Management Corporation Strata Title Plan Nos 1298 and 1304 v Chief Assessor and Comptroller of Property Tax

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 29 November 2005
• Neutral Citation: [2005] SGHC 219
• Docket Number: Originating Motion No 600003 of 2002
• Date: 29 November 2005
• Year: 2005
• Published date: 02 December 2005
• Plaintiff Counsel: Oommen Mathew (Haq and Selvam) and Gopinath Pillai (Tan Peng Chin LLC)
• Citation: [2005] SGHC 219
• Defendant Counsel: Tham Siok Peng (Inland Revenue Authority of Singapore)
• Court: High Court (Singapore)
• Subject Matter: Areas of common property of shopping centre licensed for use by various other parties,Property tax,Whether such areas constituting taxable property under s 6(1) Property Tax Act,Revenue Law,Areas used to place automated teller machines, retail kiosks, pushcarts and weighing scale,Whether assessing such areas for tax in addition to units in shopping centre resulting in double taxation,Section 6(1) Property Tax Act (Cap 254, 1997 Rev Ed)

29 November 2005 Judgment reserved.

Woo Bih Li J:

Introduction

1 This motion is in respect of seven areas in the common property of Centrepoint Shopping Centre (“the Spaces”). The Chief Assessor had included the Spaces in the valuation list and the Comptroller of Property Tax (“the Comptroller”) had issued notices to the Management Corporation Strata Title Plan Nos 1298 and 1304 (“the MCST”) to inform the MCST that tax was payable on each of the Spaces. The Comptroller had allocated numbers to each of the Spaces and the MCST had granted licences to various parties to use the Spaces. Details of the numbers and usage are stated below:

	Unit No	Usage
1	#B1-K1	To place a weighing scale
2	#B1-K2 to #B1-K4	To place a temporary kiosk for promotions (Cold Storage)
3	#01-K2 to #01-K5	To place pushcarts for retail merchandise
4	#01-K6	Retail kiosk (Sins Choc Shoppe)
5	#01-K7	To place two automated teller machines
6	#01-K8	To place one automated teller machine
7	#01-K9	Retail kiosk (Dippin’ Dots)

2 The MCST appealed to the Valuation Review Board (“the Board”) against the decision of the Chief Assessor and of the Comptroller. The Board heard and dismissed the appeals. The present motion is the MCST’s appeal against the decision of the Board.

3 The primary issue before me is whether the Spaces are taxable under s 6(1) of the Property Tax Act (Cap 254, 1997 Rev Ed) (“PTA”). Various arguments were raised by the MCST to support its contention that they are not.

4 Section 6(1) of the PTA states:

As from 1st January 1961, a property tax shall, subject to the provisions of this Act, be payable at the rate or rates specified in this Act for each year upon the annual value of all houses, buildings, lands and tenements whatsoever included in the Valuation List authenticated under section 15 and amended from time to time in accordance with the provisions of this Act.

5 Therefore, the Spaces have to come within the meaning of at least one of the four categories, ie, “houses”, “buildings”, “lands” or “tenements” before they are taxable. I add that the four categories are not all exclusive of each other as there is some overlapping. For example, houses are also buildings. The Spaces must also have an annual value on which I will say more later. The Board was of the view that the Spaces come within the meaning of “tenements” and “lands”, and possibly “buildings” as well.

Tenements

6 The Board relied on Halsbury’s Laws of England vol 39(2) (Butterworths, 4th Ed Reissue, 1998) at para 78 on the meaning of “tenement” which states:

Meaning of ‘tenement’. The word ‘tenement’ is not restricted to lands and other matters which are the subject of tenure. Everything in which a person can have an estate of freehold, and which is connected with land or savours of the realty, is a tenement. Thus the word includes not only land, as the corporeal subject formerly of inheritance, but also all rights which before 1926 would have been heritable issuing out of land, or concerning, or annexed to, or exercisable over, land, although they do not lie in tenure, such as rents, commons and other profits à prendre and (formerly) tithes, and offices or dignities which descend to heirs, whether they relate to land or not.

In popular language ‘tenement’ means a house or part of a house capable of separate occupation, and is sometimes so used in statutes; and, where the language or the purpose of the statute so requires, the expression is restricted to property capable of visible and physical occupation, and does not include incorporeal rights.

There was no suggestion by the MCST that the tenure of a tenement must be freehold for the purpose of the PTA.

7 Mr Oommen Mathew, counsel for the MCST, relied on the dissenting judgment of Lord Sumner in Farmer (Surveyor of Taxes) v Trustees of the Late William Cotton [1915] AC 922 (“Farmer”) to argue that the Spaces are not tenements. In that case, a large building which was once occupied as a hotel, was let to a number of tenants with each tenant occupying premises consisting of one or more rooms. An issue arose as to whether the building was exempted from inhabited house duty. That exemption was allowed under s 13(1) of the Customs and Inland Revenue Act 1878 (c 15) if a house was divided into, and let in, different tenements and any of such tenements was occupied solely for the purposes of any trade or business, or of any profession or calling.

8 Lord Sumner was of the view that the exemption did not apply because some of the rooms were occupied by a caretaker. In his view, this meant that the building was not wholly divided into, and let in, separate tenements which he considered to be the requirement for exemption.

9 Mr Mathew relied on what Lord Sumner said at 938 to 940:

Inhabited house duty originated in 1778 (28 Geo.3, c.26), and from the first there has been special provision for the incidence of the duty, when a house is divided into different parts inhabited by different persons or families. From the first “tenement” was used in all the statutes as a term descriptive of a kind of such parts. It never seems to have had any precise meaning. It has never received any statutory definition. …

… Further, a tenement must be something which is capable of occupation for a business purpose. It is clearly a physical division.

10 Thus, Mr Mathew stressed that there must be some physical separation, presumably by walls. However, those parts of Lord Sumner’s judgment did not deal with spaces. I note that in another part of 940, Lord Sumner added:

Mere letting does not divide, and mere separate letting does not in this sense make a tenement; but the section does not in terms indicate what the fashion of that physical division may be. Would an uncovered yard, a dark cellar, the cavity under the slope of a roof, a large verandah, a space on a floor undefined by any marks or bounds though capable of being ascertained and defined, fall within the term?

At 943, he said:

To turn to the Scotch cases. In Russell v. Coutts [9R.261] Lord President Inglis, having said that “the meaning of the word ‘tenement’ in this statute is a part of a house so structurally divided and separated as to be capable of being a distinct property or a distinct subject to lease,” proceeded to hold that the large room used as a stamp office was not within the subsection, …

Then at 944 he said:

In the full width of Lord President Inglis’s definition I do not see why a space on a floor, physically separated from the rest by a painted boundary line, or a safe in a safe deposit, might not be tenements. Each is divided from the rest so as to be capable of exclusive possession, of separate letting, and of use for business purposes. The same might be said of a locked-up cupboard.

11 Accordingly, Lord Sumner was of the view that a space on a floor might be a tenement if it was physically demarcated by a painted line. The question which I asked myself was whether that painted line or the absence thereof indeed makes the difference in the context of the PTA.

12 On one argument, the entire area of the common property may be said to be constituting a tenement so as to be taxable even though it is not likely that the entire area will be let since there must be sufficient space for human traffic to move around the shopping centre. However, in the present case, the relevant authorities have not sought to treat the entire common property as one tenement but rather the Spaces as separate tenements. The Spaces may not have lines painted thereon, but, does that matter? For example, the automated teller machines (“ATMs”) stand on the very area which is used. It seems to me artificial to say that if a line is drawn around each machine, it becomes a tenement but not if no line is drawn. The same point applies to the area where a weighing scale is placed and the areas used by retail kiosks and pushcarts, although in the last example the pushcarts may be moved a bit to the left or right from time to time if there is no line drawn on the common property to indicate the actual area within which they must remain. However, the pushcarts are not moved around the shopping centre throughout the day. I am of the view that the Spaces are tenements even if no lines are drawn on the common property to demarcate the Spaces.

13 I am aware that in Farmer, Lord Parker of Waddington, who was in the majority, said at 933:

To bring the section into operation the house must be “divided into and let in different tenements.” Obviously “divided into different tenements” is not the same as “let in different tenements.” It must refer to some sort of structural division which would secure to the occupier of each divided part the exclusive use of that divided part, affording a physical barrier against intrusion by others. The floor of a Corn Exchange let in stands to corn merchants would not in this sense be divided into different tenements. The tenement must be so structurally divided and separated as to be capable of being a distinct property or a distinct subject of lease. This is the criterion laid down by the Lord President in Russell v. Coutts [9R.261], and approved by Lord Davey in Grant v. Langston [[1900] AC 383, at p 397].

However, it will be recalled that the legislation in Farmer required the house to be “divided into, and let in, different tenements”. Lord Parker had considered the requirement of division thereunder to require a tenement to be structurally divided and separated. My view that the Spaces constitute “tenements” under the PTA is not inconsistent with his view in the context of the legislation in Farmer.

14 Accordingly, I agree with the Board’s decision that the Spaces come within “tenements” under the PTA.

Lands

15 There is no definition of “lands” in the PTA. However, both Mr Mathew, and Ms Tham Siok Peng for the relevant authorities, agreed that the definition of “land” in the Land Titles Act (Cap 157,...