Chiu Teng @ Kallang Pte Ltd v Singapore Land Authority

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 27 November 2013
• Neutral Citation: [2013] SGHC 262
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 457 of 2013
• Year: 2013
• Published date: 21 February 2014
• Hearing Date: 01 October 2013
• Plaintiff Counsel: Alvin Yeo SC, Lim Wei Lee, Lionel Leo and Edmund Koh (WongPartnership LLP)
• Defendant Counsel: Edwin Tong, Kristy Tan and Peh Aik Hin (Allen & Gledhill LLP),Aurill Kam, Lim Wei Shin, Terence Ang and Leon Ryan (Attorney-General's Chambers)
• Citation: [2013] SGHC 262

Tay Yong Kwang J:

This case concerns the judicial review of the Singapore Land Authority’s (“the SLA”) assessment of the differential premium (“DP”) payable for the lifting of title restrictions for two particular plots of land. The applicant alleges that the assessment of the DP was done without reference to the Development Charge Table of Rates (“the DC Table”) published by the Urban Redevelopment Authority (“the URA”). The applicant thus seeks a quashing order against the assessed DP and a mandatory order to direct the SLA to assess the DP in accordance with the DC Table. The Attorney-General, a non-party to the action, also made submissions during the hearing before me.

The facts leading to the application

The applicant is a company in the business of property development. It is currently the lessee of adjoining plots of land identified as Lot Nos 1338M TS 17 (“Lot 1338M”) and 2818V TS 17 (“Lot 2818V”) (collectively referred to as “the Land”).

The applicant acquired Lots 1338M and 2818V on 15 January 2010 and 25 March 2010 respectively through competitive tenders for the purpose of redevelopment. The SLA’s consent for the sale of both lots was needed and this was duly obtained.

The lease documents for both lots contained two references to the payment of a differential premium. The first, which will henceforth be referred to as the DP Clause, states thus:

The demised land shall not be used for other than the abovementioned development except with the prior permission of the Lessor. The lessee shall be required to pay a differential premium, as appropriate, in respect of any increase in floor area or change of use from a lower use category to higher use category from the existing use which will result in an enhanced value.

The second clause, henceforth referred to as the Land Return Clause, reads:

The Lessee shall notify the Lessor in writing of such portions of the demised land which are not used for the purposes specified. If directed by the Lessor, the Lessee shall surrender to the Lessor such land not used for the purposes specified at rates equivalent to the compensation payable for such land if it had been acquired under the Land Acquisition Act on the date of the direction.

Provided that if the Lessor does not issue a direction for the surrender of such land within 1 year from the said notification by the Lessee under this clause or within such other period as may otherwise be mutually agreed between the Lessor and the Lessee, the Lessor shall, at the request of the Lessee, lift the restrictions in the Lease under [the DP Clause] in relation only to such land; subject to the Lessee obtaining the necessary approvals from the relevant authorities regarding the proposed use of such lands and the payment of a differential premium under [the DP Clause].

Generally, state land is sold at a price based on the proposed use and intensity at the time of sale. State leases usually specify, as a condition in the lease, the permissible use of the land under the lease and the maximum gross floor area for the said permissible use. This ensures that the land is used in line with prevailing land policy, as evinced in the Master Plan (which is the statutory land use plan guiding Singapore’s development in the medium term over the next 10 to 15 years). The Master Plan shows the permissible land use and intensity for developments in Singapore. Each parcel of land is zoned for different categories of land use, which include commercial, residential and industrial use. Thus, state leases generally include a DP clause which stipulates that a DP shall be payable if there is a change in the use or an increase in the intensity of use beyond the permissible amount.

The SLA published two circulars and maintained a website to provide the public with information on how the payable DP is computed. The material portions of the first circular, which was published sometime in 2000 (“the 2000 SLA Circular”), stated (with “PP” meaning Provisional Planning Permission): 1. With effect from 31 July 2000, the Singapore Land Authority has implemented a transparent system of determination of differential premium (DP) for the lifting of State title restrictions involving change of use and/or increase in intensity. This is to encourage optimisation of land use and to facilitate the overall pace of redevelopment in Singapore. It will also provide greater certainty to landowners who will now be able to compute the DP payable themselves. 2. The determination of DP will be based on the published Table of Development Charge (DC) rates. …

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4. Where the use as spelt out in a particular title restriction does not fit into any of the Use Groups in the Table of DC Rates, the DP payable will be determined by the Chief Valuer on a case-by-case basis.

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6. As the material date for determination of DP is pegged to the PP date, all applications for lifting of title restriction must have a valid PP. Applications without a valid PP will be rejected. The Singapore Land Authority reserves the discretion on whether to grant an application for lifting of title restriction and/or topping up of lease in accordance with its policies.

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8. The new system for determining DP does not apply to the computation of premium payable for the upgrading of lease tenure (i.e. the topping-up of lease tenure). Such premium will still be assessed by the Chief Valuer on a case-by-case basis. 9. If you have any queries concerning this circular, please feel free to contact us at SLA. We will be pleased to answer queries on this matter.

The second circular, published sometime in 2007 (“the 2007 SLA Circular”), is substantially similar to the 2000 SLA Circular: 1. With effect from 18 July 2007, in line with the revision of the Development Charge (DC) system whereby Government will peg the amount of DC based on 70% of the enhancement in land value, the differential premium (DP) system will similarly be adjusted for the lifting of State title restrictions involving change of use and/or increase in intensity. 2. The determination of DP will still be based on the published Table of Development Charge (DC) rates. The material date of determination of DP will be pegged to the date of Provisional Planning Permission (PP) or the start date of the validity of the second and subsequent PP extensions, similar to DC. The prevailing Table of DC rates at the grant of PP will be used.

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4. Where the use as spelt out in a particular title restriction does not fit into any of the Use Groups in the Table of DC Rates, the DP payable will be determined by the Chief Valuer on a case-by-case basis. 5. As the material date for determination of DP is pegged to the PP date, all applications for lifting of title restriction must have a valid PP. Applications without a valid PP will be rejected. The Singapore Land Authority reserves the right on whether to grant an application for lifting of title restriction in accordance with its prevailing policies.

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7. The basis of charging 50% of the full value for remnant State land will remained unchanged notwithstanding the revision of the Development Charge (DC) system and correspondingly, the Table of DC Rates. Accordingly SLA will apply a factor of 5/7 to the new revised Table of DC Rates (i.e. Table of DC Rate x 5/7 x size of remnant State land x plot ratio) when computing the premium for remnant State land. 8. If you have any queries concerning this circular, please feel free to contact us at SLA. We will be pleased to answer queries on this matter.

The material portions of the SLA website (as assessed on 20 January 2011) are reproduced below:

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Differential Premium

A payment, known as differential premium (DP), will be charged for lifting the title restriction. The DP is the difference in value between the use and/or intensity stated in the State title and the approved use and/or intensity in the provisional planning permission.

DP is computed based on the Development Charge (DC) Table of Rates. The material date of determination of DP is pegged to the date of Provisional Permission (PP) or the date of the second and subsequent PP extensions. …

Where the use stipulated in the title restriction does not fit into any of the Use Groups in the DC Table, the DP payable will be determined by the Chief Valuer on a case-by-case basis.

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Option for Spot Valuation

Landowners/developers who are not satisfied with the differential premium (DP) payable based on the Development Charge (DC) Table of Rates can write in to SLA to appeal against the differential premium amount. SLA will then consult Chief Valuer (CV) for a spot valuation. …

If the new DP payable upon appeal turns out to be higher than the initial DP based on the DC Table of Rates, the appellant is not allowed to fall back on the initial DP amount.

If the appellant is still not satisfied with Chief Valuer’s spot valuation, another appeal can be made. However, before the second appeal is processed, the appellant must pay up the DP (based on CV’s valuation) first and an appeal fee of $10,000. If the revised DP on the second appeal is lower than the first appeal, the excess amount collected will be returned.

The SLA website had a section entitled “Terms of Use”. Two clauses are relevant to this application:

1. … By accessing and using any part of this Site, you shall be deemed to have accepted, and agreed to be bound by, these Terms of Use. …

Disclaimer of Warranties and Liability

8. The Contents of this Site are provided on an “as is” basis. SLA does not make any representations or warranties whatsoever and hereby disclaims all express, implied and statutory warranties of any kind to you or any third party, whether arising from usage or custom or trade or by operation of law or otherwise, including but not limited to the following:

a. any...