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

• Jurisdiction: Singapore
• Judge: Andrew Ang J
• Judgment Date: 01 September 2006
• Neutral Citation: [2006] SGCA 29
• Docket Number: Civil Appeal No 146 of 2005
• Date: 01 September 2006
• Year: 2006
• Published date: 01 September 2006
• Plaintiff Counsel: Ong Sim Ho, Yang Shi Yong and Sophine Chin (Ong Sim Ho)
• Citation: [2006] SGCA 29
• Defendant Counsel: Tham Siok Peng (Inland Revenue Authority of Singapore)
• Court: Court of Appeal (Singapore)
• Subject Matter: Revenue Law,Common property of shopping centre licensed by management corporation of shopping centre for use by various parties for fee,Sections 2(7), 6(1) Property Tax Act (Cap 254, 2005 Rev Ed),Valuation list,Whether common property in shopping complex under land title strata scheme exigible to property tax when such common property let or licensed for use for rent or fee,Chief Assessor including common property in Valuation List for assessment of property tax payable thereon,Owner,Sections 2(1), 2(7)(a), 6(2) Property Tax Act (Cap 254, 2005 Rev Ed),Property tax,Whether management corporation "owner" of common property and liable to pay property tax thereon

1 September 2006

Andrew Ang J (delivering the grounds of decision of the court):

Background

1 This is an appeal by the Management Corporation Strata Title Plan Nos 1298 and 1304 (“the MCST” or “the appellant”) against the decision of Woo Bih Li J, upholding the inclusion, in the Valuation List and the assessment of property tax, of seven areas in the common property (“the Spaces”) of Centrepoint Shopping Centre (“the shopping complex”). As the MCST had licensed various parties to use the Spaces, the Chief Assessor had included the Spaces in the Valuation List and the Comptroller of Property Tax (“the Comptroller”) had issued notices of assessment in respect of each of them. Details of the numbers and usage are as stated in the judgment below ([2006] 1 SLR 465) at [1] and are as follows:

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 the Comptroller but the appeal was dismissed. Its further appeal to the High Court was, likewise, dismissed. Hence this appeal. We note that this is the first time this court has to decide on the exigibility to property tax of common property in a shopping complex under a land title strata scheme.

Issues

3 The primary issue before us is whether the Spaces are assessable to tax under s 6(1) of the Property Tax Act (Cap 254, 2005 Rev Ed) (“the PTA”) which reads:

Charge of property tax

6.—(1) 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 and amended from time to time in accordance with the provisions of this Act.

Interpretation of section 2(7) of the PTA

4 In order that the Chief Assessor may include the Spaces in the Valuation List, they must fall within the meaning of “houses, buildings, lands [or] tenements” in s 10(1) of the PTA. Despite the appellant’s contention otherwise in the High Court, it is now common ground that the Spaces are tenements. Nevertheless, the appellant maintains that the Spaces ought not to be subject to property tax. The crux of the appellant’s contention is that “a subsidiary proprietor’s undivided interest and share in the common property is inalienably attached to his lot and is subject to tax with his lot as a composite whole” so that “when all the lots are subject to tax, the common property in the strata development would concomitantly have been taxed”. Consideration of this contention necessitates an examination of s 2(7) of the PTA (previously s 2(6) of the Property Tax Act (Cap 254 1997 Rev Ed)) which reads:

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.

5 Counsel for the appellant argued that on a true construction, the subject matter of s 2(7), ie, “property which comprises a lot the title of which is issued under the Land Titles (Strata) Act” is not simply a “lot”. In so arguing, presumably he read the word “comprises” as meaning “includes” rather than “consists of”. Thus, on his argument, the property whose annual value is to be assessed is property which “includes” not only the lot, but also the relevant share of the common property owned by the subsidiary proprietor of the lot. However, a reference to the definition of “common property” readily disposes of this argument.

6 “Common property” as defined in s 3(1) of the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) (“LTSA”) means:

(a) in relation to any land and building comprised or to be comprised in a strata title plan, such part of the land and building —

(i) not comprised in any lot or proposed lot in that strata title plan; …

[emphasis added]

The similarity in the language of s 2(7) of the PTA and this definition rules out the construction advanced by counsel for the appellant. In the same way that the definition of “common property” excludes property comprised in any lot, “property which comprises a lot” in s 2(7) of the PTA excludes common property; they are mutually exclusive.

7 Counsel for the appellant further argued that the subsidiary proprietor’s share of the common property being inalienably tied with the lot, it could not have been Parliament’s intention to exclude common property from a charge to property tax when it enacted s 2(7) of the PTA. Our interpretation of s 2(7), however, does not bear that out. If it was indeed Parliament’s intention that the subsidiary proprietor’s share of the common property should be taken into account in the assessment of the annual value of the lot, it would have been easier to say so explicitly. Instead, s 2(7)(c) of the PTA specifically provides that “no separate annual value shall be attributed to the land upon which the subdivided building stands”. It would have been remiss of the legislative draftsman to have sought to effect such inclusion merely by the use of the word “comprise” without identifying what was to be included.

8 Assuming arguendo that the words “property which comprises a lot” includes the relevant share of the common...