Pan United Marine Ltd v Chief Assessor

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Lee Seiu Kin J
• Judgment Date: 08 February 2007
• Neutral Citation: [2007] SGHC 21
• Citation: [2007] SGHC 21
• Defendant Counsel: Julia Mohamed (Inland Revenue Authority of Singapore)
• Plaintiff Counsel: Ong Sim Ho (Ong Sim Ho)
• Published date: 13 February 2007
• Docket Number: Originating Motion No 47 of 2004
• Date: 08 February 2007
• Subject Matter: "Building",Sole access to floating dry docks by ramp from property,Section 2 Property Tax Act (Cap 254, 1997 Rev Ed),Property tax,Floating dry docks not structure erected on land,Annual value,Whether floating dry docks assessable as part of land of property,Words and Phrases,Section 2(1) Property Tax Act (Cap 254, 1997 Rev Ed),Whether definition including floating dry dock,Whether floating dry docks amounting to "buildings" chargeable to property tax,Whether definition including floating dry docks,Building,Assessment,"Machinery",Floating dry docks not located in property but on seabed not within boundaries of property,Revenue Law,"Dock"

8 February 2007 Judgment reserved.

Lee Seiu Kin J:

1 This is an appeal against the decision of the Valuation Review Board (“the Board”) upholding the respondent’s assessment of the annual value of the subject property (“the Property”). The Property, located at 33 Tuas Crescent, comprises five plots of land leased by the appellant from Jurong Town Corporation. Within the Property are a shipyard and a concrete batching plant. The respondent had included in his assessment of annual value under the Property Tax Act (Cap 254, 1997 Rev Ed) (“the Act”), three floating dry docks that were berthed on Tuas Bay adjacent to the Property.

2 The Board had dismissed the appellant’s appeal and made the following findings:

(a) the floating dry docks used by the appellant in its business of ship building and repair are “buildings” chargeable to property tax under the Act;

(b) the floating dry docks are to be assessed together with the dry land; and

(c) the floating dry docks did not constitute machinery used for the repair of vessels, and that the floating dry docks, being specifically included within the definition of “building” in s 2 of the Act, could not have been intended by Parliament to be taken out of assessment under s 2(2)(b) of the Act.

3 Before me the appellant contends that the floating dry docks ought not to be included in the assessment of the annual value of the Property.

The facts

4 The background facts are not disputed and the salient ones are as follows:

(a) The three floating dry docks were afloat in Tuas Bay. The appellant had a Temporary Occupation Licence for the use of the seabed for the purpose of keeping the vessels. The first floating dry dock was commissioned around1987, the second in 1992 and the third in 1997. The floating dry docks were facilities used to carry out the business activities of the appellant.

(b) The floating dry docks were hinged to pile-like structures which were permanently fixed to the seabed. They were held in place by means of anchor and anchor chains in the case of one of them, and by clamping collars to mooring pins in the case of the other two. The structures were fully capable of being removed, towed away and reinstated, whether for a short or long distance.

(c) Access to each floating dry dock was by way of a ramp, one end of which was connected to the structure and the other resting on dry land. This ramp permitted workers, material and machinery to get to the structure via the Property. There was no other physical attachment nor connection of each floating dry dock to dry land.

(d) The floating dry docks were used to hold ships for repairs. To get a ship on a floating dry dock, water is first pumped into its tanks to submerge it partially. The ship to be repaired is then led into the submerged vessel. With the ship in position water is then pumped out of the tanks, enabling the vessel to float and lifting the ship in the process.

(e) A conventional dry dock uses a gate to control the water. The gate is first released to allow water to flow above the dock, and the water led in. Thereafter, the gate is closed and water pumped out so that the ship would sit on the base of the dry dock.

(f) A floating dry dock and a conventional dry dock are both used for ship repair. The difference is that the former floats on water while the latter is constructed on land. The advantage of a floating dry dock over a dry dock is that the floating dry dock is cheaper and can be moved away when needed. However, the disadvantage of a floating dry dock is that it cannot take ships beyond a certain size whereas a dry dock can take larger vessels.

(g) The respondent did not assess the foreshore land which was on a Temporary Occupation Licence.

Issues in the appeal

5 The question before me is whether, in the circumstances, the three floating dry docks may be taken into account in the assessment of the annual value of the Property for the purposes of the property tax payable under the Act. This depends on the determination of three issues as follows:

(a) whether the floating dry docks fall within the definition of “building” in s 2(1) of the Act and thus assessable to tax under s 6(1) of the Act;

(b) whether the floating dry docks are machinery for the repair of vessels and hence should be excluded from assessment under s 2(2) of the Act; and

(c) whether the floating dry docks fall to be assessed as part of the land.

Whether the floating dry docks are “buildings” under s 2(1)

6 Section 6(1) of the Act provides that an annual property tax shall be payable upon the annual value of “all houses, buildings, lands and tenements whatsoever included in the Valuation List” [emphasis added]. The Board decided that the floating dry docks fell within the definition of “building” in s 2(1) of the Act. That provision states as follows:

"building" means any structure erected on land and includes any house, hut, shed or similar roofed enclosure, whether used for the purposes of human habitation or otherwise, any slip, dock, wharf, pier, jetty, landing-stage, underground or overground tank for the storage of solids, liquids or gases, and any oil refinery; [emphasis added]

7 The definition has two limbs, viz:

(a) any structure erected on land; and

(b) includes any house, … any slip, dock, wharf, … and any oil refinery.

The first limb is a general criterion: “any structure erected on land”. The second limb is a list of specific items. The first question is whether something that falls within one of the items listed in the second limb must satisfy the criterion under the first limb in order to come within the definition of building. Specifically, on the assumption that a floating dry dock falls within the word “dock” in the second limb, does that alone make it fall within the definition of building? Or must it also satisfy the criterion in the first limb, viz, is it a structure erected on land?

8 This definition was considered by the High Court in Chief Assessor & Comptroller of Property Tax v Van Ommeren Terminal (S) Pte Ltd [1993] 3 SLR 489 (‘Van Ommeren Terminal’). The structures in question were oil storage tanks, each of which had a capacity of 6,000 cubic metres. They were fabricated elsewhere and brought to the site and hoisted onto their locations. The tanks were not affixed to the ground and merely held down by their weight on a base of rock and sand. Each tank could be jacked up for inspection of the base plate and to conduct any repair work. The tanks could be removed to another location by the same process they were brought in. After expounding the general canons of statutory interpretation regarding the use of the terms “means” and “includes”, the court held that the specific items in the second limb extended the scope of the first limb. The learned judge said at [13]:

However, in the definition now under consideration, the legislature has used the words ‘means … and includes’. How should one approach such a definition? In my opinion a plain reading of that definition is surely this. The legislature has defined the word ‘building’ to bear the ordinary sense of ‘any structure erected on land’. But it has also expanded the meaning of that word to encompass those items enumerated after the words ‘and includes’ irrespective of whether those items are structures erected on land. It will be noted that the legislature has used the words ‘and includes’ twice in the definition. With respect, I am unable to agree with the Board that the things enumerated after the words ‘and includes’ are merely examples of structures erected on land. For instance, a pier or jetty is not a structure erected on land. It is a structure erected over the sea or water.

9 Pursuant to s 9A of the Interpretation Act (Cap 1) (1985 Rev Ed), the learned judge examined the second reading speech in 1965 for the amendment of s 2(1) that included the definition of “building”. He found that it supported his interpretation. The learned judge also cited the decision of the Supreme Court of India in Regional Director, Employees' State Insurance Corporation v Highland Coffee Works [1991] 3 SCC 617 which had to consider a similar definition. The Indian Supreme Court held that the words “and includes” in the second limb enlarge the scope encompassed by the first limb.

10 With respect, I fully agree with the reasoning of the court in Van Ommeren Terminal in relation to the definition of “building” in s 2(1) of the Act. Therefore, if the floating dry docks fall within the scope of the word “dock” in the definition then they would be “buildings” for the purpose of s 6(1) of the Act.

11 The next question is whether the floating dry docks fall within the meaning of “dock” in the definition of “building” in s 2(1). The appellant contends that they do not. In support of this, the appellant cited various structural engineering literature in which the term is discussed. Firstly, in my view, the interpretation of “dock” in the Act cannot be restricted to the vocabulary of practitioners of engineering. Parliament must be presumed to intend the ordinary meaning of the word in this instance. There are of course various meanings of the word “dock”, but applying the ejusdem generis principle, it is clear from the surrounding words (“slip, wharf, pier, jetty, landing-stage”) that it is used in the maritime sense. The Oxford English Dictionary defines “dock” (in the maritime sense) as follows:

An artificial basin excavated, built round with masonry, and fitted with flood-gates, into which ships are received for purposes of loading and unloading or for repair.

However, annexed to this definition is the following paragraph:

… dry or graving dock, a narrow basin into which a single vessel is received, and from which the water is then pumped or let out, leaving the vessel dry for the purpose of repair. (Sometimes also used for building ships.) wet dock, a large water-tight enclosure in which the water is maintained at the level of high tide, so that...