CDL Properties Ltd v Chief Assessor and another

• Jurisdiction: Singapore
• Judge: Chan Sek Keong CJ
• Judgment Date: 09 January 2012
• Neutral Citation: [2012] SGCA 1
• Court: Court of Appeal (Singapore)
• Hearing Date: 15 August 2011
• Docket Number: Civil Appeal No 29 of 2011
• Plaintiff Counsel: Ang Cheng Hock SC, Sunit Chhabra, Tang Siau Yan and Kenneth Lim (Allen & Gledhill LLP)
• Defendant Counsel: Julia Mohamed and Joyce Chee (Inland Revenue Authority of Singapore)
• Subject Matter: Revenue Law,Property tax,Annual value,Reassessment of annual value,When increased property tax payable,Interest on overpaid property tax
• Published date: 03 February 2012

Chan Sek Keong CJ (delivering the judgment of the court): Introduction

This is an appeal by CDL Properties Ltd (“CDL”) against the decision of the High Court judge (“the Judge”) in CDL Properties Ltd v Chief Assessor and another [2011] 2 SLR 1077 (“the HC Judgment”) affirming the decision of the Valuation Review Board (“the VRB”) to amend the annual values prescribed by the Chief Assessor for 117 units in the development known as “Republic Plaza” located at 9 Raffles Place, Singapore 048619.

The first and second respondents (collectively, “the Respondents”) are the Chief Assessor and the Comptroller of Property Tax (“the Comptroller”) respectively. They are different and distinct entities under the Property Tax Act (Cap 254, 2005 Rev Ed) (“the PTA”). The Chief Assessor’s principal functions and duties, in so far as this appeal is concerned, are as follows: under s 4(2) of the PTA, the Chief Assessor is responsible for assessing the annual values of all “properties” (defined in s 2(1) of the PTA as “includ[ing] houses, buildings, lands and tenements”) for the purposes of the PTA; under s 10(1) of the PTA, the Chief Assessor is also charged with the duty of preparing a list (referred to in the PTA as the “Valuation List”) containing, inter alia, the annual values of all properties; under s 11 of the PTA, the Chief Assessor may, at his discretion, either: (i) cause to be prepared a new Valuation List every year, or (ii) adopt the Valuation List then in force, with such alterations and amendments as may have been made from time to time in accordance with the provisions of the PTA; and under s 20(1) of the PTA, the Chief Assessor may amend the Valuation List where it appears that: (i) it is or has become inaccurate in any material particular in any year, or (ii) it is likely to become inaccurate in any material particular in the ensuing year. In respect of a property such as Republic Plaza (ie, a property which is not a wharf, pier, jetty or landing-stage), the term “annual value” is defined in s 2(1) of the PTA as “the gross amount at which the [property] can reasonably be expected to be let from year to year, the landlord paying the expenses of repair, insurance, maintenance or upkeep and all taxes (other than goods and services tax)”.

As for the Comptroller, he is vested under s 4(1) of the PTA with the responsibility, generally, for carrying out the provisions of the PTA, as well as for collecting property tax and paying it into the Consolidated Fund.

The facts

CDL is the owner of Republic Plaza, which is a large commercial building situated at Raffles Place. Between 6 and 8 June 2007, the Chief Assessor, in exercise of his power under s 20(1) of the PTA, issued several notices to inform CDL of his intention to reassess the annual values of the 117 units mentioned at [1] above (referred to hereafter as “the 117 Units”) as follows: the annual values of 115 of the units (“the 115 Units”) would be amended from $4.20 per square foot per month (“psf/mth”) to $11 psf/mth with effect from 1 January 2007; and the annual values of two of the units (“the 2 Units”) would be amended from $4.20 psf/mth to $11 psf/mth with effect from 16 June 2007.

Section 20(1) of the PTA provides as follows:

Where it appears that any Valuation List — (a) is or has become inaccurate in any material particular in any year; or (b) is likely to become inaccurate in any material particular in the ensuing year,

the Chief Assessor may, in the year referred to in paragraph (a), if he considers it desirable that an amendment should be made to the Valuation List, give notice thereof to the owner of the property concerned stating the amendment that is considered desirable and the date from which it is proposed the amendment shall take effect, and the amendment shall be made in the Valuation List from that date.

Under s 20A(2) of the PTA, any “owner” (as defined in s 2(1) of the PTA) who desires to object to an amendment made to the Valuation List under s 20 shall make his objection in writing to the Chief Assessor within 21 days of the service of the notice referred to in s 20(1) (the “s 20(1) notice”). Under s 20A(7) of the PTA, any owner dissatisfied with the decision made by the Chief Assessor disallowing his objection (whether in whole or in part) may appeal to the VRB in the manner provided in s 29 of the PTA. Under s 20A(8) of the PTA, where the VRB varies any annual value in the Valuation List in an appeal before it, the Chief Assessor shall cause the Valuation List to be amended in accordance with the decision of the VRB.

In the present case, each of the s 20(1) notices issued to CDL (collectively, “the Disputed Notices”) was issued in the name of one Ms Ang Sock Tiang (“Ms Ang”), who described herself as “Chief Assessor and Asst Comptroller of Property Tax”¹ [capital letters in original omitted]. Each of the Disputed Notices further contained the following statement: “Please note that Property Tax has to be paid even if you have filed an objection/appeal/claim”² [emphasis added] (“the Notification”). Apropos the Notification, it may be noted that s 35A(1)(d) of the PTA provides that notwithstanding that an objection has been made under s 20A to the Chief Assessor, the owner of the property concerned shall pay “to account of tax in respect of [the] property a sum of money calculated at the prescribed rate of tax on the basis of the annual value in the Valuation List proposed or amended under the provisions of [the PTA]”. CDL paid the property tax outstanding for 2007 that resulted from the Chief Assessor’s proposed amendments to the annual values of the 117 Units, and, after unsuccessfully raising an objection with the Chief Assessor in accordance with the provisions of the PTA, lodged two separate sets of appeals to the VRB (one set in respect of the 115 Units (“the appeals relating to the 115 Units”) and one set in respect of the 2 Units (“the appeals relating to the 2 Units”)) under s 20A(7) of the PTA.

At the hearing before the VRB, CDL’s appeals were based on the quantum of the proposed increase in the annual values of the 117 Units, and not on the legality of the Chief Assessor’s proposed action to reassess these units’ annual values and amend the Valuation List for 2007 with respect to these units. CDL argued that the Chief Assessor’s amended annual values of $11 psf/mth for the 115 Units with effect from 1 January 2007 and $11 psf/mth for the 2 Units with effect from 16 June 2007 were excessive, and that the appropriate amended annual values would instead be $7 psf/mth for the 115 Units with effect from 1 January 2007 and $9.80 psf/mth for the 2 Units with effect from 16 June 2007. In support of its proposal, CDL relied on, inter alia, what was termed the “Market Comparison Method of Valuation” and the existing rent for units in Republic Plaza as reference points (see CDL Properties Ltd v Chief Assessor [2009] SGVRB 1 (“the VRB’s GD”) at [5]).³

The VRB dismissed the appeals relating to the 2 Units (see the VRB’s GD at [26]).⁴ In contrast, the VRB allowed the appeals relating to the 115 Units in part by ordering (at [25] of the VRB’s GD)⁵ that the annual values of those units be set at $7 psf/mth with effect from 1 January 2007 and, thereafter, at $11 psf/mth with effect from the dates of the Disputed Notices (“the Notice Dates”), which, in respect of most of the notices, would be 8 June 2007. The VRB’s reasons for varying the annual values of the 115 Units in this manner were explained in the VRB’s GD as follows:⁶ 22. Restricting the survey to rental evidence around the period 1 January 2007 to June 2007, the [VRB] was of the view that there was sufficient evidence to indicate that rentals had risen to $11 psf/mth by the end of the second quarter of 2007 (i.e. around the date[s] of the [Disputed] Notices): 22.1 Leases in Republic Plaza contracted between May and July 2007 ranged between $10.50 psf/mth and $12.80 psf/mth. The lease at $12.80 psf/mth was a 2-year lease while the lease at $10.50 psf/mth was a 3-year lease. The rental evidence for 2007 shows that rents for 2-year leases were on average higher than rents for 3-year leases. 22.2 The table of Average Grade A Office (Gross) rentals for 2007 compiled by the [Chief Assessor] indicates that average rents for 2Q07 ranged between $11.00–$14.50 psf/mth and for 4Q06 (a proxy for 1 January 2007) ranged between $8.73 to $9.10 psf/mth.

Although the VRB allowed the appeals relating to the 115 Units in part, it did not award CDL costs against the Chief Assessor with respect to those appeals. Similarly, although CDL failed in the appeals relating to the 2 Units, the VRB did not order CDL to pay the Chief Assessor’s costs for those appeals. The VRB also did not award CDL interest on the amount of overpaid property tax refunded to it with respect to the 115 Units (“the overpaid property tax in respect of the 115 Units”) as it did not make the relevant application to the VRB.

Dissatisfied with the VRB’s decision, CDL appealed to the High Court under s 35(1) of the PTA via Originating Summons No 511 of 2009 naming the Chief Assessor and the Comptroller as the first and second respondents respectively. CDL’s appeal against the VRB’s decision was based predominantly on the argument that the VRB erred in both law and fact in: (a) making the orders set out at [9] above vis-à-vis the annual values of the 117 units; (b) not awarding CDL interest on the overpaid property tax in respect of the 115 Units; and (c) not awarding costs to CDL with respect to the appeals relating to the 115 Units.

As mentioned earlier (at [1] above), the Judge dismissed CDL’s appeal. It is not necessary for us to examine the Judge’s reasons for dismissing CDL’s appeal in so far as: (a) the quantum of the increase in the annual values of the 117 Units and (b) the costs of the appeals relating to the 115 Units are concerned, as CDL is...