SUBSTANTIVE LEGITIMATE EXPECTATION IN SINGAPORE ADMINISTRATIVE LAW

• Published date: 01 December 2014
• Author: Chen Zhida LLB (Hons) (National University of Singapore), LLM (New York University); Justices' Law Clerk, Supreme Court of Singapore.
• Date: 01 December 2014

Case Note

Chiu Teng @ Kallang Pte Ltd v Singapore Land Authority [2013] SGHC 262

The issue of whether substantive legitimate expectation should be protected is a complex one. Other jurisdictions have arrived at different outcomes based on a myriad of reasoning. This case note examines the justifications for recognising substantive legitimate expectation and considers some potential issues that might arise in future cases.

I. Introduction

1 The doctrine of substantive legitimate expectation has been accepted by the High Court in Chiu Teng @ Kallang Pte Ltd v Singapore Land Authority1 (“Chiu Teng”) as part of Singapore law. This decision comes as a surprise for many, given that there has been reticence in the Singapore courts towards English developments in administrative law where the reasoning has been influenced by European Union (“EU”) law.2 There were serious doubts on whether the doctrine formed part of Singapore law prior to the decision.3

2 This case note will examine the justifications for recognising the doctrine of substantive legitimate expectation in Singapore and identify some aspects of the requirements laid out in Chiu Teng which might deserve greater attention in future cases.

II. Brief facts and decision in Chiu Teng

3 In Chiu Teng, the applicant is a property developer which had acquired two adjoining plots of state land for the purpose of redevelopment. To ensure that state land is used in line with the prevailing land policy, state leases would usually specify the permissible use of the land under the lease and the maximum gross floor area for the said permissible use. This is done by including a clause in the state lease which would stipulate that a differential premium (“DP”) is payable if there is a change in the use or an increase in the intensity of use beyond the permissible amount.

4 The respondent is the Singapore Land Authority (“SLA”), the authority in charge of assessing the DP payable for the lifting of the title restrictions for state land. In relation to this, SLA published two circulars and provided information on its website. The first circular, published in 2000, stated that, inter alia, SLA had “implemented a transparent system of determination of [DP]” and this is meant to “provide greater certainty to landowners who will now be able to compute the DP payable themselves” [emphasis added].4 In particular, it stated that the “determination of DP will be based on the published Table of Development Charges (DC) rates” unless it does not fall within any of the Use Groups in the Table of Rates or if the application does not have a valid Provisional Planning Permission.5 The second circular, published in 2007, was substantially similar to the first circular. The SLA website, as accessed on 20 January 2011, reflected similar information. However, it also showed that landowners/developers who were not satisfied with the DP payable based on the Table of Rates could write in to appeal for a spot valuation. The Terms of Use on the SLA website included a widely drafted disclaimer of representations or warranties.6

5 On or around 25 January 2011, the applicant applied to SLA to lift the title restrictions on the two plots of land for the purposes of redevelopment. On 29 November 2011, the SLA informed that “[DP] equal to 100% of the enhancement to land value as assessed by the Chief Valuer will be levied for the lifting of title restrictions”.7 The DP payable was assessed to be $44,067,828.23. This was significantly higher than the DP payable based on the Table of Rates. SLA explained that the DP payable was determined by the Chief Valuer and the Table of Rates was not adopted in determining the DP.8 It was subsequently clarified that as the two plots of land were “different from conventional

leasehold sites” and were “formerly directly alienated to the former owner instead of through competitive tender”, the private sector lessees would be required to pay the DP “based on the full difference (i.e. 100%) between the land values based on the proposed and original use/intensity, if allowed”.9

6 Apart from the preliminary issues of time-bar and prematurity, the two main issues identified by the court were as follows:

(a) Was the SLA's decision to assess the DP through a spot valuation instead of abiding by the Table of Rates irrational and/or unreasonable?

(b) Should the doctrine of substantive legitimate expectation be recognised in Singapore law? If so, could the applicant avail itself of this doctrine?

This case note will focus on the second issue.

7 On the first issue, Tay Yong Kwang J observed that there were three ways of characterising the SLA's allegedly unreasonable conduct. However, none of the three characterisations would satisfy the test of Wednesbury unreasonableness. On the argument that the SLA had acted unreasonably in neglecting to take into account the applicant's legitimate expectation that the DP would be assessed based on the Table of Rates, Tay J considered that it “conflates the doctrine of substantive legitimate expectation with Wednesbury unreasonableness”.10 Hence, this point was addressed under the issue of substantive legitimate expectation.

8 On the second issue, Tay J accepted that the doctrine of legitimate expectation should be recognised as a “stand-alone head of judicial review” and “substantive relief should be granted under the doctrine subject to certain safeguards”.11 He considered that it was not inconsistent with the separation of powers to protect substantive legitimate expectation.12 Further, he explained that the expectation and reliance interests of individuals (which are protected under private law in the form of contract and estoppel) should be protected under public law, subject to the overriding public interest.13 He also held that there is “no difference in principle” between procedural and substantive legitimate expectations, and the reasons for protecting procedural

legitimate expectation apply to substantive legitimate expectation as well.14 There may be practical difficulties in distinguishing them.15

III. Justifying the doctrine of substantive legitimate expectation

A. The doctrine of substantive legitimate expectation does not unduly fetter administrative discretion

9 A perusal of the relevant literature reveals that one of the common objections against substantive legitimate expectation is that it fetters administrative discretion.16 Yet, this was not explicitly addressed in Chiu Teng. It is an established principle of administrative law that the decision-maker cannot fetter its discretion,17 as it would be considered a failure to exercise the power vested in the decision-maker.18 The rationale is that the public authority must be free to change its position in light of new circumstances. This difficulty does not arise in relation to procedural legitimate expectation, which merely requires that the public authority gives effect to the expectation of procedural fairness in the decision-making process19

10 The common response to the fettering of discretion argument is that administrative law is, in addition to the principle of legality, also concerned with the principle of legal certainty.20 As Craig pithily noted,

“[l]egal certainty is expressive of the individual's perspective”, while “legality, as manifested through the non-fettering doctrine, captures the needs of the public body to develop policy”.21 The principle of legal certainty reflects the expectation and reliance interest of the individual in such cases. One may also argue that the principle of legal certainty, which is also an aspect of the rule of law, should be a relevant consideration in judicial review.22

11 The “need to check against inconsistent treatment” (ie, the principle of legal certainty) must be balanced against the “undesirable effects of excessively fettering administrative discretion” (ie, the principle of legality).23 In Chiu Teng, the balance is achieved, albeit implicitly, by giving priority to the principle of legal certainty. Unless the public authority can show that the change was necessitated by the “public interest”,24 it should not be entitled to blow hot and cold and thwart the expectation and reliance interest of the individuals. Contrariwise, the court must bear in mind that “[i]f there is a public interest which overrides the expectation, then the expectation ought not to be given effect to”.25 It follows that administrative discretion would not be unduly fettered and the public authorities would not be hindered from acting in public interest.

B. The doctrine of legitimate expectation upholds trust in public administration

12 The importance of trust in public administration explains why legitimate expectations ought to be protected in Singapore. According to Forsyth, legitimate expectations must be upheld as they are “fundamental to good government” and “[p] ublic trust in the government should not be left unprotected” [emphasis added].26 This seems to resonate with the governmental ethos in Singapore.27 It must be an integral aspect of the concept of a “government by honourable men (junzi)”28 who have the trust and respect of the population that they do not freely renege on their undertaking to the public.29 Indeed, some support can be garnered from the case of Lee Hsien Loong v Singapore Democratic Party, where the High Court accepted (in the context of political defamation) that “human proclivity is such that people are apt to listen to those whom they trust” and that in the words of Isocrates, “the stronger a man's desire to persuade his hearers, the more zealously will he strive to be honourable and to have the esteem of his fellow- citizens”.30 The protection of legitimate expectation in administrative law would strengthen the “reciprocal trust between the citizens and the authorities” and may assuage any adversarial feelings towards the public authorities, thereby increasing the citizens'...