Chief Assessor, Property Tax v Howe Yoon Chong

• Jurisdiction: Singapore
• Judge: Sinnathuray J
• Judgment Date: 18 November 1987
• Neutral Citation: [1987] SGCA 19
• Docket Number: Civil Appeal No 76 of 1984
• Date: 18 November 1987
• Published date: 19 September 2003
• Year: 1987
• Plaintiff Counsel: McKinnon QC and Lucy Hangchi
• Citation: [1987] SGCA 19
• Defendant Counsel: David Widdecombe QC and P Selvadurai (Rodyk & Davidson)
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether Chief Assessor has consistent policy and practice,Revenue Law,Whether Chief Assessor's actions unconstitutional,Renovation,Administrative practice in reassessment of annual value,Property tax,Assessment of annual value of private owner -occupied property,Constitutional Law,Equality before the law,Administrative practice of Chief Assessor,art 12(1) Constitution of the Republic of Singapore,Annual value,ss 2, 17(4), 18(7), 19(3) & 20 Property Tax Act (Cap 144, 1970 Ed),Whether practice unfairly discriminates against owner-occupiers,Increase in annual value

Cur Adv Vult

Mr Howe Yoon Chong, the respondent, is the owner of a two-storey detached residential house, known as No 9, Binjai Walk, erected on a site containing an area of 18,902 sq ft which is situate in a good residential area. At all material times he was, and still is, in occupation of the property (the property). The house was built in 1966, and following the completion of the house, the property was first assessed at an annual value of $2,400. As it was owner-occupied, the respondent paid property tax at a concessionary rate of 23% of the annual value, amounting to $552 pa. In 1970, there was a general assessment of annual values of properties situate in Binjai Walk, Binjai Park, Binjai Rise, Binjai Hill and the adjoining lands (all such areas being hereinafter collectively referred to as Binjai Park area). In the general assessment, the annual value of the property was increased from $2,400 to $8,400 with effect from 9 February 1970. The increase was objected to by the respondent, and on appeal it was confirmed by the Valuation Review Board. Though the annual value of the property had been increased, the property tax, by virtue of the concessionary rate granted by the Comptroller of Property Tax and a remission made by the Minister in charge, remained the same, ie $552 pa. The annual value of $8,400 remained in the Valuation List up to 1975, and the respondent continued to pay the property tax at $552 pa throughout this period.

In 1970, some alterations were made to the house but apparently no notice thereof was given to the Chief Assessor, which the respondent was required to do under the Property Tax Act (Cap 144; now Cap 254, 1985 Ed) (the Act). About five years later, in 1975, substantial alterations and additions were made to the house which were completed in December 1975. The alterations and additions, at a cost of about $48,000, had resulted in an increase of the net floor area of the house from 3,547 sq ft to 5,554 sq ft and an increase in the number of bedrooms by two to five. On 12 February 1976 or thereabout, the respondent`s architects notified the Chief Assessor of the alterations and additions made and the date of completion thereof.

Consequent upon the notice given by the respondent`s architects, the Chief Assessor proceeded to amend the Valuation List under s 18, now s 20, of the Act and re-assessed the annual value of the property. By a notice dated 23 August 1976, the Chief Assessor notified the respondent that the former proposed to amend the Valuation List 1976 by increasing the annual value of the property to $28,800 with effect from 1 January 1976. The Comptroller of Property Tax also issued a notice dated 23 August 1976 to the respondent under s 19(3), now s 21(3), of the Act that $612 was payable as property tax of the property, upon authentication of the annual value as proposed by the Chief Assessor, for the period 1 December to 31 December 1975. The respondent objected to both the notices and upon the refusal by the Chief Assessor and the Comptroller of Property Tax to amend their proposals, the respondent appealed to the Valuation Review Board (the Board). In the meanwhile, the Comptroller of Property Tax, by a letter dated 30 November 1976, informed the respondent that `as a further concession to owner-occupied dwelling house`, `the full tax` would not be collected but a reduced amount of $533.60 half-yearly (or $1,067.20 yearly) would be payable, and for the tax for December 1975 the reduced amount was $88.93. Before the Board, the respondent`s grounds of appeal against the assessment of the Chief Assessor, as summarized by the Board, were as follows:

(a) The Chief Assessor erred in law and in fact in increasing the annual value of his property in comparison with other similar properties in Singapore;

(b) The proposed annual value of $28,800 is manifestly excessive and wrong in law and should remain at $8,400; and

(c) The proposed valuation or increased valuation of the appellant`s property is ultra vires the Property Tax Act and the Constitution of the Republic of Singapore.

The appeal against the Comptroller`s decision was consequential on the appeal against the assessment of the Chief Assessor, and the respondent`s contention was that the property tax payable should be assessed on the annual value of $8,400.

The Board dismissed the appeals. The Board found as a fact that the house had been `enlarged, altered` or `improved`. The Valuation List had thereby become inaccurate in a material particular, and the Chief Assessor was entitled under s 18 of the Act to amend the annual value of the property. On the question of assessment of the annual value, the Board came to the conclusion that the Chief Assessor had assessed the annual value of the property in conformity with the statutory provision, that is, s 2 of the Act, and that the annual value of $28,800 was a fair and reasonable amount at which the property could, in 1976, have been reasonably expected to be let from year to year on the basis of a hypothetical tenancy. On the constitutional issue, the Board said that, on the evidence it did not find that there had been any `intentional systematic under-valuation` of owner-occupied properties as contended by the respondent.

On appeal, the decision of the Board was reversed by the High Court: see Howe Yoon Chong v Chief Assessor, Property Tax [1984-1985] SLR 472 . Before the High Court, the principal issue was whether the Chief Assessor, in assessing the annual value of the property at $28,800, had infringed art 12(1) of the Constitution of the Republic of Singapore. As set out by the learned judge, the respondent complained `that by reason of an aspect of the administrative practice of the Chief Assessor, he had not been accorded the equal protection of the law under art 12(1) of our Constitution`. The learned judge found that the Chief Assessor had decided as a matter of administrative policy and practice that, with regard only to owner-occupied properties in Singapore, there would be a general assessment of the annual value once in every nine or ten years, unless such owners had carried out alterations or unless such owners had ceased to occupy their properties and had let them out. He said:

Now, it is clearly established in the cross-examination of the valuer of the Chief Assessor`s office that in view of government`s policy to encourage home ownership, the shortage of valuers and the administrative difficulties involved in having to assess the annual values of some 400,000 properties in Singapore, it was decided by the Chief Assessor as a matter of administrative policy and practice that with regard only to owner-occupied properties in Singapore, there would only be a `general assessment` of the annual values once in every nine or ten years, unless such owners carried out renovations or unless such owners had ceased to occupy their properties and had let them out.

The complaint of the respondent, as set out in the judgment, was this:

He says that as he had retained his owner-occupier status throughout, the property should not have been assessed on the rental values current in 1976, which assessment prematurely took him out of the owner-occupier class. He readily concedes that there should be a proportionate increase in the annual value but he says he was unfairly treated if he were to be foisted with the increase of a notional rental value. On the basis of the appellant`s contention, the unit rate of $3.59 should have been multiplied by the new `reduced` area of 4,526 sq ft, which would have produced the annual value of only $16,240. He submits that this annual value should have been applied until the next `general assessment` of annual values in 1979 or 1980 of properties in Binjai Park.

The learned judge came to the conclusion that the administrative practice carried out by the Chief Assessor was inconsistent with the provisions of art 12(1) of our Constitution. He said:

In my judgment, the administrative practice carried out in this case was inconsistent with the provisions of art 12(1) of our Constitution. The appellant should have been accorded the privilege of other owner-occupiers until the next `general assessment` in 1979 or 1980. Any increase in the annual value of the property should have been limited to the unit rate per square foot current in 1970 which should be applied to what is technically called the new `reduced` area. The appellant, as an owner-occupier, was in 1976 similarly situated in all material respects with other owner-occupiers whose properties were fortuitously not renovated. To have treated him differently as though he had notionally let out his property for the purpose of determining the annual value was to make a distinction without a difference.

The unfairness of the administrative practice may be illustrated by an example. Suppose, a bungalow in Binjai Park in 1970 had a `reduced` area of 4,526 sq ft. As a result of the `general assessment` carried out in 1970, the annual value of that bungalow would only be $16,240. If it were owner-occupied throughout the decade from 1970 during which no renovations were carried out, the annual value would remain unamended until the next `general assessment` in 1979 or 1980. In terms of both the status of owner-occupation and the `reduced` area, the bungalow is exactly the same as the property of the appellant. Yet, the annual value of the property of the appellant was raised to $28,800 although, in spite of the renovations, the `reduced` area of the property of the appellant is exactly the same as that of the bungalow I have mentioned. This illustration is not at all far-fetched, seeing that the `reduced` area of another owner-occupied property in Binjai Park and known as No 63 Binjai Park, Singapore is near enough to that of the hypothetical example I have mentioned. The appellant`s property and the hypothetical example I...