Ong Beng Chong v Commissioner of Stamp Duties

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 05 April 2019
• Neutral Citation: [2019] SGHC 91
• Court: High Court (Singapore)
• Docket Number: Tax Appeal No 17 of 2018
• Year: 2019
• Published date: 25 May 2019
• Hearing Date: 19 November 2018,01 November 2018,07 February 2019,29 March 2019
• Plaintiff Counsel: Tan Bar Tien and Tan Xin Er, Slyvie (B T Tan & Company)
• Defendant Counsel: Lau Kai Lee and Shawn Joo Jian Hua (Inland Revenue Authority of Singapore (Law Division))
• Subject Matter: Revenue Law,Stamp duties,Instruments liable to ad valorem duty,Stamp Duties Act
• Citation: [2019] SGHC 91

Choo Han Teck J:

Ong Beng Chong (“the Appellant”) was the landlord of an undivided plot of land known as Lot 550P Mukim 13 (“the Land”). This is his appeal pursuant to s 40 of the Stamp Duties Act (Cap 312, 2006 Rev Ed) (“SDA”) against an assessment of stamp duty by the Commissioner of Stamp Duties (“the Respondent”). This court was asked to determine whether stamp duty is chargeable on six instruments (“the Instruments”) relating to the delivery of vacant possession of: No. 21 and 23 Meng Suan Road; No. 22 Meng Suan Road; No. 24 Meng Suan Road; No. 26 Meng Suan Road; No. 27 Meng Suan Road; and No. 28 Meng Suan Road (each a “House” and collectively referred to as “the Houses”) to the Appellant.

The Houses were seven terrace houses situated on the Land, built by the respective tenants who paid ground rent to the Appellant. No land title was issued in respect of the Houses. The Appellant sought to recover vacant possession of the Land for the purposes of redevelopment. The Appellant then entered into five agreements with the respective owners of the Houses (except No. 24 Meng Suan Road) for the delivery of vacant possession of the Houses in exchange for payment which ranged between $200,000 to $250,000 (“the Agreements”). It was undisputed that the Appellant agreed to make this payment because the tenants, who owned the Houses, had an equity that must be satisfied before the Appellant can recover vacant possession of his Land (see Ong Beng Chong v Goh Kim Thong [2010] SGHC 195 (“Goh Kim Thong”) at [7] and Ong Beng Chong v Jayaram Victoria and another matter (“Jayaram Victoria”) [2009] SGHC 66 at [37]–[40]).

In relation to No. 24 Meng Suan Road, the Court of Appeal by an Order of Court dated 11 November 2010 (“the Order of Court”) ordered the owner of the House to deliver vacant possession of his House to the Appellant in exchange for payment of $200,000 as compensation. On 16 November 2012, the Appellant sold the Land and the Houses to Meng Suan Development Pte Ltd for $15.5m, and the Houses were demolished. In 2016, the Respondent conducted stamp duty audit investigations and determined that stamp duties of $19,700 and penalties of $35,800 are payable on the Instruments. The Appellant appealed against the Respondent’s decision which is the issue before this court.

Pursuant to s 22 and Article 3 of the First Schedule of the SDA read with the definition of a “conveyance on sale” under s 2 of the SDA, the Instruments will be chargeable with stamp duty if the following requirements are satisfied: The Instruments are executed in Singapore or relate to any property situated in Singapore; The Houses are immovable property; and There is a conveyance, assignment or transfer on sale of the Houses.

I will deal with each requirement in turn. The first requirement is satisfied as it is incontrovertible that the Houses were situated in Singapore. In relation to the second requirement, s 2(1) of the Interpretation Act (Cap 1, 2002 Rev Ed) defines “immovable property” to include:

[L]and, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth[.]

Counsel for the Respondent, Mr Lau Kai Lee submitted that the Houses were immovable property since they were terrace houses that had to be demolished for the Land to be redeveloped and as such were...