Aspinden Holdings Ltd v Chief Assessor and Comptroller of Property Tax

JudgeAndrew Ang J
Judgment Date28 April 2006
Neutral Citation[2006] SGHC 72
Docket NumberOriginating Motion No 7 of 2005
Date28 April 2006
Published date20 June 2006
Plaintiff CounselGurbachan Singh, Leong Kwong Wing and Chee Fang Theng (KhattarWong)
Citation[2006] SGHC 72
Defendant CounselJulia Mohamed (Inland Revenue Authority of Singapore)
CourtHigh Court (Singapore)
Subject Matter"Lot",Whether discretionary power of Chief Assessor to amalgamate accounts exercised arbitrarily or improperly,Chief Assessor amalgamating property tax accounts without authorisation from owner thereby reducing property tax rebates,Changes in rental for lease of strata lots,Chief Assessor seeking to amend Valuation List to reflect amalgamation of property tax accounts,Whether Chief Assessor having power to regard several lots together and assess annual value as a whole,Words and Phrases,Section 2(7) Property Tax Act (Cap 254, 2005 Rev Ed),Several strata lots occupied by each tenant,Chief Assessor amalgamating property tax accounts and reducing property tax rebates,Revenue Law,Judicial review,Annual value,Sections 20(1), 20(2) Property Tax Act (Cap 254, 2005 Rev Ed),Party walls between strata lots demolished,Whether strata lot must be separately assessed,Administrative Law,Whether each lot constituting separate property for purposes of assessing annual value,Whether Chief Assessor having power to reconfigure and amalgamate several strata lots into one property tax account,"Flat",Property tax,Valuation list,Whether Chief Assessor entitled and having valid grounds to amend Valuation List,Section 3 Land Titles (Strata) Act (Cap 158, 1999 Rev Ed),Whether flat can consist of more than one lot,Property comprising subsidiary strata lots

1 These were appeals against the decision of the Valuation Review Board (“the Board”) dismissing the appellant’s appeals against the Chief Assessor’s notices of assessment in respect of 155 subject properties, more particularly described below. As the facts are not in dispute, I have taken the liberty of adopting much of the Board’s summary of the same with little amendment.

Factual background

2 The appellant is a company incorporated in Singapore. On 17 May 2002, the appellant purchased various strata lots in the building known as Wisma Atria, located at 435 Orchard Road, Singapore, from Wisma Development Pte Ltd. Wisma Atria was strata subdivided in 1989 and is governed by the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) (“LTSA”). The strata lots were leased out to various tenants to operate retail or restaurant outlets.

3 The 155 subject properties were each issued with separate subsidiary strata certificates of title (“SSCT”). The tenants of those 155 subject properties actually operated a total of only 45 business units, as each retail or restaurant outlet physically occupied two or more strata-titled lots.

4 Separate property tax accounts were maintained for the majority of the 155 subject properties since 1989. As such, for the majority of the cases, each strata lot unit had its annual value individually assessed. Nevertheless, the appellant had requested the respondent to amalgamate the property tax accounts in certain instances prior to 2002. The respondent acceded to those requests and amalgamated the accounts for seven of the tenants. This resulted in a total of 138 property tax accounts being maintained for the 155 subject properties until November 2002.

5 On 21 November 2002, the respondent further amalgamated the 138 property tax accounts into 45 accounts, mostly with retrospective effect from 1 January 2002 (“the 2002 amalgamation”). The respondent then issued notices under s 20(2) of the Property Tax Act (Cap 254, 1997 Rev Ed) to amend the 2002 Valuation List.

6 In the majority of cases, the “amalgamated” annual values ascribed to the properties were largely similar to the aggregate of the annual values of the component strata lots. Thus, where prior to the 2002 amalgamation, the annual values for units #B1-03 and #B1-04 were assessed at $116,000 and $140,000 respectively, pursuant to the 2002 amalgamation, the “amalgamated” annual value for the two units was $256,000, this being the sum of the annual values of the two units.

7 The appellant initially filed notices of appeal in respect of 46 “amalgamated” notices of assessment. Before the Board, only 45 of the appeals proceeded for hearing, relating to the 155 subject properties. The main point of contention on appeal was that the 2002 amalgamation had caused a substantial reduction in property tax rebates which the appellant might otherwise have been entitled to pursuant to various property tax remission orders.

The property tax remission orders

8 In 2001, the Government had announced an off-budget relief package, which included a 25% property tax rebate for commercial and industrial properties for one year with effect from 1 July 2001. On 12 October 2001, the Finance Minister revised the off-budget package to provide for a fixed rebate of up to $8,000 per year to all commercial and industrial properties with a further rebate of 30% for any balance of the property tax payable. The Property Tax (Non-Residential Buildings) (Remission) (No 2) Order 2001 (S 553/2001) implemented this new rebate scheme, which was to take effect from 1 July 2001 to 31 December 2002 (“the 2001 remission order”). This rebate scheme was extended to 30 June 2003 by a further remission order in 2002. Subsequently, there was another (final) extension of the remission order to 31 December 2003.

9 The appellant contended that by the 2002 amalgamation, the respondent had acted unreasonably, arbitrarily and unfairly to deny the appellant the benefit of property tax rebates pursuant to the remission orders.

10 Using units #B1-03 and #B1-04 (“the Bossini outlet”) once again as an illustration, the appellant noted that the consequence of the 2002 amalgamation was that the property tax rebate was reduced by $5,600. Prior to the 2002 amalgamation, the property tax remitted pursuant to the 2001 remission order was the aggregate of:

(a) $8,000, this being 100% of the property tax in relation to the first $80,000 of the annual value; and

(b) 30% of the property tax in relation to the annual value exceeding $80,000.

11 Thus, only 70% of the property tax in relation to the annual value exceeding $80,000 would be payable in respect of each of such property. The annual values for the component units of the Bossini outlet were previously assessed at $116,000 and $140,000. Thus, the property tax payable (at the rate of 10%) was as follows:

(a) #B1-03: ($116,000 less $80,000) x 70% x 10% = $2,520

(b) #B1-04: ($140,000 less $80,000) x 70% x 10% = $4,200

Total: = $6,720

12 However, after the 2002 amalgamation, with both units merged into one property tax account, the aggregate annual value ascribed to the Bossini outlet was $256,000. Hence the property tax payable was: ($256,000 less $80,000) x 70% x 10% = $12,320. The 2002 amalgamation had therefore resulted in additional property tax in respect of the Bossini outlet to the tune of $5,600 (ie, $12,320 less $6,720).


13 The appellant framed the issue on appeal thus: What is the proper assessable entity, for the purposes of determining annual value, according to the Property Tax Act (Cap 254, 2005 Rev Ed) (“the Act”)? In particular, does the Act require each subject property to be assessed separately, or does it confer upon the Chief Assessor the power to reconfigure and amalgamate a few subject properties into one property tax account?

14 The main plank on which the appellant based its contention for separate assessment for each strata lot was s 2(6) of the Property Tax Act (Cap 254, 1997 Rev Ed) (re-numbered s 2(7) in the Act). On behalf of the Chief Assessor, it was contended that following the rebus sic stantibus principle (viz, that the properties should be assessed as they stand and as used) the Chief Assessor was correct to have assessed the subject properties as amalgamated business units on the basis of their use as such.

15 Subsidiary issues that were raised included the following:

(a) Whether the Valuation List had become inaccurate in any material particular so as to warrant its amendment pursuant to s 20 of the Act.

(b) Whether the method of assessment adopted by the Chief Assessor was primarily to deny the appellant the full benefit of the remission orders and as such was unreasonable or improper.

Interpretation of s 2(7) of the Act

16 With the introduction of strata subdivision under the LTSA, an amendment was made to the Property Tax Ordinance 1960 (No 72 of 1960) with effect from 1 January 1969 to provide for the assessment of annual value in respect of a strata-subdivided building. The new proviso (e) to s 2 (subsequently, s 2(6) of the Property Tax Act (Cap 254, 1997 Rev Ed) and now, s 2(7) of the Act) of the Act provides as follows:

In assessing the annual value of any property which comprises a lot the title of which is issued under the Land Titles (Strata) Act (Cap. 158) —

(a) the subsidiary proprietor of the lot shall be deemed to be the owner thereof;

(b) the annual value of the lot shall be determined as if that lot comprised a freehold estate in land; and

(c) no separate annual value shall be attributed to the land upon which the subdivided building stands.

17 The appellant contended that s 2(7) requires that such property comprising a subsidiary strata lot be assessed separately for the purpose of determining annual value. It pointed out that s 2(7) refers throughout to “the lot” and that therefore each lot constituted a separate property for the purpose of assessing annual value.

18 The Board, however, pointed to the predominant use of the word “flat” rather than “lot” in the Explanatory Statement to the Property Tax (Amendment) Act 1968 (Bill 31 of 1968), as well as in Parliamentary debates as supporting its view that the word “lot” in s 2(7) of the Act should be read as if it referred to “flat”, a term defined in the LTSA but not in the Act. In its view, since a “flat” as defined in the LTSA could consist of more than one lot, the Board’s interpretation would allow the subject properties in the instant case to be assessed on an amalgamated basis given that they were used as integrated business units.

19 Whilst the Board did concede that what they were propounding was a “purposive and strained” interpretation, they felt it was justified because s 2(7) contained “a palpable error in the text which plainly falsifies Parliament’s intention” (see [2005] SGVBR 2 at [83]). With due respect to the Board, I am unable to agree with this interpretation. The word “flat” was used interchangeably with “lot” in the Explanatory Statement and in the Parliamentary debates because they did refer to the same thing. The support which the Board found in the definition of “flat” in the LTSA for its view that a flat could consist of more than one lot is questionable. Section 3 of the LTSA defines a “flat” as follows:

“flat” means a horizontal stratum of any building or part thereof, whether such stratum is on one or more levels or is partially or wholly below the surface of the ground, which is used or intended to be used as a complete and separate unit for the purpose of habitation or business or for any other purpose, and may be comprised in a lot, or in part of any subdivided building not shown in a registered strata title plan. [emphasis added]

The Board took the words “and may be comprised in a lot” as suggesting that the flat could consist of more than one lot. With due respect, I do not believe that was what the definition was intended to convey. In practice, even when two lots are...

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3 cases
  • Aspinden Holdings Ltd v Chief Assessor and Comptroller of Property Tax
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    • Court of Appeal (Singapore)
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  • Pan United Marine Ltd v Chief Assessor
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2 books & journal articles
  • Administrative and Constitutional Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2006, December 2006
    • December 1, 2006
    ...that the Chief Assessor of Property Tax had acted irrationally in Aspinden Holdings Ltd v Chief Assessor and Comptroller of Property Tax[2006] 3 SLR 99 (HC), [2006] 4 SLR 521 (CA), these failed. Most notably, the concept of pre-maturity in relation to early stage applications for judicial r......
  • Revenue and Tax Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2006, December 2006
    • December 1, 2006
    ...Court and Court of Appeal gave written judgments last year for Aspinden Holdings Ltd v Chief Assessor and Comptroller of Property Tax[2006] 3 SLR 99 (HC) and [2006] 4 SLR 521 (CA). This review will therefore focus on the Court of Appeal”s decision. All details and references are to the Cour......

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