BFC Development LLP v Comptroller of Property Tax: Property Tax Refund & Vacancy
BFC Development LLP appealed the Comptroller of Property Tax's decision to deny property tax refunds for its Marina Bay Financial Centre units during the fitting-out period between the Temporary Occupation Permit (TOP) issuance and lease commencement. The Court of Appeal of Singapore, on January 24, 2014, allowed the appeal, holding that the units were 'unoccupied' during the fitting-out period as the appellant did not obtain the beneficial use of the property for which it was intended, namely the collection of rent. The court also clarified the interpretation of the four conditions under Section 8(4) of the Property Tax Act.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Allowed
1.3 Case Type
Tax
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
BFC Development LLP appeals denial of property tax refunds for vacant units during fitting-out. The court allowed the appeal, interpreting 'unoccupied' in the Property Tax Act.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| BFC Development LLP | Appellant, Plaintiff | Limited Liability Partnership | Appeal allowed | Won | Tan Kay Kheng, Novella Chan, Jeremiah Soh |
| Comptroller of Property Tax | Respondent | Government Agency | Appeal dismissed | Lost | Foo Hui Min, Lau Kai Lee, Michelle Chee |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of the Court of Appeal | Yes |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| Andrew Ang | Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tan Kay Kheng | WongPartnership LLP |
| Novella Chan | WongPartnership LLP |
| Jeremiah Soh | WongPartnership LLP |
| Foo Hui Min | Inland Revenue Authority of Singapore (Law Division) |
| Lau Kai Lee | Inland Revenue Authority of Singapore (Law Division) |
| Michelle Chee | Inland Revenue Authority of Singapore (Law Division) |
4. Facts
- BFC Development LLP owns Towers 1 and 2 of Marina Bay Financial Centre.
- The Comptroller of Property Tax initially allowed property tax refunds for the period between TOP issuance and lease commencement.
- The Comptroller later withdrew the refunds for the fitting-out period, arguing the units were not 'unoccupied'.
- Tenants had signed Letters of Offer with rent-free fitting-out periods.
- Tenants conducted fitting-out works during the rent-free period.
- The Appellant sought a Mandatory Order and Declaration for the refunds.
- The Judge dismissed the Appellant’s application.
5. Formal Citations
- BFC Development LLP v Comptroller of Property Tax, Civil Appeal No 171 of 2012, [2014] SGCA 9
- BFC Development LLP v Comptroller of Property Tax, , [2013] 1 SLR 1053
6. Timeline
| Date | Event |
|---|---|
| Temporary Occupation Permit issued for 8 Marina Boulevard | |
| Temporary Occupation Permit issued for 10 Marina Boulevard | |
| Respondent sent letter to Appellant regarding withdrawal of refunds | |
| Respondent sent letter to Appellant regarding withdrawal of refunds | |
| Appellant sought leave to apply for Mandatory Order | |
| Leave granted to Appellant to apply for Mandatory Order | |
| Appellant took out originating summons | |
| Hearing held | |
| Judge dismissed Appellant’s application | |
| Judgment reserved |
7. Legal Issues
- Interpretation of 'Unoccupied' in Property Tax Act
- Outcome: The court held that 'unoccupied' should be construed to mean beneficial use for the purpose for which the property is intended, namely the collection of rent.
- Category: Substantive
- Sub-Issues:
- Beneficial use of property
- Intention to let out property
- Relevance of fitting-out period
- Vacancy Refund Eligibility
- Outcome: The court held that the Appellant met the criteria for entitlement to the vacancy refund under s 8 of the Act.
- Category: Substantive
- Sub-Issues:
- Compliance with conditions under s 8(4) of the Property Tax Act
- Effect of securing a tenant before the start of the lease
- Relevance of rent-free fitting-out period
8. Remedies Sought
- Refund of property tax
- Declaration of entitlement to refund
9. Cause of Actions
- Application for Mandatory Order
- Application for Declaration
10. Practice Areas
- Tax Litigation
- Real Estate Law
11. Industries
- Real Estate
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| BFC Development LLP v Comptroller of Property Tax | High Court | Yes | [2013] 1 SLR 1053 | Singapore | The decision from which this appeal arose. |
| Dorsey James Michael v World Sport Group Pte Ltd | Court of Appeal | Yes | [2013] 3 SLR 354 | Singapore | Cited for the principle that the purposive approach mandated by s 9A of the Interpretation Act takes precedence over common law principles of statutory interpretation. |
| Graysim Holdings Ltd v P & O Property Holdings Ltd | House of Lords | Yes | [1996] 1 AC 329 | England and Wales | Cited to show that the term 'occupation' has no single legal meaning applicable in all circumstances, but is capable of taking on different shades of meaning depending on the purpose for which the term is being used. |
| Ryde on Rating: The Law and Practice | N/A | Yes | Ryde on Rating: The Law and Practice (Butterworth & Co, 13th Ed, 1976) | England and Wales | Cited for the principle that in England, rates are levied on the occupier rather than the owner of property; a property which is unoccupied and/or unused is not subject to rating. |
| London County Council v Wilkins (Valuation Officer) | House of Lords | Yes | [1957] AC 362 | England and Wales | Cited for the definition of 'occupation' under English rating law as that which is actual, exclusive, sufficiently permanent and beneficial. |
| Jones v Mersey Dock and Harbour Board | House of Lords | Yes | (1864) 11 HLC 443 | England and Wales | Cited for the principle that there can be no valid rate unless the occupation be such as to be of value. |
| Arbuckle Smith & Co Ltd v Greenock Corporation | House of Lords | Yes | [1960] 1 AC 813 | Scotland | Cited to illustrate that the making of alterations with the intention of later carrying on a business did not constitute rateable occupation. |
| Poland and anor v Earl of Cadogan | N/A | Yes | Poland and anor v Earl of Cadogan (1980) 40 P & CR 321 | England and Wales | Cited for the question of whether a tenant occupied a house as his residence so as to enable him to acquire the freehold of the house under s 1 of the Leasehold Reform Act 1967 (c 67) (UK). |
| Lee Wah Bank Ltd v The Commissioner of Federal Capital of Kuala Lumpur | N/A | Yes | [1962] 1 MLJ 23 | Malaysia | Cited for the definition of occupation that was tied to a 'sufficient measure of control'. |
| Newcastle City Council v Royal Newcastle Hospital | Privy Council | Yes | [1959] 2 WLR 476 | Australia | Cited for the comment that 'occupation is a matter of fact and only exists where there is a sufficient measure of control to prevent strangers from interfering'. |
| The Queen v The Assessment Committee of St Pancras | N/A | Yes | (1877) 2 QBD 581 | England and Wales | Cited to show that occupation includes possession as its primary element, but it also includes something more. |
| Associated Cinema Properties, Limited v Hampstead Borough Council | English Court of Appeal | Yes | [1944] 1 KB 412 | England and Wales | Cited for the principle that a mere intention to occupy premises on the happening of a future uncertain event, cannot, without more, be regarded as evidence of occupation. |
| Wandsworth LBC v Singh | N/A | Yes | Wandsworth LBC v Singh (1991) 62 P & CR 219 | England and Wales | Cited to show that a public authority was found to be the occupier of an open public space for the purpose of the Landlord and Tenant Act, because it exercised a sufficient degree of physical presence and control on the facts. |
| Lee-Verhulst (Investments) Ltd v Harwood Trust | N/A | Yes | [1972] 3 WLR 772 | England and Wales | Cited to show that the natural and ordinary meaning of 'occupied' in the context of that Act involved an examination into the degree of control exercised by the alleged 'occupier'. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Property Tax Act (Cap 254, 2005 Rev Ed) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) | Singapore |
| Straits Settlement Ordinance of 1913 (No 8 of 1913) | Singapore |
| Municipal Ordinance (Cap 133, 1936 Ed) | Singapore |
| Property Tax Ordinance 1960 (No 72 of 1960) | Singapore |
| Property Tax (Amendment) Ordinance 1963 (No 25 of 1963) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Vacancy refund
- Property tax
- Unoccupied
- Fitting-out period
- Temporary Occupation Permit
- Beneficial use
- Possession Date
- Term Start Date
15.2 Keywords
- Property tax
- Vacancy refund
- Unoccupied property
- Fitting-out period
- Temporary Occupation Permit
- Beneficial use
- Singapore
- Real estate
- Tax law
16. Subjects
- Property Tax
- Vacancy Refund
- Statutory Interpretation
17. Areas of Law
- Property Tax Law
- Tax Law
- Statutory Interpretation