Public Prosecutor v Mu Shen and others

• Jurisdiction: Singapore
• Judge: Lorraine Ho
• Judgment Date: 24 September 2021
• Neutral Citation: [2021] SGMC 66
• Court: Magistrates' Court (Singapore)
• Docket Number: Magistrate’s Summons Case No. MSC-900111-2021, Magistrate’s Summons Case No. MSC-900112-2021, Magistrate’s Summons Case No. MSC-900113-2021, Magistrate’s Summons Case No. MSC-900280-2021
• Year: 2021
• Published date: 30 September 2021
• Hearing Date: 08 September 2021,11 August 2021,03 September 2021,10 September 2021,12 July 2021,02 September 2021
• Plaintiff Counsel: Norman Teo (Inland Revenue Authority of Singapore)
• Defendant Counsel: Murali Pillai SC and Ashley Loh (Rajah & Tann Singapore LLP),Audrey Koo (Populus Law Corporation),Denis Tan (Circular Law Chambers LLP)
• Subject Matter: Criminal Procedure and Sentencing,Sentencing,Stamp Duties Act,Offences,Intention to evade payment of duty
• Citation: [2021] SGMC 66

District Judge Lorraine Ho: Introduction

This is the first case, whether reported or otherwise, where an accused has been charged for intentionally evading the payment of stamp duty under s 62 of the Stamp Duties Act (Cap 312, 2006 Rev Ed) (“SDA”) in the purchase of a property.

In essence, the modus operandi in this case was to backdate the Option to Purchase (“OTP”) from 8 July 2018 to 4 July 2018. This was to avoid paying the Additional Buyer Stamp Duty (“ABSD”) rate which was raised from 10% to 15% for Singapore Citizens buying a third and subsequent residential property from 6 July 2018 onwards. In order to take advantage of the transitional remission where residential properties acquired on or after 6 July 2018 would qualify for the previous lower rate of ABSD at 10%, the OTP for the property must be granted on or before 5 July 2018, unvaried on or before 6 July 2018 and exercised on or before 26 July 2018 or the date of its validity period (whichever was earlier).

The property concerned was a unit located at Sandy Palm Condominium (“the Property”). Four parties were involved in this property transaction. They were the buyers (second and third co-accused), the buyers’ property agent (first co-accused) and the seller’s property agent (fourth co-accused).

The second and third co-accused were charged under s 62(a) of the SDA for executing an instrument, i.e. the OTP, in which all the facts and circumstances were not fully and truly set forth as required by s 5 of the SDA with the intent to evade the payment of duty. They are husband and wife. At the material time and prior to the purchase of the Property, they already owned two other properties, namely a unit at a condominium located at West Coast Crescent and a HDB flat unit located at Strathmore Avenue. Therefore, the increased ABSD rate of 15% would apply to them when they intended to purchase the Property.

The fourth co-accused was charged under s 62(b) of the SDA for, being concerned in the preparation of the OTP for the Property, omitting to set forth truly in the OTP all the facts and circumstances as required by s 5 of the SDA by falsely stating the date on the OTP from 8 July 2018 to 4 July 2018 with the intent to evade payment of duty. The first co-accused was charged under s 62(b) of the SDA read with s 109 of the Penal Code (Cap 224, 2008 Rev Ed) for abetment by instigating the fourth accused to falsely state the date on the OTP with the intent to evade payment of duty.

The first co-accused was the first to plead guilty before me on 12 July 2021. This was followed by the second and third co-accused on 2 September 2021 and thereafter the fourth co-accused on 3 September 2021.

Parties made their respective submissions on sentence on various occasions, namely 11 August, 3, 8 and 10 September 2021. After hearing all parties, I reserved judgment.

Background facts The Charge

The proceeded charge for each of the co-accused reads as follows:

Charge No.	Description of the Charge
MSC-900111-2021 Charge for the First Co-accused, Mu Shen	You, are charged that you, on or about 7th July 2018, in Singapore, did abet by instigation one Loy Thye Wei (NRIC.: SxxxxxxxJ) (“Loy”), to commit an offence under section 62(b) of the Stamp Duties Act (Cap. 312), to wit, by instigating Loy, who was being employed as the property agent of the sellers of the property located at 163 Jalan Loyang Besar, #XXX, Singapore 509413 (the “Property”) and being concerned in the preparation of an instrument, that is the Option to Purchase (the “OTP”) of the Property, with the intent to avoid payment of duty, to omit setting forth truly in the instrument (i.e. the OTP of the Property) the facts and circumstances required by section 5 of the Stamp Duties Act (Cap. 312), by falsely stating the date on the OTP as 4th July 2018 when in fact the OTP was agreed on 8th July 2018 or later, and you have thereby committed an offence under Section 62(b) of the Stamp Duties Act (Cap. 312) read with section 109 of the Penal Code (Cap. 224) and punishable under Section 62 of the Stamp Duties Act (Cap. 312).
MSC-900112-2021 Charge for the Second Co-accused, Daniel Halim	You, are charged that you, on or about 24th July 2018, in Singapore, with the intent to evade payment of duty, did execute an instrument in which all the facts and circumstances are not fully and truly set forth as required by section 5 of the Stamp Duties Act (Cap.312), to wit, by executing the Option to Purchase (the “OTP”) for a property located at 163 Jalan Loyang Besar, #XXX, Singapore 509413 (the “Property”) which had been falsely dated 4th July 2018 when the OTP was in fact agreed on 8th July 2018 or later, and you have thereby committed an offence under Section 62(a) of the Stamp Duties Act (Cap. 312) and punishable under Section 62 of the said Act.
MSC-900113-2021 Charge for the Third Co-accused, Lee Liu Ying	You, are charged that you, on or about 24th July 2018, in Singapore, with the intent to evade payment of duty, did execute an instrument in which all the facts and circumstances are not fully and truly set forth as required by section 5 of the Stamp Duties Act (Cap. 312), to wit, by executing the Option to Purchase (the “OTP”) for a property located at 163 Jalan Loyang Besar, #XXX, Singapore 509413 (the “Property”) which had been falsely dated 4th July 2018 when the OTP was in fact agreed on 8th July 2018 or later, and you have thereby committed an offence under Section 62(a) of the Stamp Duties Act (Cap. 312) and punishable under Section 62 of the said Act.
MSC-900280-2021 Charge for the Fourth Co-accused, Loy Thye Wei	You, are charged that you, on or about 8th July 2018, in Singapore, as the property agent representing the seller one Fung Chi Ho and being concerned in the preparation of an instrument, that is the Option to Purchase (the “OTP”) of the property located at 163 Jalan Loyang Besar, #XXX, Singapore 509413 (the “Property”), with the intent to avoid payment of duty, did omit to set forth truly in the instrument (i.e. the OTP of the Property) the facts and circumstances required by section 5 of the Stamp Duties Act (Cap. 312), to wit, by falsely stating the date on the OTP as 4th July 2018 when in fact the OTP was agreed on 8th July 2018 or later, and you have thereby committed an offence under Section 62(b) of the Stamp Duties Act (Cap. 312) and punishable under Section 62 of the said Act.

Statement of facts

The first co-accused admitted to the Statement of Facts (“SOF”) dated 8 July 2021 without qualification. The second and third co-accused admitted to the joint-SOF dated 25 August 2021 without qualification. The fourth co-accused admitted to the SOF dated 10 August 2021 without qualification.

Investigations revealed that the first viewing of the Property by the second and third co-accused was on 7 July 2018. After the first viewing, the initial offer made by the second and third co-accused for the purchase of the Property was $1,350,000.

Prior to the second viewing, the second and third co-accused represented to the first co-accused that they would only proceed with the transaction if the OTP was backdated to 4 July 2018. This was after a discussion between the second and third co-accused where they agreed that the backdating of the OTP (to save on the 5% in ABSD payable) was necessary because of their cashflow problems. Otherwise, the second and third co-accused would not have had enough cash-on-hand to complete the purchase of the Property as the ABSD had to be paid in cash.

After this discussion, the second and third co-accused instructed the first co-accused to set up the arrangement with the fourth co-accused to backdate the OTP to a date before 6 July 2018.

At the second viewing of the Property on 8 July 2018, the second and third co-accused increased the offer price to $1,380,000 for the Property. The seller, through the fourth co-accused, accepted the revised offer. The increase of $30,000 in the transacted price only resulted in a $1,500 increase in the minimum cash payable (since the minimum cash component for the purchase of private properties is 5% of the transacted price).

In order to afford the initial cash outlay for the purchase of the Property, the only way is to have the ABSD rate at 10% even when they did not qualify since the OTP could only have been granted after 5 July 2018.

As such, the second and third co-accused proceeded ahead to direct the first co-accused to instigate the fourth co-accused to backdate the OTP accordingly. The first co-accused then proposed on behalf of the second and third co-accused to the fourth co-accused to backdate the OTP to 4 July 2018 to avoid paying the higher ABSD rate of 15% that was effective from 6 July 2018 onwards. When doing so to assist the second and third co-accused, the first co-accused knew that the second and third co-accused did not qualify to the transitional remission for the ABSD

To provide a further cloak of legitimacy, the second and third co-accused even went further to wrongfully backdate the cheque issued for the option fee (i.e. 1% deposit of $13,800) to 4 July 2018 to match the date of the backdated OTP to create the appearance that the OTP was granted on 4 July 2018. At any material time, the second and third co-accused did not ask the first co-accused to check with the seller whether he was agreeable to this backdating arrangement.

The fourth co-accused knew that the second and third co-accused had wanted to avail themselves to the transitional remission for the ABSD by backdating the OTP to 4 July 2018. This was even though they did not qualify.

Nonetheless, the fourth co-accused approached the seller’s wife with the above proposal to backdate the OTP. The seller, through his wife, then wanted the fourth co-accused to reassure him that the backdating was “not illegal”. The...