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  • Zim Integrated Shipping Services Ltd and others v Dafni Igal and others[2010] 2 SLR 426; [2010] SGHC 8
    relates to can be found in the following observations of Lord Hoffman in OBG v Allan 2008 1 AC 1 OBG at 39 To be liable for inducing breach of contract you must know that you are inducing a breach of contract It is not enough that you know that you are procuring an act which as a matter of law or construction of the contract is a breach You must actually realize that it will have this effect Nor does it matter that you ought reasonably to have done so This proposition is most strikingly illustrated by the decision of this House in British Industrial Plastics Ltd v Ferguson 1940 1 All ER 479 in which the plaintiff s former employee offered the defendant information about one of the plaintiff s secret processes which he as an employee had invented The defendant knew that the employee had a contractual obligation not to reveal trade secrets but held the eccentric opinion that if the process was patentable it would be the exclusive property of the employee He took the information in the honest belief that the employee would not be in breach of contract In the Court of Appeal 1938 4 All ER 504 513 MacKinnon LJ observed tartly that in accepting this evidence the judge had vindicated his honesty at the expense of his intelligence but he and the House of Lords agreed that he could not be held liable for inducing a breach of contract emphasis added It is therefore clear that the plaintiffs must show that the defendant s in question knew that it was procuring a breach of Captain Dafni s Employment Agreement It would not be sufficient merely to show that the acts committed by the defendant had the effect of doing so ii The tort of inducing a breach of fiduciary duties and statutory duties 20 The plaintiffs also sought to hold Starship Carriers liable as an accessory for Captain Dafni s breach of fiduciary duties They did not cite any authorities that expressly recognised the existence of such a tort Instead they relied on an article by Lee Eng Beng A Perspective on the Economic Torts 1996 SJLS 482 at 482 483 the Article whereby the learned author argued While detailed rules have evolved with regard to each of the economic torts that is interference with contract intimidation conspiracy and unlawful interference with trade or business the same cannot be said with respect to the founding of a logical structure for the area as a whole Still less has there been any judicial consideration of the relationship between these torts and the incidence of liability in analogous situations in other areas of the law It is tempting to conclude that the economic torts are nothing more than disparate miscellany which are usually grouped together for reasons of convenience or neatness Indeed such a conclusion is not difficult to justify on the existing state of the authorities The adoption of such a compartmentalised approach however ignores the undeniable congruence of policy concerns underlying the purpose and operation of this group of torts which are admittedly sometimes obscured by inconsistent and anomalous rules The factual similarities in the contexts in which they are usually invoked are also too obvious to brush away emphasis added 21 The learned author went on to opine at 499 5 Knowing implication in breach of trust or fiduciary duty In equity certain principles of liability bear a strong resemblance to the tort of interference with contractual and other rights and the question of whether these principles should be amalgamated with the corresponding tortious principles merits attention The equitable wrong of being knowingly implicated in a breach of trust or fiduciary duty is one example A defendant who has dishonestly assisted in a breach of trust or fiduciary duty is liable to account to the beneficiary for his loss irrespective of whether the assisted person also acted dishonestly or fraudulently The position should be the same if he takes the initiative and knowingly induces the breach of trust or fiduciary duty Similarly a defendant is liable for procuring a breach of an equitable obligation to account owed to the plaintiff by his agent Putting aside the distinctive terminology of the equitable jurisdiction it is evident that the principle of liability in all these equitable wrongs is fundamentally the same as in the tort of interference with rights The similarity between the content of the two principles as well as the context in which their application would usually arise is well illustrated in Watson v Dolmark Industries Ltd The defendant in this case was the substantial proprietor of a company which had been granted manufacturing and marketing rights by the plaintiff for a certain type of plastic storage tray in consideration for royalties calculated by reference to the number of trays manufactured The defendant acting on behalf of the company dishonestly under declared to the plaintiff the number of trays produced by the company in order to avoid paying the full royalties to which the plaintiff would have been entitled The company then used the money saved to manufacture and sell a similar product On facts such as these it is probable that an action for interference with rights would have succeeded against the defendant for the amount of royalties which had been lost by the plaintiff As it turned out however the defendant s liability was argued and decided on the basis of knowing implication in a breach of fiduciary duty Keeping the two principles artificially apart by labelling them tortious and equitable cannot be good for the development of the law The concept of interference in the tort is by now probably wide enough to encompass all forms knowing implication in a breach of trust or fiduciary duty Further a person s rights under a trust or pursuant to a fiduciary duty owed to him are clearly capable of being protected under the tortious principles As Lord Hoffman writing extra judicially points out fiduciary obligations and contractual obligations are merely species of obligations and it should be possible to assimilate or at least to reconcile the two forms of liability The proposition that there is no tort known as inducing a breach of trust or presumably also a breach of fiduciary duty may have to be re considered in the not too distant future emphasis added in bold italics 22 The learned author s argument that there is no reason for the distinction in accessory liability between equity and tort law is on its face attractive After all given that both forms of accessory liability really stem generally from the law of obligations albeit developed under very different circumstances as one developed in the realm of equity and the other under the common law one may argue that there is no good reason for maintaining such a distinction see Philip Sales The Tort of Conspiracy and Civil Secondary Liability 49 1990 CLJ 491 at 508 23 From a policy perspective it would be necessary to consider whether the current forms of accessory liability that have developed in equity viz dishonest assistance and knowing receipt are sufficient to maintain the sanctity of fiduciary relationships vis à vis third parties or whether it is necessary for the law to expand its protection for these vulnerable beneficiaries Even if such an expansion is necessary or warranted a question will then arise as to whether such an expansion should take place by relaxing the requirements for knowing receipt and or dishonest assistance or by introducing tortious liability for accessory assistance see in this respect the decision of the UK Court of Appeal in Metall und Rohstoff AG v Donaldson Lufkin Jenrette Inc 1990 1 QB 391 at 481 24 From a legal perspective there may also be conceptual difficulties that would require adjustments into other areas of law see Clerk Lindsell on Tort Sweet Maxwell 19th Ed 2006 at para 25 39 Further there may be a possible issue relating to remedies For the tort of inducing a breach of contract it is said that the claimant may recover in respect of loss of business caused by non performance of the contract subject to the rules of remoteness Clerk Lindsell on Tort at para 25 39 However a breach of fiduciary duty does not necessarily result in a loss see the facts of Regal Hastings Ltd v Gulliver 1967 2 AC 134 In addition it is said that the tort of inducing a breach of contract arises because contractual rights are treated as a species of property deserving of special protection by the imposition of secondary liability on the person who procures the party that breaks the contract to do so OBG at 32 It is not clear whether fiduciary rights belong within the same class of property and are deserving of the same special protection as a result 25 The Court of Appeal in Canadian Pacific Bermuda Ltd v Nederkoorn Pte Ltd 1999 1 SLR R 628 considered an argument raised by the appellants that the tort of interference with contractual relations had been extended to procuring or inducing a fiduciary duty citing The Prudential Assurance Co Ltd v Lorenz 1971 11 KIR 78 in support The Court of Appeal dismissed that argument on the ground that the case did not stand for the proposition stated but did not authoritatively decide whether or not such a tort existed 26 On the facts of this case I find that no breach of the primary fiduciary duties as alleged by the plaintiffs have been proven As such it is not necessary for me to decide whether the law of tort should be expanded to recognise the inducement of a breach of fiduciary duty as being actionable 27 As for the tort of inducing a breach of statutory duty this tort appears to be recognised by the UK courts see Clerk Lindsell on Torts 24 supra at para 25 36 However it must be shown that the provision in question gives rise to a civil remedy Clerk Lindsell on Torts at para 25 36 Here the provision in question is s 157 of the CA and s 157 2 entitles the company to bring an action against the director for any profit made by him or damage suffered by the company as a result of any breach of the section It would therefore appear that the plaintiffs can proceed based on the tort of inducing a breach of statutory duty I will now turn to consider the individual allegations levelled by the plaintiffs against the defendants The issues i The rebates and waivers 28 The plaintiffs pleaded case was that Starship Agencies had breached its duty as agent in failing to account for the monies which it had received from Westports belonging to Seth Shipping It was alleged that Captain Dafni as managing director of GSL and Area President of Asia for Zim Shipping had negotiated and entered into an agreement with Westports in relation to the tariffs to be paid by the Zim Shipping or GSL for Zim Shipping s container ships The plaintiffs alleged that Westports had agreed to grant the following concessions to the Principals or GSL a a yearly incentive rebate of 5 on port tariffs paid by the Principals or GSL for all outbound containers exported from Westports from 2000 to the first half of 2005 Outbound Rebates b a yearly incentive rebate on port tariffs paid by the Principals or GSL for all containers transhipped through Westports from 2000 to 2001 Transhipment Rebates c waivers and refunds on the yearly charges paid by the Principals or GSL for storage charges and special request charges from 2003 to 2005 Charge Waivers 29 According to the plaintiffs the above Outbound Rebates totalling RM1 477 474 Transhipment Rebates totalling RM2 921 935 and Charge Waivers totalling RM1 231 239 together the rebates and waivers were received by Starship Agencies but not passed on to GSL Further it was pleaded that Captain Dafni was in breach of his fiduciary duties when as managing director of GSL and Area President of the Principals he failed to disclose the rebates and waivers to the management of the Principals or GSL or to ensure that the rebates and waivers were paid to and received by the Principals or GSL Further it was alleged that Captain Dafni had breached his fiduciary duties as the Area President of the Principals in Asia in failing to take action to terminate Starship Agencies as sub agent of the Principals when he discovered that Starship Agencies had wrongfully retained the rebates and waivers 30 Two main issues arose for consideration pursuant to the plaintiffs allegations a whether the rebates and waivers were disclosed to the Principals or GSL and b whether the rebates and waivers were received by Starship Agencies but not passed onto GSL 31 Dan Hoffman Hoffman who took over as Area President for Asia of Zim Shipping in May 2006 testified that Captain Dafni had overall responsibility for the negotiations of port charges for the vessels of Zim Shipping and Seth Shipping vessels calling at Port Klang and did so negotiate with Westports The plaintiffs relied on a letter dated 4 February 1999 from Westports to Johnny of Star Shipping Agencies informing them of the rates and tariffs for the various services offered by Westports In addition on 23 February 1999 Westports had written to Johnny as follow I refer to recent meetings our confidential letter dated February 4th and several telephone conversations In addition to the terms and conditions as contained in the official tariff and in letter dated February 04th we can extend the following 1 Gold Star to enjoy exemption from service charges for a stock of 100 teus of MT equipment for the initial six months of operation 2 We reaffirm that transhipment cargo charges as per our fax dated February 04th are already discounted by 50 percent 3 Gold Star to enjoy a 5 percent discount on the Terminal Handling Stevedorage charges for local cargo 4 Gold Star line to confirm that they remain committed to the exclusive use of the WestPort terminal within Port Kelang for the service for an initial period of 18 months 32 Hoffman alleged that neither of these two letters sent by Westport the 1999 letters or the terms thereof was disclosed to Zim Shipping or GSL Therefore Zim Shipping GSL and Seth Shipping paid full standard rates for all transhipment cargo outbound cargo and storage charges Hoffman also testified that Captain Dafni was involved in subsequent negotiations with Westports between 2001 and 2005 In 2001 there were a number of letters exchanged between Captain Dafni and representatives of Westports with respect to the tariffs payable by GSL for Westports services These 2001 letters were not copied to Zim Shipping or to anyone else in GSL Eventually on 6 December 2001 Captain Dafni writing on GSL s letterhead wrote to Westports to confirm that GSL had accepted Westports proposal Westports proposal included a term that they would continue to bill GSL as per the tariffs and would from January 2001 onwards pay the difference in the rates in the form of a rebate 33 Further on 31 October 2002 Captain Dafni wrote to Westports without copying anyone else seeking to reduce the rate for handling of MT containers to match the rates offered by PSA though Westports did not agree to Captain Dafni s proposal 34 Schmuel Yoskovitz Yoskovitz who is the current managing director of GSL and the previous financial controller for Zim Shipping in the Asia Pacific region between 2006 and 2008 also testified for the plaintiffs He stated that he was instructed by Hoffman to account for the transactions entered into by GSL and Seth Shipping with Westports He received a reply from Ms Chan Chu Wei Ms Chan of Westports on 30 April 2007 confirming that GSL had been enjoying a 5 incentive rebate yearly for all its local containers laden and empty since its inception with us in 1999 Upon investigation Yoskovitz discovered that GSL Seth Shipping or Star Shipping Agencies did not have copies of the 1999 letters and that they did not have any record of the rebates or discounts referred to in Ms Chan s letter dated 30 April 2007 Hoffman therefore contacted Westports for a statement of accounts for all rebates discounts and benefits to Seth Shipping and or GSL and received an e mail from Lee Mun Tat Lee who was a manager of Westports setting out the rebates and waivers that had allegedly been paid to Starship Agencies Yoskovitz claimed that GSL did not receive the rebates and waivers 35 Lee was a witness for the plaintiffs He provided a record of the relevant documentation purportedly relating to the rebates and waivers including a long list of credit notes prepared between 2000 and 2005 which purportedly reflected the Transhipment Rebates and Charge Waivers given during the period 36 The plaintiffs argued that Captain Dafni and Benedict knew about the 1999 letters sent by Westports see above at 31 and had failed to disclose them to any of the plaintiffs a fact which Captain Dafni denied The defendants raised a preliminary objection that the 1999 letters were inadmissible as evidence as the makers were not called as witnesses In response the plaintiffs argued that s 32 b of the Evidence Act Cap 97 1997 Rev Ed the EA was applicable The provision states Cases in which statement of relevant fact by person who is dead or cannot be found etc is relevant 32 Statements written or verbal of relevant facts made by a person who is dead or who cannot be found or who has become incapable of giving evidence or whose attendance cannot be procured without an amount of delay or expense which under the circumstances of the case appears to the court unreasonable are themselves relevant facts in the following cases or is made in course of business b when the statement was made by such person in the ordinary course of business and in particular when it consists of any entry or memorandum made by him in books kept in the ordinary course of business or in the discharge of professional duty or of an acknowledgment written or signed by him of the receipt of money goods securities or property of any kind or of a document used in commerce written or signed by him or of the date of a letter or other document usually dated written or signed by him 37 However in order to rely on s 32 b of the EA it is incumbent on the plaintiffs to show that the 1999 letters came within the scope of the section and in particular that it was made in the ordinary course of business Syarikat Jenka Sdn Bhd v Abdul Rashid bin Harun 1981 1 MLJ 201 The plaintiffs adduced no evidence whatsoever to show that the 1999 letters had been written in Westports ordinary course of business 38 Even if the 1999 letters were admissible I do not think they assist the plaintiffs case The plaintiffs had argued that Captain Dafni and Benedict knew about the 1999 letters at the material time They relied on three planks to support this contention First the plaintiffs pointed out that Captain Dafni had the authority to negotiate the port charges They highlighted that Captain Dafni had in his defence bragged about negotiating with the Malaysian Ministry of Transport and stated how GSL had expanded under his leadership Further during the 2001 negotiations Captain Dafni did not copy the letters to anyone else and indeed the first letter was initiated by Captain Dafni himself Second the plaintiffs highlighted that in a letter dated 30 August 2001 Captain Dafni had rejected the unnegotiable proposal and stated he would instruct his agents to pay all bills in accordance with the current tariff indicating that Captain Dafni was in full control of the negotiations and had full authority over the agents in Malaysia Third the plaintiffs argued that the defendant s contention that there were no negotiations of any rates in 1999 was untenable In a letter dated 18 October 2001 from Westports it was stated that Westports would maintain the agreement to hold the RM 70 105 until 31 December 2001 making it clear that the negotiations were for the purpose of resisting an increase in the transhipment tariffs It was highly unlikely that the commencement of services to GSL was based solely on an oral assurance given to Johnny Lim without any quotations or documentations The plaintiffs also highlighted that Captain Dafni had in his Further and Better Particulars filed on 18 December 2008 stated that he could not remember what the government subsidised rates were but could during cross examination state that a 50 rebate was given for all transhipment tariffs to all users While Benedict claimed there was a published discount rate he was unable to produce the document even though he said that he had possession of the same 39 Although the 1999 letters referred to meetings and telephone conversations they did not state the parties who had taken part in such discussions The letters were addressed only to Johnny and were neither addressed nor copied to Captain Dafni Neither did the letters allude to Captain Dafni s participation in such discussions Hoffman had admitted that he did not have personal knowledge as to whether Captain Dafni had conducted the negotiations himself in 1999 without informing any other staff member in Zim Shipping and or GSL or whether the 1999 letters had in fact been sent to Johnny Captain Dafni resolutely denied being aware of the 1999 letters at the material time and the plaintiffs did not and could not produce any evidence to contradict him 40 There was also nothing in the evidence which showed that Star Shipping Agencies had accepted the offer stated in the 1999 letters In order to enjoy the discounts stated GSL had to use Westports facilities exclusively for 18 months but there was no evidence that GSL had done so Hoffman did not know whether GSL had accepted the condition imposed or used Westports facilities exclusively for the first 18 months and neither did Yoskovitz On the other hand it was Benedict s unchallenged evidence that GSL had also used North Ports on many occasions There was therefore no evidence that the terms of the 1999 letters were binding on the parties involved 41 Further the 1999 letters only mentioned the giving of discounts and did not speak of providing the rebates which the plaintiffs are now claiming As such even assuming that the 1999 letters were made in the ordinary course of business they did not help to advance the plaintiffs case 42 The plaintiffs also sought to rely on Ms Chan s letter of 30 April 2007 see above at 34 A similar objection was raised by the defendants that this letter was inadmissible as Ms Chan was not called to testify The plaintiffs likewise relied on s 32 b of the EA see above at 36 to contend that the letter was admissible evidence Again the plaintiffs did not adduce any evidence to show that such a letter was made in the ordinary course of business Even if the letter had been made in the ordinary course of business I note that there was considerable doubt as to its accuracy Lee himself believed that there was a mistake in the letter as the 5 incentive rebate was not meant for empty containers Hoffman similarly opined that based on the 1999 letter the discount for local cargo at item 3 in 31 above was not applicable to empty containers Also Ms Chan did not provide any evidence to back up the assertions in her letter Therefore even if it was admissible I would have given little weight to Ms Chan s letter said letter 43 As for the negotiations in 2001 it was not in dispute that Captain Dafni was indeed involved in the negotiations as was clearly borne out by the correspondence between the parties during that period Captain Dafni had clearly informed Zim Shipping and GSL about the new rates that he had negotiated and agreed to with Westports On 7 December 2001 Captain Dafni sent a handwritten fax to various senior personnel of Zim Shipping and GSL in Hong Kong as follow Please be advised that we have concluded our negotiation with Westport Management with new term as follows Current Tariff will remain in force till 31 1 02 New transhipment rate will be applicable as of 1 1 2002 Laden RM 100 20 RM 150 40 MTY RM 85 20 RM 128 40 This tariff will be applicable for 3 years but will be subject to review at each year end and will be adjusted by mutual agreement only if Intra Asia F R show drastic recovery GSL will pay according to official tariff i e Laden RM 140 20 RM 210 40 MTY RM 140 20 RM 210 40 But the difference between the official tariff and our new agreed rate will be off set from each monthly debit note by the way of a rebate emphasis in underline in original emphasis in italics added 44 Hoffman himself agreed during cross examination that Captain Dafni had informed GSL and Zim Shipping about the new rates in 2001 As such the plaintiffs claims that Captain Dafni had been in breach of his fiduciary duties by not disclosing the rebates and waivers to Zim Shipping and or GSL is clearly not made out 45 I turn now to consider whether Starship Agencies had received the rebates and waivers from Westports as alleged by the plaintiffs The plaintiffs evidence on this point came from Yoskovitz and Lee Lee had in his affidavit of evidence in chief AEIC provided a computation of the Outbound Rebates Transhipment Rebates and Charge Waivers purportedly received by Starship Agencies while Yoskovitz testified that the rebates and waivers had not been received by GSL 46 I will first deal with the Transhipment Rebates and the Charge Waivers On the face of the documents which Lee provided it was not clear who had prepared the credit notes purportedly evidencing the Transhipment Rebates and Charge Waivers but it is clear that it was not made by any of the witnesses at trial The plaintiffs again sought to rely on s 32 b of the EA to admit these documents into the evidence and argued that Lee had given unchallenged evidence that those documents were made in the ordinary course of business However I could find nothing in the evidence to support the plaintiffs assertion 47 Be that as it may even if those documents were made in the ordinary course of business I would not have accorded any weight to them None of these credit notes were signed and as I mentioned earlier there was no indication as to who the maker of those credit notes was Apart from the credit notes the plaintiffs did not produce any other document to show that Starship Agencies had received the Transhipment Rebates or the Charge Waivers to the exclusion of GSL The plaintiffs therefore fail in their claim for the Transhipment Rebates and Charge Waivers 48 I will next deal with the Outbound Rebates Benedict did not deny that Starship Agencies received cheque payments from Westports between 2000 and 2006 He appeared to accept that the amounts received corresponded to those pleaded by the plaintiffs His evidence was that the payments were gratuitous incentive payments given to Starship Agencies for its support and patronage and that it had not solicited for such payments As Starship Agencies did not think that the monies were meant for the plaintiffs the amounts were not paid over to them 49 Although Benedict admitted that Starship Agencies had received the monies from Westports amounting to RM1 477 474 he did not admit that the payments were in respect of the Outbound Rebates The plaintiffs bore the burden of proving that those payments received were the Outbound Rebates as pleaded I find that the plaintiffs have not discharged their burden of proof in this respect The only evidence adduced by the plaintiffs came from the exhibits in Lee s AEIC comprising of payment vouchers tables purportedly showing the volume of FCL cargo within the specified time period that were either signed by Ms Chan or one Datuk Tan or unsigned there were also photocopies of cheques that were made out to Starship Agencies Lee had admitted that he became involved in the rebate calculation process only from mid 2004 onwards Therefore the rebates tables and payment vouchers prepared before June 2004 were inadmissible as Lee was not the maker No evidence was adduced to show that the documents were prepared in the ordinary course of business Indeed given that Lee had admitted that such rebates were highly confidential it did not seem to me that such tables and vouchers had been prepared in the ordinary course of business I did not get the impression that it would not be possible to procure the makers of those documents to attend court without unreasonable delay and expense as both Ms Chan and Datuk Tan were still involved in Westports business at the time of the trial As for the rebates tables and payment vouchers prepared after June 2004 Lee had admitted during cross examination that he did not have any personal knowledge about the rebates to GSL and or Zim Shipping as these matters were highly confidential Further I noted that the payment vouchers and tables that were prepared by Westports were internal documents that had not been provided to Starship Agencies for its verification Apart from those documents the plaintiffs did not produce any other documents to show that Starship Agencies had indeed received the Outbound Rebates as pleaded Accordingly the plaintiffs fail in their claim for the rebates and waivers ii Were the depot and trucking charges competitive or inflated 50 The plaintiffs alleged that Starship Agencies as agent for GSL and Star Shipping Agencies had failed to ensure that they would secure the most competitive rates for depot and trucking charges available at the market for freight that was carried on board the vessels of Zim Shipping calling at Port Klang for the period between 2002 and 2005 The plaintiffs alleged that the rates paid by GSL were substantially inflated They also pleaded that Captain Dafni had breached his fiduciary duty as managing director of GSL by failing to ensure that GSL would obtain the most competitive rates for depot and trucking charges for freight carried on board Zim Shipping s vessels calling at Port Klang between 2002 and 2005 The plaintiffs also alleged that Captain Dafni was in breach of his fiduciary duties when as Area President of the Principals he did not take any action to terminate Starship Agencies as a sub agent of the Principals when he knew that Starship Agencies had wrongfully charged GSL or the Principals inflated depot and trucking rates 51 To support their claims the plaintiffs relied primarily on a comparison chart prepared by Simon Whitelaw Whitelaw the managing director of CMA CGM CMA and ANL Malaysia The chart showed the following CMA CGM s rate before June 2006 ZIM s rates before June 2006 Port Klang Trucking Westport to Wesport depot RM 20 35 80 RM 40 70 160 Trucking Westport to Northport depot RM 20 65 80 RM 40 130 160 Lif on lift off RM 20 10 17 RM 40 20 34 Storage Daily charge RM 20 1 1 7 RM 40 2 3 4 Storage Free Days 10 3 The chart also provided a similar comparison in respect of services at Penang and Pasir Gudang In addition the plaintiffs also relied on Ayal Anat s evidence that when GSL and Seth Shipping renegotiated the rates on their own after 2006 they managed to get significantly lower rates even without much bargaining Ayal Anat is the Logistics Director for Zim Shipping in the Asia Pacific region and has held on to this position since February 2004 The plaintiffs further contended that Starship Agencies claim that it had given all the quotations in this respect to GSL for approval and that GSL s staff had made regular visits and audits were untenable especially since no quotations had been provided 52 The plaintiffs claim was that inflated trucking and depot charges had been paid for freight carried on board Zim Shipping s vessels calling at Port Klang between 2002 and 2005 However Hoffman himself had admitted that Zim Shipping s vessels did not call at Port Klang during this period In addition although the plaintiffs claim related to the period between 2002 and 2005 none of the witnesses gave evidence on what the prevailing market rates were during that period Hoffman and Ayal Anat agreed that they did not have any personal knowledge on this issue As for Whitelaw s chart it only related to the rates payable in the first six months of 2006 In addition there was no evidence that the rates CMA paid in 2006 were the prevailing market rates at the material time Indeed given the differences in the size of the two companies and the volume of their respective operations at Port Klang it is questionable whether the rates obtained by CMA the world s third largest container shipping company as reflected in the chart could have been obtained by other smaller players in the same market Whitelaw himself admitted that there were substantial differences between the size of the operations of CMA and Zim Shipping and added that the rates obtained by CMA were probably the best rates available in the market Additionally Whitelaw did not provide any documentation to substantiate the rates that CMA was purportedly paying as shown in the chart Neither did Zim Shipping provide any proof to substantiate its claim that the rates it obtained thereafter were substantially lower 53 Further it appeared to me that the contracts for such trucking and depot services had to be approved by Zim Shipping before Starship Agencies could accept them During cross examination Ayal Anat stated that the procedure for entering into such a contract and reviewing claims thereafter was as follow Q Are you saying that the agency can enter into contracts with the vendors without the approval of you or Zim A It s against our policy but he can Q Of course but would you recognise it I give you an example If the agency goes into a contract enters into a contract with a vendor without your approval would you recognise it Would it be binding on you A If you are asking Q Would you pay it A If you are asking if I will find out yes I will Q Yes So when you find out no way you are going to make that payment no way were you going to honour that contract right Ms Anat Logical A Logical Q Yes then in fact that means that they have no power to enter into any contracts on behalf of GSL or Seth Shipping Ltd It follows A As I said our policy is that we are reviewing the contracts before signing Q Okay What do you mean by review the contracts before signing What does it entail What do you check Tell us Explain to us A As I explained before if we are working moving to a new depot for example we will ask a photo of the facility of the depot We will ask a photo of their repairs to see their repair has quality We will ask to have some information about the depot like the size of the yard how many workers are

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  • Equity and Trusts
    Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Equity and Trusts Display By Year select 2010 2009 2007 2005 2004 2003 2002 2001 2000 1999 1998 1996 1995 1994 1993 1992 1991 1987 Top Ten Entertainment Pte Ltd v Lucky Red Investments Ltd 2004 4 SLR R 559 2004 SGCA 43 Decision Date September 15 2004 John While Springs S Pte Ltd and Another v Goh Sai Chuah Justin and Others 2004 3 SLR 596 2004 SGHC 150 Decision Date July 16 2004 Bansal Hemant Govindprasad and another v Central Bank of India 2003 2 SLR R 33 2003 SGCA 3 Decision Date January 18 2003 Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SA 2003 1 SLR R 157 2002 SGCA 45 Decision Date October 25 2002 Malaysian International Trading Corp Sdn Bhd v Interamerica Asia Pte Ltd and others 2002 2 SLR R 896 2002 SGHC 198 Decision Date August 30 2002 Re Pinkroccade Educational Services Pte Ltd formerly known as PDA Pink Elephant Pte Ltd in creditors voluntary winding up 2002 2 SLR R 789 2002 SGHC 186 Decision Date August 21 2002 Caltong Australia Pty Ltd fka Tong Tien See Holding Australia Pty Ltd and Another v Tong Tien See Construction Pte Ltd in liquidation and another appeal 2002 3 SLR 241 2002 SGCA 28 Decision Date May 29 2002 Caltong Australia Pty Ltd formerly known as Tong Tien See Holding Australia Pty Ltd and another v Tong Tien See Construction Pte Ltd in liquidation and another appeal 2002 2 SLR R 94 2002 SGCA 28 Decision Date May 29 2002 Management Corporation Strata Title Plan No 473 v De Beers Jewellery Pte Ltd 2002 1 SLR R 418 2002 SGCA 13 Decision Date March

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    Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Equity and Trusts Display By Year select 2010 2009 2007 2005 2004 2003 2002 2001 2000 1999 1998 1996 1995 1994 1993 1992 1991 1987 Flamelite S Pte Ltd and others v Lam Heng Chung and others 2001 3 SLR R 610 2001 SGCA 75 Decision Date November 15 2001 Ho Kon Kim v Lim Gek Kim Betsy and others and another appeal 2001 3 SLR R 220 2001 SGCA 62 Decision Date September 26 2001 Banque Nationale de Paris v Hew Keong Chan Gary and others 2000 3 SLR R 686 2000 SGHC 239 Decision Date November 20 2000 Tang Hsiu Lan v Pua Ai Seok ors 2000 SGHC 163 Decision Date August 7 2000 Low Hua Kin v Kumagai Zenecon Construction Pte Ltd in liquidation and another 2000 2 SLR R 689 2000 SGCA 38 Decision Date July 28 2000 Singapore River Cruises Leisure Pte Ltd v Phun Teow Kie and another 2000 1 SLR R 22 2000 SGHC 2 Decision Date January 6 2000 Kumagai Zenecon Construction Pte Ltd and another v Low Hua Kin 1999 3 SLR R 1049 1999 SGHC 313 Decision Date November 30 1999 Sitiawah Bee bte Kader v Rosiyah bte Abdullah 1999 3 SLR R 606 1999 SGHC 267 Decision Date October 12 1999 GHL Pte Ltd v Unitrack Building Construction Pte Ltd and Another 1999 4 SLR 604 1999 SGCA 60 Decision Date August 14 1999 Cheong Yoke Kuen and others v Cheong Kwok Kiong 1999 1 SLR R 1126 1999 SGCA 27 Decision Date April 13 1999 Page

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  • Equity and Trusts
    Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Equity and Trusts Display By Year select 2010 2009 2007 2005 2004 2003 2002 2001 2000 1999 1998 1996 1995 1994 1993 1992 1991 1987 Law Society of Singapore v Khushvinder Singh Chopra 1998 3 SLR R 490 1998 SGHC 313 Decision Date September 21 1998 ERA Realty Network Pte Ltd v Puspha Rajaram Lakhiani and another 1998 2 SLR R 721 1998 SGHC 213 Decision Date June 27 1998 ERA Realty Network Pte Ltd v Puspha Rajaram Lakhiani and Another 1999 1 SLR 190 1998 SGHC 213 Decision Date June 27 1998 Rajabali Jumabhoy and Others v Ameerali R Jumabhoy and Others 1998 2 SLR 439 1998 SGCA 35 Decision Date May 20 1998 Singapore Island Country Club v Hilborne 1996 3 SLR R 418 1996 SGCA 65 Decision Date October 23 1996 Kok Lee Kuen and another v Choon Fook Realty Pte Ltd and others 1996 3 SLR R 182 1996 SGCA 57 Decision Date October 1 1996 Syed Ali Redha Alsagoff administrator of the estate of Mohamed bin Ali bin Faraj Basalamah deceased v Syed Salim Alhadad bin Syed Ahmad Alhadad and others and another matter 1996 2 SLR R 470 1996 SGHC 142 Decision Date July 17 1996 Syed Ali Redha Alsagoff administrator of the estate of Mohamed bin Ali deceased v Syed Salim Alhadad 1996 3 SLR 410 1996 SGHC 142 Decision Date July 17 1996 Salijah bte Ab Latef v Mohd Irwan bin Abdullah Teo 1995 3 SLR R 233 1995 SGHC 216 Decision Date September 13 1995 Pacific Rim Investments Pte Ltd v Lam Seng Tiong and another 1995 2 SLR

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  • Equity and Trusts
    Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Equity and Trusts Display By Year select 2010 2009 2007 2005 2004 2003 2002 2001 2000 1999 1998 1996 1995 1994 1993 1992 1991 1987 Hytech Builders Pte Ltd v Tan Eng Leong and another 1995 1 SLR R 576 1995 SGHC 85 Decision Date March 25 1995 Forum Development Pte Ltd v Global Accent Trading Pte Ltd and another appeal 1994 3 SLR R 1097 1994 SGCA 145 Decision Date December 30 1994 Thahir Kartika Ratna v PT Pertambangan Minyak dan Gas Bumi Negara Pertamina 1994 3 SLR R 312 1994 SGCA 105 Decision Date August 25 1994 Goh Swee Fang and others v Tiah Juah Kim 1994 3 SLR R 556 1994 SGCA 118 Decision Date July 1 1994 Ohm Pacific Sdn Bhd v Ng Hwee Cheng Doreen 1994 2 SLR R 633 1994 SGCA 85 Decision Date May 30 1994 Bengawan Solo Pte Ltd and another v Season Confectionery Co Pte Ltd 1994 1 SLR R 448 1994 SGCA 29 Decision Date February 24 1994 Chiarapurk Jack and others v Haw Par Brothers International Ltd and another and another appeal 1993 2 SLR R 620 1993 SGCA 55 Decision Date August 2 1993 Tang Siew Choy and others v Certact Pte Ltd 1993 1 SLR R 835 1993 SGCA 35 Decision Date May 12 1993 Lim Kim Cheong v Lee Johnson 1992 2 SLR R 688 1992 SGHC 232 Decision Date August 31 1992 X Pte Ltd and another v CDE 1992 2 SLR R 575 1992 SGHC 229 Decision Date August 28 1992 Page

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  • Equity and Trusts
    Maxwell Chambers Singapore International Arbitration Centre Singapore International Mediation Centre Singapore Mediation Centre Singapore Chamber of Maritime Arbitration ADR Publications Laws of Singapore Overview Commercial Law Case Law Cases in Articles Free Law Arbitration Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Equity and Trusts Display By Year select 2010 2009 2007 2005 2004 2003 2002 2001 2000 1999 1998 1996 1995 1994 1993 1992 1991 1987 Lee Hiok Ping Mitr Dephanphongs and Others v Lee Hiok Woon and Others 1992 SGHC 11 Decision Date January 24 1992 Computerland Corp v Yew Seng Computers Pte Ltd 1991 2 SLR R 379 1991 SGCA 28 Decision Date August 27 1991 Shiffon Creations Singapore Pte Ltd v Tong Lee Co Pte Ltd 1987 SLR R 730 1987 SGHC 53 Decision Date December 29 1987 Page 6 of 6 Start Prev 1 2 3 4 5 6 Next End Display 5 10 15 20 25 30 50 100 All Overview Commercial Law Case Law Cases in Articles Agency Arbitration

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  • Income Taxation
    ADR Publications Laws of Singapore Overview Commercial Law Case Law Cases in Articles Free Law Arbitration Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Income Taxation Display By Year select 2008 2006 2000 1994 1986 Comptroller of Income Tax v VJ 2009 2 SLR 91 2008 SGHC 224 Decision Date December 1 2008 Comptroller of Income Tax v IA 2006 4 SLR 161 2006 SGCA 24 Decision Date August 3 2006 T Ltd v Comptroller of Income Tax 2006 2 SLR 618 2006 SGCA 13 Decision Date March 30 2006 Comptroller of Income Tax v HY 2006 2 SLR 405 2006 SGCA 7 Decision Date March 7 2006 Pinetree Resort Pte Ltd v Comptroller of Income Tax Decision Date September 6 2000 Comptroller of Income Tax v GE Pacific Pte Ltd 1994 2 SLR 690 1994 SGCA 73 Decision Date July 1 1994 Mount Elizabeth Pte Ltd v Comptroller of Income Tax 1986 SLR 421 1986 SGHC 35 Decision Date September 5 1986 Display 5 10

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  • Comptroller of Income Tax v VJ[2009] 2 SLR 91; [2008] SGHC 224
    from any business of the making of investments Any business of the making of investments 12 The key question in this appeal is what the above quoted words in s 10E mean 13 It is first of all a business In the well known Singapore Court of Appeal case of DEF v The Comptroller of Income Tax 1961 MLJ 55 Buttrose J at 58 held that business implies or connotes a series or repetition of acts in carrying on or carrying out a scheme for profit making He also said at 59 T he word business in section 10 1 a of the Ordinance is used in association with trade profession or vocation all of which connote habitual and systematic operations a continuity or repetition of acts or similar operations 14 In that same case Ambrose J said at 61 T he fundamental idea underlying the three words trade profession or vocation in section 10 1 a of the Singapore Income Tax Ordinance is the continuous exercise of an activity Considering the context it seems to me that the same fundamental idea underlies the word business which appears between the word trade and the words profession or vocation and that the word business must therefore be given its ordinary meaning namely an occupation habitually engaged in especially for livelihood or gain 15 Thus the carrying on of a business is to be distinguished from passive derivation of income Examples of the latter to bring out the distinction are set out below 16 First where a company merely holds shares in other companies carries out minimal activities and derives little income apart from dividends it will not be treated as carrying on a business The dividends will be assessed to tax under s 10 1 d which applies to income derived passively from dividends interest or discounts instead of s 10 1 a Deductions under s 14 in the ascertainment of the income are limited to those incurred in the production of that income in the year of assessment Given that the company is a passive investor the deductions allowable would be principally interest incurred on moneys borrowed to purchase the shares To the extent that the expenses in the year of assessment exceed the income the excess may not be carried over into the next year of assessment Although that is strictly the position at law in practice as was observed by the Court of Appeal in JD Ltd v Comptroller of Income Tax 2006 1 SLR 484 at 51 the Comptroller has made some concessions as regards the deductibility of expenses in the ascertainment of income not falling under s 10 1 a 17 Secondly if a company that owns properties merely lets them out but carries out minimal or no other activities it will not be treated as carrying on a business either Such a company will be assessed on its rental income under s 10 1 f which applies to income derived passively from rents royalties premiums and any other profits arising from property Here again any excess of expenses and outgoings over the income in any year of assessment may not be carried forward to the next year of assessment Moreover capital allowances which might otherwise be available to a company carrying on such a business are denied to the taxpayer company because it does not carry on a business in undertaking such activities Making of investments 18 In my view the phrase simply means investing It does not mean the turning over of investments for profit by the purchase and resale of investments Indeed if the business of the company was in the purchase and resale of investments for profit it would be treated as an investment dealing company In that event any gains made in the purchase and resale would be taxable as profits rather than be accorded treatment as a capital gain Rowlatt J gives useful guidance on this point in The Commissioners of Inland Revenue v The Tyre Investment Trust Ltd 1924 12 TC 646 where he held at 656 Mr Grant suggests that the making of investments means that the Company s principal business is the turning over of investments and making profits by the purchase and re sale of investments I do not think so Making investments here does not mean that making investments means investing making is nothing it means investing and before you can hold an investment you have to acquire it in other words to make it 19 That s 10E was intended to apply to an investment holding company was recognised by the Court of Appeal in JD Ltd v Comptroller of Income Tax 2006 1 SLR 484 20 Hence the emphasis is on the acquisition holding or retention of an investment as opposed to the purchase for resale of the investment By way of clarification this is not to say that an investment holding company may not realise its investment or switch one investment for another in the course of its business as such If such transaction truly was undertaken in the course of its business as an investment holding company any gains derived therefrom would be capital in nature and not exigible to tax The corollary to that is that losses incurred would be capital in nature and not be available for set off against income 21 It follows from the above that I cannot agree with the Respondent s definition of investment making activities set out in para 7 of the Respondent s case which reads as follows as a matter of first principles investment activities must comprise the following a acquisition of investments b any preparation of the investment to a desired state For example in the case of land the development of the same into a lettable building c the holding of investment in its desired state d the receiving or earning of income from the holding of the investment and e the eventual disposal of the investment upon maturity of investment time horizon emphasis added 22 Neither do I find tenable the Respondent s Submissions at para 12 thereof which I quote below It is submitted that on any reasonable consideration of its activities the Respondent s main business cannot be characterised as the making of investments A company whose main business is property investment would consider the following a It would take a view of the periodic returns it can expect to receive from holding the property b It would determine its desired investment time horizon c It would also consider the expected disposal value of the investment d Usually in the interim period between the purchase of the land and disposal of the same the company may decide to develop land for purpose of letting to derive rental income In doing so it may render some services to its tenants However such services would be restricted to the basic usual maintenance services which is an integral and necessary part of company s investment in property which gives rise not to a business profit but to rental income The principal part of the company s income remains to be derived from the rent charged by the company to the tenant for leasing the tenanted premises emphasis added 23 Quite apart from the fact that the Respondent s counsel gratuitously introduced the concept of a main business my other criticism of the submission is that there is no basis for foisting sub paras b and c as requirements for a company in the business of letting immovable properties Respondent s imposition of sub paras b and c in its definition of investment making activities likewise is unwarranted So far as sub para b is concerned it is obvious that the preparation of the investment to a desired state is not essential An investment company could well purchase a completed building Moreover where the investment consists of securities such as stocks and shares no preparation of any kind is involved 24 Similarly the requirement in sub para e for eventual disposal of the investment upon maturity of investment time horizon surely cannot be a pre requisite There may be no time horizon set The investment might never be disposed of 25 The Respondent s attempt to elevate these characteristics as sometimes they are of investment making companies into absolute essentials and thereby to argue that the Respondent does not qualify as an investment making company must fail Business of the making of investments 26 The above expression involves both the concept of business and that of the making of investments Given that in the making of investments it is not essential that there be the turning over of investments that which makes it a business rather than a passive investment may come from activities the company undertakes habitually or continually with a view to profit 27 Where the activities relate to or are connected with the generation of income from the investment it is not difficult to conclude that they form part of the business of the making of investments Where the activities cannot be said to be in any way related to or connected with the generation of income from the investments it is possible that the activities constitute part of a discrete business separate and distinct from that of the making of investments Conceptually I see no difficulty in a company in the business of making investments having another separate and distinct business at the same time But where the activities can be said to be ancillary or incidental to the business of the making of investments they form part of that business Business of letting immovable properties 28 Section 10E 2 defines the business of the making of investments to include the business of letting immovable properties Here again the word business is juxtaposed against the letting of immovable properties Once again therefore there is a requirement for activities consistent with the carrying on of a business If a company merely lets out the properties without carrying out other activities it would be merely a passive investor in immovable properties 29 In order for a company to be carrying on a business of letting immovable properties it must not only rent out properties but also carry out activities that are systematic habitual or repetitive with respect to the letting of the properties A paradigm example would be where a company lets immovable properties for rent and additionally provides services and facilities to the tenants making it more attractive for tenants to want to rent the properties as the Respondent in the instant case does The Board s interpretation of the business of letting immovable properties 30 The Board did not expressly state what in their view was meant by the expression the business of letting immovable properties They said VJ v The Comptroller of Income Tax 2007 SGITBR 3 at 13 that T he fact that a business includes the letting of immovable property does not automatically make the business one of the making of investments This we believe is also the import of the UK case of IRC v George and Another 2003 EWCA Civ 1763 The Board then said at 19 that whilst George concerned a different statute nevertheless it concerned the very same issue of what may or may not be said to be investments and making or holding investments 31 With respect to the Board in following the approach in Inland Revenue Commissioners v George 2004 STC 147 IRC v George they made an error of law The decision in that case related to a different factual and statutory context Indeed in IRC v George itself Carnwath LJ at 12 endorsed the view that cases relating to different taxes and different subject matter were unlikely to be helpful The key question there was whether the business in question consisted wholly or mainly of making or holding investments within the meaning of s 105 3 of the UK Inheritance Tax Act 1984 32 On the facts it was undisputed that the business did not consist of or include making investments but that it did include holding investments although it did not consist of that alone That being the case the question was whether the business was mainly that of holding investments For this purpose as observed by Carnwath LJ at 11 T he principal areas of debate have been first the correct allocation between investment and non investment of the various activities involved in operating the site including in particular the services provided for the residential park and secondly in the light of that allocation whether the investment element of the business was predominant Comparing that case to ours the critical difference is that in s 10E there is no requirement that the business of letting immovable properties must be the whole or main business of the company 33 This is not to say that once the business of the company includes that of the letting of immovable properties s 10E is to apply regardless of whether the income of the company was entirely from the business of the making of investments As formulated s 10E applies only in determining the company s income derived from any business of the making of investments but not otherwise It appears this was where the Revenue fell into error in its submissions before the Board although in the present appeal the Revenue moderated its stand submitting as follows in paras 41 and 43 to 46 of the Appellant s Case Amended 41 By necessary implication the income that is subject to s 10E must be circumscribed by the ambit of business of the making of investments and business of the letting of immovable properties On a literal reading the expression income of a company derived from any business of the making of investments in s 10E 1 and the substituted expression income of a company derived from any business of letting immovable properties is not restricted to rent income alone 43 If it is determined that any income in question is not from a business of the letting of immovable properties s 10E can only be invoked provided the income arises from the business of the making of investments This must logically be so for otherwise income from investments in the form of securities will not come within the scope of s 10E The Respondent s concern that the definition in s 10E will be given an expansionary view is unfounded 44 The following examples may serve to illustrate more clearly the circumstances when s 10E may be applied 45 Company A owns and manages 3 shopping centres which it lets out to tenants It also provides services to tenants and carries out promotion activities that will draw custom to the shopping centres The Revenue will apply s 10E to the rent and service charge income derived by the Company A from the 3 shopping centres as they constitute immovable properties that are held as investments 46 Company B owns an office building that is leased to tenants with the usual services of cleaning power supplies security etc In addition it also holds a restaurant franchise and operates 2 restaurants from premises it does not own The Revenue will apply s 10E only to the income from the office building but not the income from the restaurants as the operation of restaurants is not a business of the making of investments 34 As can be seen from the above the Revenue no longer takes the approach that once the business of the company includes that of the letting of immovable properties the entire income of the company is to be determined in accordance with s 10E Para 46 in particular clearly admits of the possibility that the company may have income from a business other than that of the making of investments Such income clearly ought not to be subject to s 10E In other words the business of the taxpayer may be a composite business of which only part is that of the making of investments That was implicit in the decision of the Board in IE v Comptroller of Income Tax 2005 SGITBR 1 35 In that case the taxpayer company was the developer and owner of a major integrated complex comprising five office towers a large retail podium and a convention centre Three of the office towers were for sale and the gains therefrom were treated as trading profits for tax purposes under s 10 1 a of the Act The appellant company derived rental income from the remaining two office towers and the retail podium and there was no dispute that the rental income was derived from a business of the making of investments under s 10E of the Act What was in issue was whether the income from the operation of the convention centre was similarly to be treated as having been derived from the business of the making of investments under s 10E 36 The appellant company received fees from organising exhibitions conventions and seminars at the convention centre It granted licences to exhibitors to use allocated space for a limited time It also provided technical audio and visual services to the customers and carried advertisements on large electronic information screens The appellant company also provided catering services for the various functions at the convention centre In addition it operated outlets such as restaurants and speciality food outlets within the centre From the outset the appellant company had created a separate operating business division with its own management team led by a general manager The centre also had its own accounting administration marketing building management food and beverages and housekeeping departments 37 On the above facts the Board held that the appellant company s income from the operation of the convention centre ought to be assessed under s 10 1 a of the Act without applying s 10E leaving only the income from the rental of the two tower blocks and the

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