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Workers’ Party leaders and others involved in running the Aljunied-Hougang Town Council (AHTC) acted in good faith when they decided to waive the tender for a managing agent soon after the 2011 General Election, the Court of Appeal said on Wednesday.

However, they were also aware of the potential conflict of interest involved, and failed to address it, even though they were aware of the risk of overpayments or improper payments, the court added.

In a written judgment that allowed part of the appeals brought by the WP leaders, the five-member court led by Chief Justice Sundaresh Menon said it found that while the leaders do not owe fiduciary or equitable duties of skill and care to AHTC, they were still liable to the town council for negligence in certain aspects.

These leaders include former WP chief Low Thia Khiang and party chairman Sylvia Lim, who had been found by the High Court in 2019 to have breached their fiduciary duties to AHTC, while current party chief Pritam Singh had breached his “duties of skill and care”.

CJ Menon noted that they were grossly negligent in the payments process to managing agent FM Solutions and Services (FMSS), and may still be liable for damages.

The judgment comes some 20 months after a February 2021 hearing, where the four lawyers representing the parties in the AHTC appeal were grilled for six hours, as the apex court sought to ascertain if the WP leaders had breached their duties towards their town council and caused monies to be misspent.

The case dates back to 2017, when an independent panel appointed by AHTC launched a suit against the town councillors, including Mr Singh, Mr Low and Ms Lim, over $33 million in improper payments made under their watch.