlier were true;
(c) That AHPETC’s Chairman gives an assurance of measures in place to account explicitly for the use of the FY 14/15 S&CC Grant if disbursed; and
(d) That AHPETC’s Chairman ensures that AHPETC would make all necessary transfers to its sinking fund bank accounts for the entire FY.
[16] However, AHPETC did not accept the MND’s offer for half the grants-in-aid. It stated in an email dated 12 November 2014 that it would reply substantively “should [it] wish to take the option of the half-grant while awaiting the conclusion of the [AGO Audit]”. AHPETC never took the MND up on its offer. At present, the grants-in-aid for FY 14/15 have not been disbursed, but it should be noted that the grants-in-aid for FY 2013/2014 (“FY 13/14”) amounting to $6,021,285.05 were paid on or around 14 May 2013.
[17] On 9 February 2015, the AGO released its report on the AGO Audit (“the AGO Report”). In the overview of the AGO’s Observations, the AGO stated that it had found several lapses in governance and compliance with the TCA and the TCFR. The major lapses include the following:
(a) Failure to transfer monies into the sinking fund bank accounts as required by the TCFR;
(b) Inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments;
(c) Not having a system to monitor arrears of S&CC accurately and hence there is no assurance that arrears are properly managed;
(d) Poor internal controls, hence risking the loss of valuables, unnecessary expenditure and wrong payments for goods and services; and
(e) Not having a proper system to safeguard documents and keep proper accounts and records as required by the TCA.
It is important to note the key conclusion and view of the AGO:
[18] The serious lapses identified by the AGO merit setting out in some detail. If similar lapses occurred in the context of a public limited company or a Management Corporation Strata Title Committee (“MCST Committee”), there would have been severe consequences to the office holders. In relation to the lapses in the management of the sinking funds, r 4(2B)(a) of the TCFR mandated AHPETC to make the requisite payments into the sinking fund within one month from the end of each quarter of the financial year. AHPETC had failed to make the requisite transfers to sinking fund bank accounts for the last three quarters of FY 11/12 as required by r 4(2B)(a) of the TCFR. AHPETC did make some transfers for FY 12/13 but these were late and short of the required amounts. Most of the transfers were made only after the auditor’s queried AHPETC on it. Additionally, there were other instances of non-compliance with the TCA involving the wrong use of monies in sinking fund bank accounts.
[19] The setting aside of sinking funds of Town Councils, or MCST Committees for that matter, is a well-recognised, mandatory and prudent measure that must be complied with. Sinking funds represent sums in the nature of savings, set aside periodically to cater for major cyclical expenses of a long-term nature and which usually involves relatively large sums of money. Thus, blocks of flats have to be painted every five years or so; roofing systems, water tanks, pumps and water supply systems, electrical supply systems, lightning protection and lifts require periodic renewal or replacement. If money is not set aside regularly each FY, when the time comes to, eg, replace lifts, the funds collected during that financial year will be insufficient to pay for the same. The setting aside of funds for such periodic medium- to longer-term expenditure are covered under s 33(6) of the TCA. In addition, s 33(6) also caters for payments from the sinking fund for expenditure incurred in lift upgrading works, major repairs and maintenance of the common property, boundary walls of the Housing and Development Board (“HDB”) and upgrading works. It is, amongst other things, the height of financial irresponsibility to ignore such obligations. They are not mere technicalities.
[20] In relation to receivables from various stakeholders such as Sundry Debtors, the AGO found that there was poor monitoring and lack of due diligence by AHPETC in following up on amounts due (ie, receivables) and monies received (ie, receipts) from external parties, to ensure that payments due were collected on a timely basis and that receipts were accurately captured in the accounting records. For example, the AGO found that as at 1 July 2014, $376,316 owed by various Sundry Debtors remained outstanding, and have been outstanding for 17.5 to 37.6 months. If these sundry debtors included owners of flats within AHPETC, then monies that are collected from those flat owners who dutifully pay their dues are used to fund those defaulting flat owners who have not paid their S&CC contributions.
[21] More severely, AHPETC did not fully disclose its related party transactions in its financial statements. PricewaterhouseCoopers Consulting Pte Ltd (“PwC”) (who was appointed by the AGO to carry out a review of selected areas of AHPETC’s accounts) found that there was inadequate management of the conflicts of interests of related parties arising from ownership interests of its key officers. For example, FM Solutions and Integrated Services (“FMSI”) and FM Solutions and Services Pte Ltd (“FMSS”) were engaged by AHPETC to carry out managing agent services and essential maintenance and lift rescue services. The Secretary of AHPETC was the owner of FMSI, a sole proprietorship. The Secretary, General Manager and both Deputy General Managers of AHPETC were directors and shareholders of FMSS. AHPETC’s General Manager and Secretary are spouses. To compound matters, some invoices issued by FMSS and FMSI were verified by AHPETC’s General Manager and Deputy General Manager (both of whom are shareholder-directors of FMSS). The General Manager also approved the payment vouchers and/or cheques before they were handed over to the payment signatories for signing, one of whom is the Secretary of AHPETC (who is the owner of FMSI). According to the AGO Report, the total value of the related party transactions entered into between AHPETC and FMSS and FMSI is in excess of $25.9 million. There were also control gaps in processing 84 related-party transactions amounting to some $6.61 million. After the release of the AGO Report, AHPETC conducted a check on the amounts actually billed by FMSS for essential maintenance and lift rescue services for the period between October 2011 to June 2012 and discovered that it had computed the rates for FMSS’s services incorrectly, thereby leading to AHPETC overpaying FMSS $122,411.98. This amount has since been credited back to AHPETC. This overpayment might have gone unnoticed if not for the AGO Report.
[22] On 12 February 2015, Parliament convened to debate on the AGO Report and its findings. After two days of debate, AHPETC Members of Parliament unanimously supported the motion in Parliament that noted with concern, inter alia, the various deficiencies in AHPETC’s financial and accounting systems, record-keeping and safeguards, the uncertain accuracy and reliability of AHPETC’s accounts and the risk that AHPETC has not properly managed and spent public funds. During the Parliamentary Debate, there were also calls by various members of the House for AHPETC to be transparent about its affairs.
[23] On 20 March 2015, the MND filed OS 250 and SUM 1299.
[24] In addition to the above background, the parties also agree on the following facts and positions:
(a) AHPETC has been submitting disclaimed Audited Financial Statements and Reports since inception;
(b) There have been breaches by AHPETC of the TCA and the TCFR insofar as they are stated in the AGO Report;
(c) The accountants appointed by AHPETC to address the weaknesses identified in the AGO Report, Business Assurance LLP, have yet to give any advice on how to improve the processes of AHPETC. AHPETC has simply stated it is still a “work in progress”;
(d) AHPETC has a duty to make sure that its payments are properly made and duly authorised. If a payment is not properly made or duly authorised (eg, there was overpayment for works), AHPETC has a duty to recover those sums; and
(e) The sinking fund transfers for the third and fourth quarter of FY 14/15 have not been made.
My Decision
[25] The facts set out above are not really in contention. The related documents, like the AGO report and the Disclaimed Accounts by FKT, are also a matter of public record having been placed before and debated in Parliament over two days on 12 and 13 February 2015. Insofar as they are not agreed, the foregoing forms my findings of fact on the evidence before me as are the further facts that I refer to hereafter. There can be little doubt that AHPETC has breached several of its duties under the TCA and the TCFR, and continue to be in breach of some of them. I asked Mr Low over two days of oral submissions how far along the road AHPETC is to resolving the qualifications made by FKT and the only answer AHPETC could give was that “it’s work in progress.” Mr Low did, however, assure me that the 30 June 2015 deadline would be kept. I also asked whether AHPETC’s consultant has advised them over their processes, as this was one of the major weaknesses pointed out by the AGO. Mr Terence Tan, second counsel for AHPETC said on the second day of oral submissions, “not as yet”.
[26] Given these facts, I now turn to the orders and declarations sought by the MND against AHPETC.
Prayer 3(a) and the first part of prayer 3(b)
[27] Prayer 3(a) seeks to appoint independent accountants (“IAs”) to co-authorise and co-sign all payments of AHPETC in excess of $20,000 from segregated bank accounts (for sinking funds and operating funds respectively) (“the Special Accounts”) into which the grants-in-aid for FY 14/15 and FY 2015/2016 (“FY 15/16”) will be paid by the MND to AHPETC. Prayer 3(b) can be divided into two parts. The first part relates to the IAs’ power to do all things necessary to ensure proposed payments out of the Special Accounts are correctly made and properly authorized. The second part relates to the IAs’ power to do all things necessary to ensure that adequate control is maintained over Town Council Moneys and the expenditure incurred by AHPETC. It therefore becomes clear that prayer 3(b) refers to two separate categories of AHPETC’s moneys (though there is some degree of overlap). The first is the moneys in the Special Accounts (which comprises the grants-in-aid for FY 14/15 and FY 15/16), and the second is the Town Council Moneys (which comprises all moneys held by AHPETC including but not limited to the grants-in-aid and S&CC). In this portion of my decision, I deal only with prayer 3(a) and the first part of prayer 3(b), as those are the prayers which relate to the grants-in-aid that are to be disbursed by the MND.
[28] Mr Low argues that s 42 of the TCA allows the Minister to impose such conditions as he determines on the grants-in-aid the MND makes to the Town Council. Section 42 of the TCA reads as follows:
[29] Mr Low accepts that the Minister may impose the very orders that are sought in prayer 3(a) as conditions, ie, that the grants-in-aid for FY 14/15 and FY 15/16 are to be paid into the Special Accounts, and payments in excess of $20,000 from the Special Accounts will have to be co-authorised and co-signed by IAs. In fact, Mr Low goes further to argue that the court should not grant prayer 3(a) because the Minister can simply impose the relevant conditions and an application to court for such an order is unnecessary.
[30] I am in agreement with Mr Low that the orders sought in prayer 3(a) and the first part of prayer 3(b) are matters that are left to the Minister under s 42 of the TCA. That provision unambiguously provides the Minister with the power to subject the grants-in-aid to such conditions as he may determine. Should the Minister decide to impose conditions, it then falls on AHPETC to decide whether they would accept the conditions in order to receive the grants-in-aid. If they feel the conditions are unreasonable in the Wednesbury sense, then judicial review proceedings are always an option open to them.
[31] Ms Kam argues that it was necessary to make this application to court because the MND imposed conditions for the release of half of the grants-in-aid in October 2014, but this was not accepted by AHPETC. As noted above at [16], AHPETC stated it would “reply substantively” should it decide to “take the option of the half-grant”. Ms Kam asks the court to issue the order as otherwise it is only a matter of time before this matter came back to the court. There is some truth in this because, on the first day of oral arguments before me, Mr Low, in consultation with his client, indicated that the ceiling of $20,000 was much too low and it should be set at $100,000.
[32] There was also some disagreement over the identity of the IAs and who should select the IAs. These two questions are related. Mr Low alleges that the two IAs proposed by the MND are inappropriate as they are from PwC, and PwC was engaged by the AGO to review selected areas of AHPETC’s accounts during the AGO’s Audit in 2014. He argues that the proposed IAs will come with “preconceived notions” that AHPETC has done wrong, and in any event, will have an appearance of bias. He suggests that the IAs should be appointed by a neutral third party, such as a retired judge or a senior counsel.
[33] I must say that I fail to appreciate Mr Low’s or AHPETC’s objections to the proposed IAs. First, it is not at all clear that the proposed IAs are the very same accountants who had worked on the AGO Report. Secondly, even if they were, the proposed IAs are professionals who were exercising their professional judgment in the discharge of their duties. No allegations have been raised by AHPETC thus far as to the impartiality, expertise, or professionalism of the PwC accountants who worked on matters that were also set out in the AGO’s Report. In fact, AHPETC even fully accepted the AGO’s Report in Parliament, stating that the “AGO’s work is thorough [and] fair”. Since AHPETC accepts the professionalism and integrity of the AGO and its Report, it must accept the PwC Report and the work done by its accountants. At no point did AHPETC draw a distinction in terms of their overall satisfaction with the AGO Report between the portions done by the AGO and the portions done by PwC. It is unfair to the proposed IAs to say that they would come with preconceived notions, and it would be improper to allege that their appointment will lead to an appearance of bias as there is no basis for any such allegation.
[34] In my view, if the Minister determines the identity of the IAs as part of the condition he imposes under s 42 of the TCA and AHPETC has objections to the identity of the IAs, AHPETC can take it up with the Minister. If the Minister stands firm, it remains a condition the Minister has imposed under s 42 of the TCA. If AHPETC is of the view that the Minister is acting ultra vires by selecting the proposed IAs, or that there is otherwise something it wants to challenge, there is nothing preventing AHPETC from coming to court to challenge the Minister’s conditions. Of course, whether they will succeed or not depends on the facts and issues raised in those proceedings.
[35] I have stated my view that whether any and, if so, what conditions are imposed is a matter for the Minister to decide under s 42 of the TCA. That should ordinarily be the end of the matter and the court should not be involved in imposing such conditions. No order is required from the court. A possible challenge by way of judicial review after the conditions are made known is theoretically possible provided there are grounds for doing so.
[36] However, as stated above, I have seen AHPETC’s letter dated 29 April 2015 and Ms Kam has also shown me the MND’s response dated 2 May 2015, (also handed up to me in the course of oral argument). I can see that Ms Kam is probably right in that any conditions imposed by the Minister will be unacceptable to AHPETC and this will result in further court proceedings. The letters referred to, however, show some effort by both parties to compromise. On the second day of oral argument, Mr Low also said his client agreed to the lower $20,000 ceiling as reasonable.
[37] To assist the parties, and I must emphasise it is no more than that, and in an effort to obviate further court proceedings, I will say a few words regarding the conditions as reflected in prayers 3(a) and the first part of prayer 3(b). In my view, the imposition of these conditions are reasonable in the light of the findings of the AGO Report, which was also accepted without reservation by AHPETC. As indicated above, AHPETC’s management of its funds and finances have been far from satisfactory, and the problems continue to remain unrectified. Controls and measures must be put in place to ensure that the grants-in-aid for FY 14/15 and FY 15/16 are adequately managed and payments out of those grants are correctly made and properly authorised in accordance with the law and the TCA. The Government, through the MND, have a responsibility to make payments of public money in accordance with the law and s 42 of the TCA reflects this responsibility.
[38] In their letter of 2 May 2015, the MND has offered to try and reach consensus on these conditions and suggested a consent order be entered accordingly with appropriate amendments to the OS and Summons to reflect the agreement. I can only urge parties to do so as I see the remaining differences as minor and/or technical and can be overcome. A consent order will also assist the parties to lower the likelihood of subsequent disputes. I accordingly make no order on prayers 3(a) and the first part of prayer 3(b). The parties have liberty to apply in the event they have reached an agreement and wish to record a consent order.
The second part of prayer 3(b) and prayers 3(c)–(h)
[39] I now turn to deal with the most heavily contested issue in these proceedings—the appointment of IAs to ensure that adequate control is maintained over Town Council Moneys and to do all things that are necessary to identify whether past payments of AHPETC have been correctly made, properly authorised and lawfully made. The latter includes taking accounts, directing inquiries of payments made to any persons related to AHPETC (or AHTC) and/or whether there has been any breach of duty or unlawful conduct by any person acting for AHPETC (or AHTC) or its agents and, where necessary, recovering such payments incorrectly, improperly or unlawfully paid out and taking appropriate action in respect of breaches of duties or unlawful conduct by persons acting for AHPETC (of AHTC) or its agents. There are also prayers asking that the IAs may disclose to the MND (or such other persons as directed by the court) information obtained by the IAs in the course of their work. There is also a prayer that these IAs may make applications to court from time to time to seek further directions and that they may appoint such other persons as they deem appropriate to assist them in their work. These have been fully set out at [1] above as are the further ancillary prayers in prayer 3.
[40] The legal bases on which the MND relies on to seek those prayers are:
(a) a statutory mandate pursuant to the TCA;
(b) a beneficial interest under a Quistclose trust;
(c) a legal interest pursuant to a contractual mandate; and
(d) alternatively, a statutory right under s 21(2) of the TCA.
[41] I propose to deal with basis (d), followed by bases (a), (b) and (c), before addressing whether it is possible to appoint IAs in the abstract. However, before I proceed to do so, it will be helpful to examine the nature of a Town Council.
The nature of a Town Council
[42] Town Councils were born out of a pilot Town Council project that was first started in Ang Mo Kio New Town some 20 months before the second reading of the Town Councils Bill on 28 June 1988 (Singapore Parliamentary Debates, Official Report (28 June 1988) vol 51 (“Second Reading of the Town Councils Bill”) at cols 373–374 (S Dhanabalan, Minister for National Development)). The Government wanted to see how residents could participate in the management of public housing estates, which was then being carried out by the HDB across Singapore. The HDB was, inter alia, looking after the management and upkeep of public housing estates which housed some 80% of the population of Singapore. The HDB had to provide the same amenities and have the same rules and regulations in all estates. There was no room for variation to suit individual housing estates and neighbourhoods. The idea of a Town Council was to allow residents to have a say and decide for themselves what kind of living environment they wanted and each Town could develop its own distinctive character according to local conditions and the desires of its residents. The pilot project showed that self-management was a workable concept for public housing estates and the residents in the project participated with enthusiasm. The Government accordingly decided to extend the Town Council to all constituencies with HDB estates.
[43] During the Second Reading of the Town Councils Bill, the then Minister for National Development, Mr S Dhanabalan (“Mr Dhanabalan”) briefed Members of Parliament (“MPs”) on the salient features of Town Councils, their constitution, their functions and the financial provisions therefor. I highlight some of the matters mentioned by Mr Dhanabalan:
(a) The Town Councils were to control, manage, maintain and improve the common areas of the residential and commercial property in the housing estates of the HDB within the Town;
(b) The Government may make grants-in-aid to Town Councils;
(c) Town Councils were required to set up and maintain sinking funds to enable the carrying out of cyclical repair works; contributions to the funds must not be lower than the prescribed rates;
(d) For estate management, the Government will provide the Town Councils with the same financing as that provided to the HDB and worked out based on the HDB’s current rate of service and conservancy expenditure; households in the Town Council will be subsidised at levels no less than that of households in estates which come directly under the HDB’s management; the quantum will vary according to flat types and with the age of the flats;
(e) Town Councils will be given certain powers to levy and recover unpaid S&CC;
(f) It was up to the residents of the Town Council to determine for themselves how they wanted to shape the environment of their Town, what kind of additional facilities they wanted to put in and how well they wanted to maintain their surroundings; and
(g) The framework in the Bill incorporates the necessary powers and latitudes for the effective functioning of Town Councils with sufficient built-in safeguards to protect the interest of the residents.
Mr Dhanabalan also stated that there were very important reasons for the setting up of Town Councils. It had to do with Singapore’s survival under the system of representative government and that it was crucial to understand the philosophy and arguments for this approach.
[44] The then First Deputy Prime Minister and Minister for Defence Mr Goh Chok Tong stated that the Town Councils Bill was meant to contribute to the attainment of two philosophical objectives, the first being the increased participation of Singaporeans in building an even better Singapore, and the second being the need to provide stabilisers to our democratic political system (at cols 379–381).
[45] To achieve these twin objectives, the Bill sought, first, to transfer some power from the HDB to the MPs and grassroots leaders by giving the latter, and the residents, greater power and responsibility to manage their own affairs and to participate in their estate’s development. Hence, the Town Councils Bill intended for Town Councils and their MPs to take over certain powers, duties and responsibilities in relation to the public housing estates within the Town from the HDB. As Mr Goh Chok Tong pointed out, all public housing estates at that time were centrally managed by the HDB and this was viewed as undesirable. The Town Council scheme was created in order to achieve greater flexibility and efficiency in decision-making, and to confer upon the residents a sense of ownership and the right to make choices.
[46] Secondly, it was perceived at that time that MPs had no direct responsibility for and accountability to their constituencies. The Bill sought to increase the authority and responsibility of MPs, thereby encouraging voters to vote more carefully and sincerely to choose honest and effective MPs. Town Councils were thus to be allowed to run with a much lesser degree of supervisory control from the Government. Mr Dhanabalan stated:
[47] With the passing of the TCA, Town Councils came into being. They were, by statute, bodies corporate with perpetual succession and may sue or be sued in the corporate name of that Town Council. The relevant MP or MPs for that constituency or constituencies would head the Town Councils and they could appoint members to that Town Council. Under s 18 of the TCA, the function of Town Councils are to control, manage, maintain and improve the common property of the residential and commercial property in the housing estates of the HDB within the Town and to keep them in a state of good and serviceable repair and in a proper and clean condition. They were to exercise such powers and perform such duties as may from time to time be conferred on a Town Council by or under written law. Their functions include the conservancy and landscaping of the common property of the residential and commercial property in the housing estates of the HDB within the Town. They are also subject to the TCFR, which was made pursuant to s 57 of the TCA.
The various legal bases argued
[48] I will now turn to the legal bases that the MND relied on.
Basis (d): Statutory right under s 21(2) of the Act
[49] Having dealt with the rationale and purpose behind Town Councils, and having referred to some of the provisions of the TCA, I now turn to deal with the MND’s claim to a right to seek the orders and declarations prayed for under s 21(2) of the TCA.
[50] Ms Kam argues that the MND has a statutory right under s 21(2) read with s 21(1)(f) of the TCA to seek an appropriate order from the High Court to compel AHPETC to comply with s 35(c) of the TCA. Section 21(1)(f) imposes a duty on AHPETC to “comply with the provisions of [the TCA] and the rules made thereunder”, and this includes s 35(c), which requires AHPETC to “do all things necessary to ensure that all payments out of its moneys are correctly made and properly authorised” and “adequate control is maintained over” its “assets” and “expenditure incurred”. Ms Kam argues that the MND is a “person for whose benefit” AHPETC’s duty to comply with, inter alia, s 35(c), is imposed.
[51] It would be apposite to set out ss 21 and 35(c) of the TCA:
[52] Mr Low on the other hand contends that only the HDB or a resident voter may take advantage of s 21(2) of the TCA, and that the phrase “any person for whose benefit” does not include the MND. He relies on two authorities to support his contention.
[53] The first is that under s 2(1) of the Interpretation Act (Cap 1, 2002 Rev Ed), both “person” and “government” have been defined separately, and by virtue of the legal maxim expressio unius est exclusio alterius (the expression of one thing is the exclusion of the other), the express definition of “government” excludes it from the definition of “person”. I have little hesitation in dismissing this argument as misconceived. If Mr Low is correct, then a “police officer” which is also separately defined under s 2(1) of the Interpretation Act cannot be a “person”. In any event, s 2 of the Interpretation Act provides that the words stated therein are to have the meanings respectively assigned to them unless there is something in the subject or context inconsistent with such construction. Notwithstanding s 2 of the Interpretation Act, the word “person” in s 21(2) of the TCA must still be construed in its context.
[54] The second authority Mr Low relies on is the decision of the High Court in Chee Soon Juan and others v Public Prosecutor [2011] 3 SLR 50 (“Chee Soon Juan”). With respect, this authority does not take Mr Low very far. In Chee Soon Juan, the appellants were charged under r 5 of the Miscellaneous Offences (Public Order and Nuisance) (Assemblies and Processions) Rules (Cap 184, R 1, 2000 Rev Ed) (“MOR”) for participating in an assembly intended to demonstrate opposition to the actions of the Government where they ought reasonably to have known that the assembly was held without a permit. One of the issues was whether the Government was a “person” within the meaning of r 2(1)(a) of the MOR, which required, inter alia, that the assembly was intended “to demonstrate support for or opposition to the views or actions of any person” [emphasis added]. In making certain observations about how the judge below dealt with this issue, Woo Bih Li J held that he would prefer to define “person” in r 2(1)(a) with “specific regard to its evidently broad scope” and came to the conclusion that “person” amounted to “any identifiable entity, whether or not a legal person stricto sensu”, and this included the Government (at [13] and [20]). Chee Soon Juan stands for the principle that when defining the word “person” in a particular provision, regard must be given to the purpose and scope of that provision. This principle is axiomatic.
[55] During oral argument, Ms Kam made an additional argument relying on ss 3 and 36 of the Government Proceedings Act (Cap 121, 1985 Rev Ed) (“GPA”). Mr Low responded with an “Aide Memiore 1”. Section 3 of the GPA provides that the Government may make a claim against any person if such a claim would have afforded grounds for civil proceedings between private persons. Section 36 of the GPA provides that the Government’s right to take advantage of the provisions of any written law, although not named therein, is not prejudiced. Section 3 of the GPA essentially sets out the right of the Government to sue as if it were a private person; eg, where the driver of a vehicle negligently collides into a military vehicle and s 36 makes it clear that the Government is entitled to take advantage of legislation which does not specifically name the Government. However, the onus is still on the Government to show that the legislation in question was intended to extend to it. Therefore, despite ss 3 and 36 of the GPA, the MND must still show that Parliament had intended for it to be able to take advantage of that provision, in this case, s 21(2) of the TCA.
[56] Section 21(2) is preceded by s 21(1)(a) to (g) which lays down certain requirements and duties upon a Town Council. I agree with Ms Kam that under s 21(1)(f) the Town Council is duty bound to comply with the provisions of the TCA. These provisions include s 35(c), which requires AHPETC to “do all things necessary to ensure that all payments out of its moneys are correctly made and properly authorised” and “adequate control is maintained” over its assets and expenditure incurred. It is also indisputable that AHPETC must make quarterly payments into a sinking fund no later than one month after the end of each quarter under the TCFR.
[57] But if there is a breach of or non-compliance with these duties and requirements, who can complain? The TCA is not silent. Section 21(2) provides that where a requirement or duty is imposed on a Town Council “by this section”, certain parties or persons may apply to court for an order compelling the Town Council to carry out the requirement or perform the duty as the case may be. The last mentioned words point to mandatory orders being made by the court.
[59] However it is important to emphasise, as I have said above, that the HDB remains the lessor. Moneys that would have been given to the HDB to maintain and upkeep these estates and buildings within the Town Council are now given to the Town Council to do so. The HDB’s interests are directly affected if a Town Council does not make payments into a sinking fund resulting in a lack for funds for cyclical maintenance and upgrading works. If Town Councils do not properly upkeep the estates and buildings and allow decay and deterioration, it directly affects the lessor’s property in the medium and longer term. It is therefore not surprising that s 21(2) names the HDB as an entity that is entitled to take action if a Town Council does not comply with its duties and obligations under s 21(1).
[60] The second group specifically named in s 21(2) is “any person for whose benefit, or for the benefit of whose flat that requirement or duty is imposed on the Town Council”. On a plain reading, bearing in mind the requirements and duties imposed on a Town Council under s 21(1), (which includes compliance with s 35(c) and the TCFR), the persons for whose benefit such requirements and duties are imposed on a Town Council are clearly the residents of those towns, whether they own a flat (which is defined to include units for the purpose of business) or not, and those persons who own a flat within the town but might live elsewhere. The inclusion of the latter group is based on the fact that these persons are liable to pay the S&CC levied on the flat within the Town Council and are correspondingly entitled to the benefits of that town under the TCA. It is thus made clear that persons who are interested only as flat owners are also entitled to avail themselves of s 21(2).
[61] However, to avail themselves of a right under s 21(2) to bring an action against the Town Council, this person or group of persons must be able to show that the breach they complain of was a duty or requirement that was imposed on the Town Council for his or their benefit.
[62] Ms Kam however, contends that “any person for whose benefit … that requirement or duty is imposed” is wide enough to include the MND. Ms Kam submits that under s 21(1)(f), the Town Council has to comply with the provisions of the TCA and the TCFR. Town Council moneys, which include the grants-in-aid and S&CC, are held by Town Councils for the purposes of the TCA and for the benefit of residents in the town under the Town Council’s purview and subject to the MND’s regulatory oversight. She argues that Town Councils are therefore subject to a stringent statutory regime of accountability to the MND and residents and the MND has a duty to ensure that public funds are safeguarded at all times and that residents’ interests are not compromised. The MND is thus a “person” for whose benefit the requirements of s 35(c) of the TCA are imposed on AHPETC so as to protect Town Council moneys in the interests of residents and the MND.
[63] With respect, I cannot agree. Section 21(2) clearly names one entity, the HDB, and a group, viz, any person for whose benefit, or for the benefit of whose flat that requirement or duty is imposed on the Town Council. On a true construction, the latter is read as one and not two independent groups. They can, in one sense, refer to two groups of persons, but what they have in common is the determining factor of staying within the town, whether they own a flat or not, or owning a flat (which as noted earlier is defined to include a strata unit for business) within the town but who may stay outside the town. If the Minister or the MND was meant to be within s 21(2), nothing would have been easier than to draft it so and to expressly include the Minister within s 21(2). In contrast, the word “Minister” is used liberally within other provisions of the TCA (see, eg, ss 9, 24I, 38, 42 and 43 of the TCA).
[64] If we go back to the intention of Parliament when the Town Council Bill was proposed, it is clear that the responsibility of running the Town Councils was laid squarely on the shoulders of the MPs of those constituencies and their chosen Town Councillors. Self-management, de-centralising local decision-making in respect of the HDB housing estates within a town to Town Councils, the right to choose how they want to shape their environment, what kind of additional facilities they want to put in and how well they want to maintain their surroundings, were all matters in which they were given the freedom to choose and with it came the responsibility therefor. Mr Dhanabalan said: “The Members of Parliament and their appointed councillors will be fully accountable to the residents for their actions and decisions.” Mr Goh Chok Tong said this was because they were responsible for “managing the social and physical environment of their constituencies.” As noted above, one of the key philosophies was that voters had to choose their MPs carefully as they would have to abide by the consequences of their choice. Mr Goh Chok Tong also said: “If they run their Town Councils efficiently, their constituencies will be safe, clean and green. If they do not, they only have themselves to blame.”
[65] This intention and philosophy behind the TCA was further debated on 29 June 1988. The then Member of Parliament for Bo Wen SMC asked what would happen in the event of errant town councillors and managers and whether the HDB would step in to help if there is a need to do so. Mr Dhanabalan’s reply was as follows:
[66] It is fairly clear from these speeches that the intent of the TCA was to allow Town Councils latitude to operate and manage their funds, operate with the necessary powers, impose the necessary duties, obligations and requirements and to put in sufficient safeguards.
[67] The framing of the question by the then Member of Parliament for Bo Wen SMC and the answer quoted above is telling. To the question “Who will monitor the Town Councils and whether, in the course of monitoring, the Town Councils will be closely controlled by the Government?”, the Minister said: “That is not the intention.” Hence, two other principles emerge. First, there is the safeguard of the HDB moving in if it has to in the event of mismanagement. In that event, the HDB will start to collect monies to manage and provide the services in the constituency; what has been misspent in the past remains a loss, ie, the HDB in stepping in is not going to make good any losses suffered before it moved in. Hence if the S&CC have to be increased to make up for the loss, then the constituents have to bear that increase. Secondly, if the funds are misspent, or mismanaged or the Town Councillors turn rogue and run off with funds, there will be no bail-out by the Government. The Government will not come in and make good the losses.
[68] Given these principles of granting latitude to Town Councils to run their towns with freedom subject to the requirements, obligations and duties set out in the TCA, not closely controlling them and not coming in to bail the constituents out in the event there is mismanagement or defalcation, it is unlikely that Parliament had intended for the Government or the MND to be able to take advantage of the remedy in s 21(2) of the TCA.
[69] There are other safeguards within the TCA. As noted above, based on the Town Council’s accountability to its constituents, s 21(2) of the TCA provides those with a direct interest the right to come to court. Where there are breaches of a by-law, the owner or tenant of a flat could apply to court for an order to enforce the performance of or restrain the breach of any by-law or recover damages for loss or injury arising out of the breach (see s 24(3) of the TCA). Where the Town Council breaches ss 33(6)(a) or (b), then ss 33(6A) and (6B), which were introduced in August 2008, provides for penal sanctions.
[70] Another safeguard is found in s 50 of the TCA which specifies two instances where the Minister is expressly empowered to intervene. The first is where the Minister is satisfied that a Town Council has failed to keep or maintain any part of the common property of any residential or commercial property in the housing estates of the HDB within the town in a state of good and serviceable repair or in a proper and clean condition. The second is where any duty of a Town Council must be carried out urgently in order to remove any imminent danger to the health or safety of residents of the housing estates of the HDB within the town.
[71] Given this background and the statutory scheme in the TCA and the TCFR, I find that the omission of the Minister in s 21(2) of the TCA is intentional. The words “any person for whose benefit … that requirement or duty is imposed on the Town Council” does not and cannot include the Minister or the Government. The extent of the MND’s intervention in the affairs of a Town Council under the TCA are clearly delineated.
[72] Ms Kam forcefully argues that reading the MND out of “any person” under s 21(2) would lead to an “absurd outcome”. She paints the following hypothetical to illustrate her argument. Suppose an errant Town Council fails to make its sinking fund transfers as required under r 4(2B) of the TCFR. A disgruntled resident may then apply to the High Court under s 21(2) to compel the Town Council to comply with its duty under r 4(2B). The court can, and will, make an order compelling the Town Council to make the necessary transfers. However, the Town Council will say it is unable to comply with the order because the MND will not give them the grants-in-aid for the financial year. The MND will in turn reply that it is more than willing to give the grants-in-aid, but subject to such conditions (as permitted under s 42 of the TCA). The Town Council may find these conditions unreasonable and refuse to accept them, thus leaving us right where we began, ie, the necessary sinking fund transfers are still not made. Ms Kam argues that this “paper order” given by the court to the residents will not “help the situation”. At the very worst, it is only the Town Council’s officers that may be held in contempt. She submits that this is what will occur should “person” under s 21(2) be “read to exclude someone like the government in this case” and this is an “absurd outcome”.
[73] With respect, I do not see how excluding the MND from taking advantage of s 21(2) will necessarily lead to an “absurd outcome”. First, even if the MND was to come within “any person” under s 21(2), there is no order or remedy that the MND can seek that the HDB or a resident cannot already seek. For example, a resident can equally seek the orders which the MND are currently seeking in this OS (the appropriateness of such orders is discussed below at [145]–[152]). In my view, reading “any person” to include the MND will not “help the situation” either.
[74] Secondly, the outcome predicted by Ms Kam may not be as “absurd” as she puts it. The Minister is entitled under s 42 of the TCA to impose conditions on the grants-in-aid. If the Town Council decides not to accept the conditions and the grants-in-aid are not disbursed as a result, this is a decision of the Town Council that the constituents of the Town will have to live with. This is consistent with what was said by Mr Dhanabalan during the Second Reading of the Town Councils Bill (at col 443), which I have quoted above and I set out again for convenience:
[75] While Mr Dhanabalan was speaking in relation to a different situation where the Town Council’s officers have gone rogue, the principle of his message is that residents must live with the choices made by their Town Councils. Of course, if the Town Council is of the view that the Minister is acting outside his powers or jurisdiction by imposing such conditions, the Town Council is entitled to come before the courts to challenge the conditions imposed by the Minister. But as noted above, whether they will succeed or not will depend on the conditions imposed, the merits of their case and the applicable principles of law. Short of that, the Town Council will then have to find some other means of raising the funds to make the necessary sinking fund transfers, or risk being held in contempt for non-compliance of the court’s order. There is nothing absurd about such an outcome. In the event that the sinking fund transfers remain unfulfilled, the resident may then come to court to seek an alternative remedy, if any. It must be remembered that under s 21(3) of the TCA, the court has the wide power to make “such order as it thinks proper”. Depending on the circumstances of the case, the court can tailor its order to achieve the most appropriate and just outcome.
[76] I emphasise, however, that Mr Dhanabalan’s statement above at [74] cannot, and must not, be construed as indicating that a Town Council can breach the duties imposed on it by the TCA with impunity, and remain only answerable to the electorate at the next general elections, an outcome Mr Low submitted was inevitable in law. While a constituent must live with the consequences of the choice he or she made, it does not mean that a Town Council cannot be compelled by the court to comply with its duties, and if it fails to do so, to be punished in accordance with the law. Indeed, that is the whole point of provisions like ss 21(2), 33(6A) and 33(6B) of the TCA.
[77] In any event, if a resident does not come forward to bring an application under s 21(2) of the TCA or is unable to show that the duty imposed on the Town Council was for his benefit or for the benefit of his flat, the HDB can always do so. As mentioned above at [58]–[59], s 21(2) provides that the HDB may apply to the High Court to compel a Town Council to comply with any of its duties under the TCA.
[78] For completeness, I note that there are two other statutes that contain similar provisions to ss 21(2) and (3) of the TCA. The first is the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) (“BMSMA”). Section 88(3) provides that:
[79] The “Part” referred to in s 88(3) refers to Part V of the BMSMA, which sets out the duties owed by a management corporation, ranging from financial duties (such as mandatory sinking fund transfers) to duties to maintain the common property. “Any person” under s 88(3) of the BMSMA has been interpreted to include a subsidiary proprietor (see Management Corporation Strata Title Plan No 1272 v Ocean Front Pte Ltd (Ssangyong Engineering and Construction Co Ltd and others, third parties) [1994] 3 SLR(R) 787 at [17], interpreting s 120 of the Land Titles (Strata) Act (Cap 158, 1988 Rev Ed), the predecessor of s 88 of the BMSMA). In Teo Keang Sood, Strata Title in Singapore and Malaysia (LexisNexis, 4th Ed, 2012), the author opined that “any person” under s 88(3) of the BMSMA would include “a tenant, resident or occupier” (at p 274).
[80] The other statute is the HUDC Housing Estates Act (Cap 131, 1985 Rev Ed) (“HUDCA”). Section 38(2) provides that:
Section 38(2), however, has not been the subject of a dispute before the court.
[81] The commonality that runs through the TCA, BMSMA and HUDCA is that they all deal with an entity that is independent of the Government, and has been provided with certain powers, functions, duties and responsibilities in relation to the common property of a particular estate (see s 19 of the TCA, s 29 of the BMSMA and s 4 of the HUDCA). Provisions such as s 21(2) of the TCA, s 88(3) of the BMSMA and s 38(2) of the HUDCA are thus necessary in order to allow the constituents of the estate to protect their interests. However, each statute must ultimately be interpreted in accordance with its own purpose, structure and scheme. The BMSMA and HUDCA thus provide little assistance in determining whether the MND has the right to apply under s 21(2) of the TCA.
[82] It remains for me to deal with the case of Attorney-General v Lee Kwai Hou Howard [2015] SGDC 114 (“Lee Kwai Hou”), which Ms Kam tendered to the court via fax after the hearing for OS 250 and SUM 1299 ended. The interpretation of “person” under s 21(2) of the TCA is to be distinguished from the interpretation adopted in Lee Kwai Hou. In Lee Kwai Hou, the learned district judge had to consider the issue of whether the word “person” under s 15(1) of the Protection from Harassment Act 2014 (Act 17 of 2014) (“PHA”) included the Ministry of Defence. Section 15(1) of the PHA provides:
[83] The district judge found that the Government is not precluded from taking out an application under s 15 of the PHA because ss 3 and 36 of the GPA allows the Government to take advantage of s 15(1) of the PHA, though not expressly named therein (at [32]–[39]). More importantly, the district judge found that Parliament had not intended for s 15(1) to apply to “natural persons” only because “it would lead to a situation where companies and other non-natural persons will be deprived of this remedy under section 15 of [the PHA] to correct falsehoods about themselves” (at [40]). This position was also confirmed by the Parliamentary Debates and there was no contrary intention indicated in the PHA (at [41]–[43]). It is clear from the district judge’s decision, and as I have alluded to above at [52]–[53], that, in the final analysis, each statute must be interpreted in its own context and according to what Parliament had intended. In contrast to Lee Kwai Hou, for all the reasons I have indicated above at [56]–[77], I find that Parliament had not intended for “any person” under s 21(2) of the TCA to include the Government. The TCA and the PHA have vastly different purposes—the former is a statute which governs the relationship between the Government, the HDB, the Town Councils and the residents, while the latter aims at protecting persons that have been the subject of falsehoods and harassment. It is pursuant to this latter purpose that s 15 of the PHA may be broad enough for the Government to take advantage of (I use the word “may” because I stress that I am not making any decision or finding as to the interpretation of s 15 of the PHA). The same, however, cannot be said of s 21(2) of the TCA, which carefully delineates which parties may take advantage of the remedy provided therein.
[84] Nonetheless, for all the reasons set out above, I am of the view that the MND does not have a right to make an application under s 21(2) of the TCA for a court order compelling AHPETC to comply with its duty under s 35(c) read with s 21(1)(f) of the TCA.
Applicability of the common law
[85] Before going into the other legal bases the MND relies on, I address the issue of whether Parliament, through specifically providing for certain limited remedies for breaches of the provisions of the Act, intended to exclude the application of general common law or equitable remedies for the same. This point was taken quite strongly by Mr Low and Ms Kam also addressed it extensively.
[86] Mr Low’s argument, as I understand it, is that the TCA clearly spells out the duties and responsibilities of a Town Council, and specifically provides for what may be done and who may do it should the Town Council breach its duties and responsibilities under the TCA. I have already referred to some of the remedies encompassed within the TCA. If there is a breach in any of the duties of the Town Council under s 21(1) of the TCA, and this includes complying with the provisions of the TCA and the rules made thereunder pursuant to s 21(1)(f), there is the relief provided under s 21(2). If there are circumstances that require the MND to intervene, such as the health or safety of the residents being endangered or the common property of the Town is not kept in a state of good and serviceable repair or in a proper and clean condition, the Minister has powers under s 50 of the TCA to rectify the situation. Finally, if a Town Council has contravened its duty not to disburse any moneys from the sinking fund and the Town Council Fund other than for the purposes stipulated under s 33(6) of the TCA, ss 33(6A) and (6B) provide for penal sanctions against that Town Council and its officers. Mr Low argues that these statutory provisions, when viewed in the light of the statements made by Mr Dhanabalan during the Second Reading of the Town Councils Bill to the effect that the Government will not bail a Town Council out in the event of mismanagement and that residents must live with the consequences of their choices, mean that there is therefore an exclusion of the application of general common law remedies.
[87] In response, Ms Kam relies on the case of Goldring Timothy Nicholas and others v Public Prosecutor [2013] 3 SLR 487 (“Goldring”). In Goldring, the Commercial Affairs Department had seized certain documents from a company pursuant to an order under s 58 of the Criminal Procedure Code (Cap 68, 1985 Rev Ed). The officers of the company (“the applicants”) were subsequently charged for abetment by conspiracy to cheat. Prior to the trial, the applicants applied for an order for production of some of these documents on the basis that, inter alia, there is a common law right of access to documents seized by law enforcement authorities that an accused person had ownership or legal custody or a legal right to control immediately before the lawful seizure. The Prosecution argued that the criminal disclosure framework found in Part IX of the Criminal Procedure Code 2010 (Act 15 of 2010) (“CPC 2010”) had curtailed the applicants’ common law right of access to the documents prior to the applicants serving their Case for the Defence. In rejecting the Prosecution’s argument, V K Rajah JA held that it is a fundamental presumption of statutory interpretation that Parliament would not have removed rights pre-existing in common law if there was no express provision or clearly evinced intention to that effect. The learned judge found that the Prosecution had not rebutted this presumption because, first, there was no mention in the legislative debates of the common law right of access in relation to the relevant documents, let alone how it was intended to be affected by the CPC 2010; secondly, there was no provision in the CPC 2010 which were expressly inconsistent with the common law right of access to the documents; and thirdly, there was in fact positive signposts indicating why Parliament could not have intended for the CPC 2010 to exclude or restrict an individual’s common law right of access to the relevant documents (at [50]–[55]).
[88] I entirely agree with the presumption of statutory interpretation articulated by the learned judge in Goldring. Like the facts in Goldring, there was no reference made to the TCA being a self-contained statute or to common law rights and remedies during the Second Reading of the Town Councils Bill. There are only the statements made by Mr Dhanabalan referred to at [65] above. These statements are equivocal and do not clearly evince that Parliament had intended for the MND’s common law rights and remedies, if any, to be curtailed. Mr Dhanabalan’s statement as to the Government not bailing the Town Council out in the event that funds are misspent or mismanaged could simply be referring to financial bailout, ie, the Government will not be acting as a guarantor for the Town Council. Mr Low also relies heavily on the current Minister for National Development Mr Khaw Boon Wan’s recent statement in Parliament that “the Town Councils Act deliberately takes a light touch approach to regulation and enforcement” (Singapore Parliamentary Debates, Official Report (12 February 2015) vol 93 (Khaw Boon Wan, Minister for National Development and MP for Sembawang GRC)). With respect, the recent comments of the current Minister in Parliament do not go very far in elucidating what Parliament had intended at the time the Town Councils Bill was passed.
[89] Further, there are no provisions in the TCA that are expressly inconsistent with other common law remedies continuing to exist outside of the TCA. Section 21(2) of the TCA, which enables the HDB or a constituent to apply for certain remedies when the duties stipulated in s 21(1) have been breached or not complied with by the Town Council, can operate in conjunction with common law rights and remedies. In Diora-Ace Ltd and others v Management Corporation Strata Title Plan No 3661 and another [2015] SGHC 88, Hoo Sheau Peng JC had to consider the question of whether a subsidiary proprietor could apply for declaratory relief outside s 88 of the BMSMA. Section 88(3) of the BMSMA (set out above at [77]) is similar to s 21(2) of the TCA. Hoo JC held (at [40]):
[90] Similarly, I find that there is nothing within s 21(2) of the TCA which suggests that the court cannot hear disputes about a Town Council’s breaches of the TCA that are brought outside of s 21(2). I am reinforced in my view by s 58(3) of the TCA, a savings provision which provides that “[n]othing in [the TCA] shall affect any rights or remedies that the [HDB] or an owner or tenant of a flat in any residential or commercial property may have in relation to the flat or the common property … apart from [the TCA]”. Although s 58(3) only applies to the HDB or an owner or tenant of a flat, it indicates that Parliament was alive to the issue of common law rights and remedies and had wanted to preserve it. Bearing in mind the statutory presumption in Goldring, if Parliament had wanted to exclude the application of common law rights and remedies, it would have expressly provided so.
[91] The present case is also distinguishable from situations such as those in Tan Ah Tee and another (administrators of the estate of Tan Kiam Poh (alias Tan Gna Chua), deceased) v Lim Soo Foong [2009] 3 SLR(R) 957 (“Tan Ah Tee”). In Tan Ah Tee, one of the issues the court considered was whether the court had the power to declare a marriage void due to lack of consent, which prior to 1981, rendered a purported marriage void. Judith Prakash J held that by introducing s 105 of the Women’s Charter (Cap 353, 1997 Rev Ed), which provided an exhaustive list of grounds on which a marriage may be declared void, the operative words being “shall be void on the following grounds only”, Parliament had intended to classify lack of valid consent as a ground to hold a marriage voidable only. The court is bound by this change in the law and no longer has the power to hold or declare a marriage void on the basis of lack of valid consent (at [38]–[39]). The learned judge further found a second reason for her conclusion – that the Women’s Charter is a complete code on the law of civil marriage in Singapore. Marriages celebrated in Singapore therefore cannot be declared void on any ground that is not reflected in s 105 (at [43]). In contrast, nowhere in the Parliamentary Debates leading up to the passing of the Town Councils Bill has it been mentioned that the TCA was meant to be a “complete code”. Neither does the TCA contain provisions like s 105 of the Women’s Charter.
[92] Lastly, I refer to some examples of statutes (which Ms Kam has helpfully pointed me to) that have expressly abrogated the application of common law rules. For example, s 8 of the Civil Law Act (Cap 43, 1999 Rev Ed) (“CLA”) provides that the “rule of law known as the rule in Bain v Fothergill is abolished in relation to contracts made on or after 1st January 1999”. Another example is s 47(1)(c) of the Land Titles Act (Cap 157, 2004 Rev Ed), which provides that a person dealing with a proprietor shall not be required “to be affected by notice (actual or constructive) of any trust or other unregistered interest, any rule of law or equity to the contrary notwithstanding” [emphasis added]. These are unequivocal expressions that certain rules of the common law or equity are not to apply and such expressions are not to be found in the TCA.
[93] In summary, I am of the view that the TCA does not exclude the application of common law rights and remedies. The more important question, however, is what rights and remedies the MND is entitled to in relation to the present case. I will now deal with the common law grounds which the MND relies on.
Basis (a): Statutory mandate pursuant to the TCA
[94] The MND argues that it has “regulatory oversight” of the TCA and, since AHPETC holds the Town Council Moneys for the purposes of the TCA, the MND has an interest in ensuring that, first, Town Council Moneys are correctly, properly and lawfully applied and, secondly, any Town Council Moneys wrongfully paid out are recovered. The MND then goes on to assert that it must thus have a remedy to require AHPETC to take appropriate steps to safeguard Town Council Moneys and pursue recovery of any Town Council Moneys wrongfully paid out.
[95] With respect, I do not agree. I have already addressed the nature and purpose of Town Councils and I have referred to some of the provisions in the TCA which provide specific remedies to particular entities or persons. The word “oversight” means and connotes supervision or superintendence, having charge or care of, control, management and direction over something or body. That word is inapt to describe the relationship between the Government and a Town Council. This was made very clear by the Parliamentary Debates during the Second Reading of the Town Councils Bill.
[96] While it is true that a Town Council holds its moneys for the purposes of the TCA and that the MND has some interest in a loose sense in ensuring that a Town Council complies with its statutory duties, I am of the view that this does not give rise to a right on the part of the MND to come to court to enforce a Town Council’s duty simpliciter. Once the grants-in-aid by the Government are made, how it is allocated and spent on the various projects or purposes within the TCA is no longer under the control of the Government but the Town Council. If more of the funds are spent on one type of project like landscaping, instead of say sheltered walkways, that is up to the Town Council. If the funds are embezzled or a criminal breach of trust has occurred, then the full weight of the criminal law and its processes can be brought to bear. If moneys are not set aside as prescribed under the Act, then as noted above, the HDB or persons entitled to under s 21(2) can seek redress, including seeking a mandatory order.

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The Attorney-General v The Aljunied-Hougang-Punggol East Town Council

Laws this judgment relies on

Grounds of decision

Introduction

The Facts

FKT eventually concluded that AHPETC “[had] not complied with the provisions of the [TCA] and the [TCFR].”

My Decision

Prayer 3(a) and the first part of prayer 3(b)

The second part of prayer 3(b) and prayers 3(c)–(h)

The nature of a Town Council

The various legal bases argued

Basis (d): Statutory right under s 21(2) of the Act

Applicability of the common law

Basis (a): Statutory mandate pursuant to the TCA