In a significant development, the Workers’ Party town councillors have announced the conclusion of their long-standing legal battles with Aljunied-Hougang Town Council (AHTC) and Sengkang Town Council (SKTC). The parties have reached a settlement following mediation at the Singapore International Mediation Centre.
The disputes revolved around the alleged misuse of S$33.7 million (US$25.3 million) paid to FM Solutions & Services Pte Ltd (FMSS) and FM Solutions & Integrated Services (FMSI).
The lawsuits implicated prominent Workers’ Party figures, including Ms Sylvia Lim, Mr Low Thia Khiang, and Mr Pritam Singh, along with Mr Chua Zhi Hon and Mr Kenneth Foo.
Settlement Reached on a Drop Hands Basis
In a joint statement, the town councillors announced that the parties involved had agreed to settle the lawsuits on a drop hands basis. This means that AHTC and SKTC will drop their claims for damages and costs against the town councillors, who, in turn, will drop their claims for costs against the town councils.
Background of the Lawsuits
The legal saga began with accusations of financial mismanagement and misuse of public funds by the Workers’ Party-run town councils since it took over Aljunied Town Council in 2011 and, subsequently, Punggol-East SMC in 2013.
These suits, initiated by an independent panel in July 2017, targeted eight defendants, including the Workers’ Party leaders and their former managing agent FMSS, along with four other former town councillors or employees — saying they had breached their fiduciary duties.
Despite being held liable for damages in the High Court in 2019, the town councillors largely succeeded in their appeal. The lawsuits led to AHTC and SKTC being ordered to pay approximately S$388,800 (US$292,000) in costs and disbursements for the appeals.
The breakdown of the S$388,800 in costs reveals that AHTC was required to pay S$176,241.11 for two appeals, while SKTC had to pay S$212,543.52 for three appeals.
Court of Appeal’s Rulings
In a comprehensive 38-page judgment issued on 29 November last year, the Court of Appeal elucidated the reasons behind mandating the payment of costs by the two councils.
The court clarified that costs are typically granted to the prevailing party. In this instance, the town councillors and employees achieved substantial success in their appeals, effectively overturning multiple findings by the trial judge.
The five-judge panel, including Chief Justice Sundaresh Menon, Justice Judith Prakash, Justice Tay Yong Kwang, Judge of the Appellate Division Woo Bih Li, and Senior Judge Andrew Phang, noted that SKTC experienced greater success in the appeals compared to AHTC.
The judgment provided vindication for the Workers’ Party and its senior members from the various allegations made against them, including those from the People’s Action Party.
The court ruled that the town councillors and employees did not owe fiduciary duties to AHTC or SKTC and had acted in good faith when awarding the contracts.
The settlement marks the end of a prolonged and high-profile legal battle that has seen significant legal and financial scrutiny of the Workers’ Party and its management of town council funds.
With the conclusion of these lawsuits, the town councillors and the Workers’ Party can now move forward from this chapter, focusing on their duties and responsibilities to their constituencies.