Singapore property developer fails in judicial review bid over differential premium

[princess_morbucks]

http://www.straitstimes.com/breaking-news/money/story/singapore-property-developer-fails-judicial-review-bid-over-differential-p

By Ian Poh

Property developer Chiu Teng @ Kallang has failed in its High Court bid to reduce the amount it owes the Government for a mixed-use site in Kallang.
The dispute concerns a difference in valuation of about $30 million.
Chiu Teng had calculated the differential premium for two adjacent plots it had acquired in 2010 to be more than $11 million. It used a table containing a "snapshot of rates" based on past prices for its calculation.
But the Singapore Land Authority (SLA) calculated the premium to be in excess of $40 million, based on a "spot valuation" or an assessment of the land's value at the given time.

[reporter2]

http://www.straitstimes.com/archive/tuesday/premium/money/story/developer-fails-judicial-review-bid-20131203

Developer fails in judicial review bid

Published on Dec 03, 2013

By Ian Poh


PROPERTY developer Chiu Teng @ Kallang has failed in its High Court bid to reduce the amount it owes the Government over the development of a mixed-use site in Kallang.

The dispute concerns a difference in valuation of about $30 million.

Chiu Teng had calculated the differential premium (DP) for two adjacent plots it had acquired in 2010 to be more than $11 million.

The developer used a table containing a "snapshot of rates" based on past prices for its calculation.

But the Singapore Land Authority (SLA) calculated the DP to be in excess of $40 million, based on a "spot valuation" or an assessment of the land's value at the given time.

The premium is charged when a developer changes the use of the land or exceeds its maximum gross floor area.

The development involved in Chiu Teng's case is CT Hub at the junction of Kallang Avenue and Kallang Bahru, which was completed last year.

In dismissing Chiu Teng's application for judicial review of the SLA decision, Justice Tay Yong Kwang held that the developer ought to have known the DP would not be assessed according to the table.

The judge said it had acted unreasonably in relying solely on two published circulars and the SLA's website, which carries a wide disclaimer over its contents.

"As an experienced property developer going into a multi- million-dollar transaction, it was therefore not reasonable for the applicant to have relied solely on the SLA's publications," said the judgment grounds released yesterday.

"It had many professional advisers and could easily have checked with the SLA on what the DP would be if it decided to buy the land and embark on its redevelopment plans."

Justice Tay noted that the SLA had made clear in its correspondence with Chiu Teng that the sum was assessed without reference to the Table of Development Charge Rates, which is published by the Urban Redevelopment Authority.

Land leased from the State, as in this case, typically has to be developed for permitted uses and to a maximum gross floor area.

This is to ensure the site is developed in line with land policy. But changes, such as an increase in the floor area, can be made with the payment of a DP.

Justice Tay also ordered Chiu Teng to pay the costs incurred by both the SLA and the Attorney-General's Chambers, which was not party to the action but made separate submissions at the hearing.

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