Singapore: Are Long-Term Leases That Are Not In Registrable Form In Breach Of The Planning Act (Cap 232)?

A case study of Golden Village Multiplex Pte Ltd v Marina Centre Holdings Pte Ltd [2001] 2 Sing. L.R. (R.) 450

Under the Planning Act (Cap 232), leases of certain tenure (taking into consideration their renewal terms, if any) may constitute a subdivision for which subdivision permission is required.

This issue was considered and analysed in detail in the seminar case of Golden Village Multiplex Pte Ltd v Marina Centre Holdings Pte Ltd [2001] 2 Sing. L.R. (R.) 450 (Golden Village).

In the Golden Village case, Golden Village Multiplex Pte Ltd entered into a non-registrable lease for a term of 15 years (Golden Village Lease) with Marina Centre Holdings Pte Ltd. One of the key issues before the High Court was whether, by virtue of its tenure being more than seven years, the lease was in breach of the Planning Act (Cap. 232, 1990 Rev. Ed. Sing.) (the 1990 Planning Act)1 as it constituted a subdivision of the premises from the rest of the building without complying with the requirement for subdivision under the 1990 Planning Act, which was then prevailing.

The relevant provisions under the 1990 Planning Act are Section 2(2) and Section 10(3)(a).

An extract of both provisions are as follows:

"Interpretation
2.—(2) For the purposes of this Act, a person is said to subdivide land if, by any deed or instrument, he conveys, assigns, demises or otherwise disposes of any part of the land in such a manner that the part so disposed of becomes capable of being registered under the Registration of Deeds Act or in the case of registered land being included in a separate folio of the land-register under the Land Titles Act, and "subdivide" and "subdivision" shall be construed accordingly:

Provided that a lease for a period not exceeding 7 years without the option of renewal or purchase shall not be deemed to be a disposal with the meaning of this definition."

"Restriction upon development or subdivision of land
10.—(3) No person shall subdivide any land unless —
(a) he has obtained the written permission of the competent authority, and a copy of his written permission has been forwarded by the competent authority to the Collector together with a plan of the permitted subdivision on which dimensions of all lots, widths of streets and backlanes and such other particulars as the competent authority may consider necessary are shown; ..."

In determining whether the Golden Village Lease was in breach of Section 10(3)(a) of the 1990 Planning Act, the High Court considered Sections 51(1), 51(2) and 165(1)(a) of the Land Titles Act (Cap. 157, 1994 Rev. Ed. Sing.) ("the 1994 LTA"), which was then prevailing.

An extract of the provisions are as follows:

"Approved forms
51.—(1) The forms from time to time approved by the Registrar shall be used for all instruments intended to affect registered land.

(2) The Registrar may register any instrument containing departures from an approved form and the instrument shall be deemed to be in a form approved by the Registrar."

"Subdivision of registered land
15.—(1) Except as provided in this section, the Registrar shall not register any instrument affecting part of the land in a folio until he is satisfied that —
(a) the authority for the time being charged with the duty of controlling or supervising the subdivision of the land has certified that the lawful requirements of that authority relating to subdivision have been complied with; ..."

It was undisputed by the parties in the case that there was no written subdivision permission from the authorities. Nevertheless, the High Court held that there was no breach of Section 10(3)(a) of the 1990 Planning Act because the instrument in question was not capable of being included in a separate folio of the land register under the LTA.

The High Court considered at [114] that since Section 165(1)(a) of the 1994 LTA prohibits the Registrar of Titles from registering the instrument, the instrument was not capable of being included in a separate folio of the land register. Judicial Commissioner Woo Bih Li (as he then was) observed that this was the same interpretation taken in a previous High Court decision of Chin Hwa Trading Pte Ltd v. United Overseas Bank Ltd [1985-1986] Sing. L.R. (R.) 63 at [25]. However, he was of the view that this was not the correct interpretation, because the very failure to obtain the subdivision permission would itself save the lessor from being in breach of the 1990 Planning Act.

Woo JC preferred to base his holding on the fact that the instrument was not in the registrable form. He was of the view that the correct interpretation of Section 2(2) of the 1990 Planning Act is that the same only applies to instruments in a registrable form. Woo JC explained at [122] that an instrument which is not in a registrable form is not one that is "capable of" being included in a separate folio unless and until the registrar exercises his discretion under Section 51(2) of the 1994 LTA to register it, but not before.

Nevertheless, Woo JC explicitly stated that even if this interpretation is incorrect, he would then have adopted the interpretation premised upon Section 165(1)(a) of the 1994 LTA and likewise held that there would be no breach of the 1990 Planning Act.

On appeal, the Court of Appeal in Golden Village Multiplex Pte Ltd v. Marina Centre Holdings Pte Ltd [2002] 1 Sing. L.R. (R.) 169 reached the same conclusion that there was no breach of the 1990 Planning Act. It similarly considered both interpretations, but clearly preferred the interpretation premised upon Section 165(1)(a) of the 1994 LTA.

This is because Section 51(2) of the LTA gives the Registrar of Titles discretion to register an instrument containing departures from the registrable forms, whereas Section 165(1)(a) of the 1994 LTA does not leave the Registrar of Titles with any discretion to register an instrument affecting part of the land in a folio unless subdivision permission has been obtained.

The holding of the Court of Appeal in the Golden Village case was restated as obiter dicta in a more recent High Court case of Pontiac Land Pte Ltd v. P-Zone Services Pte Ltd [2010] 4 Sing. L.R. 111 at [16] and [17]. It therefore remains good law at the time of publication of this article.

Legislative changes to the Planning Act and the Land Titles Act

The prohibition against subdivision of land without written subdivision permission is now contained in Section 12(3) of the Planning Act (Cap. 232, 1998 Rev. Ed. Sing.) (the 1998 Planning Act), which is the version of the statute currently in force.

The definition of "subdivide" under Section 4 of the 1998 Planning Act largely follows that of Section 2(2) the 1990 Planning Act, and although the scope of its proviso has expanded with the passing of the Planning (Amendment) Act 2003, the definition has remained intact up till now.

An extract of the said provisions in the 1998 Planning Act are as follows:

"Meaning of "subdivide"

4.—(1) Subject to this section, a person shall, for the purposes of this Act, be said to subdivide land if, by any deed or instrument, he conveys, assigns, demises or otherwise disposes of any part of the land in such a manner that the part so disposed of becomes capable of being registered under the Registration of Deeds Act (Cap. 269) or, in the case of registered land, being included in a separate folio of the land-register under the Land Titles Act (Cap. 157), and "subdivide" and "subdivision" shall be construed accordingly.

(2) Notwithstanding subsection (1), the following leases granted on or after 1st April 1998 shall not be regarded as a disposal of the land or part thereof:

(a) in the case of any development described in Part I of the Third Schedule, the grant of any lease for any unit in the development for a term not exceeding an aggregate of 14 years;

(b) in the case of any development described in Part II of the Third Schedule, the grant of any lease for a building or any part of a building comprised in the development for a term not exceeding an aggregate of 14 years; or

(c) in the case of any other land, the grant of any lease of the whole or part of the land for a term not exceeding an aggregate of 7 years.
..."

"Unauthorised subdivision, development and other works
12.—(3) No person shall without subdivision permission subdivide any land."

As for the Land Titles Act, consequential amendments were made to the legislation in 2004, and Section 165(1)(a) of the 1994 LTA was effectively deleted. However, the Parliamentary Debates did not shed any light on the rationale behind the deletion, and specifically, whether it was triggered by the Golden Village case.

Section 165(1) of the Land Titles Act now reads as follows:

"Subdivision of registered land

165.—(1) Except as provided in this section, the Registrar shall not register any instrument affecting part of the land in a folio until he is satisfied that the boundaries and dimensions of part of the land in a folio described in an instrument are in accordance with the final boundaries and dimensions shown in the plan lodged with and approved by the Chief Surveyor under the Boundaries and Survey Maps Act (Cap. 25)."

On the other hand, Section 51(1) and 51(2) of the Land Titles Act have remained unchanged till this day.

Conclusion

The unexplained removal of Section 165(1)(a) of the 1994 LTA has therefore cast doubt on the Court of Appeal judgment in the Golden Village case.

For long-term leases (i.e. which tenure is greater than the period stipulated under Section 4(2) of the 1998 Planning Act) of part of a land where there are no surveyed boundaries, it appears that the Court of Appeal judgment in the Golden Village case can still be relied on, because the existing Section 165(1) of the Land Titles Act still prevents the Registrar of Titles from effecting registration of such lease instruments. Such leases are therefore not capable of being included in a separate folio of the land-register under the Land Titles Act, and would not constitute "subdivision" for the purposes of the Planning Act. There would thus be no breach of Section 12(3) of the Planning Act.

However, in respect of long-term leases of whole pieces of land (wherein the boundaries and dimensions of such land have been lodged with and approved by the Chief Surveyor as set out in Section 165(1) of the Land Titles Act), it is submitted that legal practitioners can now only fall back on the interpretation put forth by the High Court in the Golden Village case – i.e. an instrument which is not in a registrable form is not "capable of" being included in a separate folio of the land-register under the Land Titles Act until such time when the Registrar of Titles decides to exercise its authority under Section 51(2) of the LTA and registers the long-term leases that deviates from the registrable form.

Footnote

1 Although the case was decided in 2001, which was after the implementation of the 1998 Edition of the Planning Act, it should be noted that the agreement to lease in question was dated 28 February 1995, and the applicable legislation was therefore the 1990 Edition of the Planning Act.

The authors acknowledge and thank Marco Low for his contribution in the writing of this article.

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