Pan-United Marine v Chief Assessor: Property Tax on Floating Dry Docks

Pan-United Marine Ltd appealed against the Chief Assessor's property tax assessment, disputing the inclusion of three floating dry docks in the annual value of their shipyard. The Court of Appeal of Singapore, with Andrew Phang Boon Leong JA delivering the majority judgment on 20 May 2008, dismissed the appeal, holding that the floating dry docks were 'buildings' under the Property Tax Act and part of the land, thus subject to property tax. Andrew Ang J dissented.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Tax

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The Court of Appeal determined whether floating dry docks are 'buildings' or 'machinery' under the Property Tax Act, impacting property tax assessment.

1.7 Decision Date

19 May 2008

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Chief Assessor	Respondent	Government Agency	Appeal Dismissed	Won	Julia Mohamed of Inland Revenue Authority of Singapore Foo Hui Min of Inland Revenue Authority of Singapore
Pan-United Marine Ltd	Appellant	Corporation	Appeal Dismissed	Lost	Ong Sim Ho of Drew & Napier LLC Yang Shi Yong of Drew & Napier LLC Chng Teck Un Stanley of Drew & Napier LLC

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Ang	Judge	Yes
Andrew Phang Boon Leong	Justice of the Court of Appeal	Yes
V K Rajah	Justice of the Court of Appeal	Yes

4. Counsels

Counsel Name	Organization
Julia Mohamed	Inland Revenue Authority of Singapore
Foo Hui Min	Inland Revenue Authority of Singapore
Ong Sim Ho	Drew & Napier LLC
Yang Shi Yong	Drew & Napier LLC
Chng Teck Un Stanley	Drew & Napier LLC

4. Facts

Pan-United Marine Ltd owns a shipyard and concrete batching plant at 33 Tuas Crescent.
The property comprises five plots of land leased from Jurong Town Corporation.
The Chief Assessor included the cost of three floating dry docks in the property tax assessment.
The floating dry docks are berthed in Tuas Bay and hinged to pile-like structures fixed to the seabed.
Pan-United Marine Ltd has a temporary occupation licence to use the seabed.
The floating dry docks are connected to the property by a ramp.
The floating dry docks are used for ship repair and maintenance.

5. Formal Citations

Pan-United Marine Ltd v Chief Assessor, CA 26/2007, [2008] SGCA 21

6. Timeline

Date	Event
1982-01-01	Three plots of land leased from Jurong Town Corporation
1987-01-01	One floating dry dock commissioned
1991-01-01	Two plots of land leased from Jurong Town Corporation
1992-01-01	One floating dry dock commissioned
1993-01-01	One plot of land leased from Jurong Town Corporation
1993-01-01	Older dock towed away to Batam
1997-01-01	One floating dry dock commissioned
2001-01-01	Chief Assessor assessed the annual value of the Property
2004-10-01	Appeal heard by the Valuation Review Board
2004-11-16	Valuation Review Board dismissed the appeal
2006-11-02	Appeal heard by the High Court
2007-02-08	High Court dismissed the appeal
2007-01-01	Case Number CA 26/2007
2008-05-20	Judgment reserved
2008-05-20	Appeal dismissed

7. Legal Issues

Definition of Building
- Outcome: The court held that the floating dry docks fell within the definition of 'building' under the Property Tax Act.
- Category: Substantive
- Sub-Issues:
  - Interpretation of 'structure erected on land'
  - Inclusion of docks in the definition of building
Part of Land
- Outcome: The court held that the floating dry docks were part of the land for the purposes of property tax.
- Category: Substantive
- Sub-Issues:
  - Application of fixture test
  - Application of enhancement test
Definition of Machinery
- Outcome: The court held that the floating dry docks did not constitute machinery within the meaning of the Property Tax Act.
- Category: Substantive
- Sub-Issues:
  - Interpretation of 'machinery'
  - Dominant function test

8. Remedies Sought

Reduction of Property Tax Assessment

9. Cause of Actions

Property Tax Assessment Dispute

10. Practice Areas

Tax Law
Property Law

11. Industries

Marine
Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Pan United Shipyard Pte Ltd v Chief Assessor	Valuation Review Board	Yes	[2006] SGVRB 1	Singapore	Cited as the decision of the Valuation Review Board that was appealed to the High Court.
Pan United Marine Ltd v Chief Assessor	High Court	Yes	[2007] 2 SLR 633	Singapore	Cited as the High Court decision that was appealed to the Court of Appeal.
McAlister Developments Ltd v Chief Assessor	Singapore Valuation Review Board	Yes	[1969] 1 MLJ xlv	Singapore	Cited to support the point that a lessee is deemed to be the owner of the property for the purpose of assessing annual value.
Yat Yuen Hong Co Pte Ltd v Chief Assessor	Singapore Valuation Review Board	Yes	[1959-1986] SPTC 135	Singapore	Cited to support the interpretation of the definition of 'building' in the Property Tax Act.
Chief Assessor & Comptroller of Property Tax v Van Ommeren Terminal (S) Pte Ltd	High Court	Yes	[1993] 3 SLR 489	Singapore	Cited for the interpretation of the definition of 'building' in the Property Tax Act and the distinction between 'means' and 'includes'.
The Shell Company of the Federation of Malaya Ltd v Commissioner of the Federal Capital of Kuala Lumpur	High Court	Yes	[1964] MLJ 302	Malaysia	Cited in relation to whether a structure is part of the land.
Holland v Hodgson	Court of Common Pleas	Yes	(1872) LR 7 CP 328	England and Wales	Cited for the fixture test to determine whether an item is part of the land.
Wiltshear v Cottrell	Court of Queen's Bench	Yes	(1853) 1 El & Bl 674; 118 ER 589	England and Wales	Cited in relation to the fixture test.
D’Eyncourt v Gregory	Court of Chancery	Yes	(1866) LR 3 Eq 382	England and Wales	Cited in relation to the fixture test.
Hamp v Bygrave	High Court	Yes	(1983) 266 EG 720	England and Wales	Cited for the principles relating to the fixture test.
Re de Falbe, Ward v Taylor	Court of Appeal	Yes	[1901] 1 Ch 523	England and Wales	Cited in relation to the fixture test.
Leigh v Taylor	House of Lords	Yes	[1902] AC 157	England and Wales	Cited in relation to the fixture test.
London County Council v Wilkins	House of Lords	Yes	[1957] AC 362	England and Wales	Cited for the enhancement test.
Field Place Caravan Park Ltd v Harding	Court of Appeal	Yes	[1966] 2 QB 484	England and Wales	Cited for the enhancement test.
Rudd v Cinderella Rockerfellas Ltd	Court of Appeal	Yes	[2003] 1 WLR 2423	England and Wales	Cited for the enhancement test.
Yiu Lian Machinery Repairing Works Ltd v Commissioner of Rating and Valuation	Hong Kong Lands Tribunal	Yes	[1982] HKC 55	Hong Kong	Cited in relation to a similar fact situation regarding floating dry docks.
Comr of Rating and Valuation v Yiu Lian Machinery Repairing Works Ltd	Hong Kong Court of Appeal	Yes	[1985] 2 HKC 517	Hong Kong	Cited in relation to a similar fact situation regarding floating dry docks.
Dawkins v Royal Leamington Spa Corporation and Warwickshire County Council	N/A	Yes	(1961) 8 RRC 241	England and Wales	Cited for explaining the contractor's test method.
BP (Singapore) Ltd v Chief Assessor	Board	Yes	[1959-1986] SPTC 86	Singapore	Cited for the proposition that expenses incurred on adjacent land can be included in the assessment.
Mayor, Aldermen, and Citizens of Liverpool v Assessment Committee of Llanfyllin Union and Overseers of Llanwddyn	Court of Appeal	Yes	[1899] 2 QB 14	England and Wales	Cited in the BP case regarding the contractor's method of assessment.
Ryan Industrial Fuels Ltd v Morgan	N/A	Yes	[1965] 1 WLR 1347	England and Wales	Cited as a case that lauded the Wilkins decision.
Floatels (UK) Ltd v Perrin	N/A	Yes	[1995] RA 326	England and Wales	Cited as a case that lauded the Wilkins decision.
Gebrueder Buehler AG v Chi Man Kwong Peter	Court of Appeal	Yes	[1988] SLR 24	Singapore	Cited as a case that followed Holland v Hodgson.
People’s Park Chinatown Development Pte Ltd v Schindler Lifts (S) Pte Ltd	Court of Appeal	Yes	[1993] 1 SLR 591	Singapore	Cited as a case that followed Holland v Hodgson.
First DCS Pte Ltd v Chief Assessor	N/A	Yes	[2007] 3 SLR 326	Singapore	Cited for the interpretation of Section 2(2) of the Property Tax Act.
Chief Assessor v First DCS Pte Ltd	Court of Appeal	Yes	[2008] 2 SLR 724	Singapore	Cited for the interpretation of Section 2(2) of the Property Tax Act.
Inland Revenue Commissioners v Barclay, Curle & Co Ltd	House of Lords	Yes	[1969] 1 WLR 675	Scotland	Cited for the analysis that a dry dock is similar in function to a machine.
Commissioners of Inland Revenue v Barclay, Curle & Co Ltd	Special Commissioners	Yes	(1968) 45 TC 221	Scotland	Cited for the Special Commissioners' analysis of the function of a dry dock.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Property Tax Act (Cap 254, 2005 Rev Ed)	Singapore
Property Tax Act (Cap 254, 1997 Rev Ed) s 2(1)	Singapore
Property Tax Act (Cap 254, 1997 Rev Ed) s 2(2)	Singapore
Property Tax Act (Cap 254, 1997 Rev Ed) s 2(8)	Singapore
Property Tax Act (Cap 254, 1997 Rev Ed) s 6(1)	Singapore
Property Tax Ordinance (Ord 72 of 1960)	Singapore
Property Tax (Amendment) Act 1965 (Act 24 of 1965) s 2(b)	Singapore
Revised Edition of the Laws Act (Cap 275, 1995 Rev Ed) s 4(1)	Singapore
Interpretation Act (Cap 1, 2002 Rev Ed) s 2(1)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Floating Dry Docks
Property Tax
Annual Value
Buildings
Machinery
Fixture Test
Enhancement Test
Contractor's Test
Jurong Town Corporation
Temporary Occupation Licence

15.2 Keywords

Property Tax
Floating Dry Docks
Singapore
Chief Assessor
Revenue Law
Tax Assessment

17. Areas of Law

Area Name	Relevance Score
Revenue Law	95
Property Law	70

16. Subjects

Property Tax
Revenue Law
Tax Assessment