Tang Siu Wing and Another v. The Commissioner of Estate Duty

CAMP 69/2017

[2018] HKCA 172

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 69 OF 2017

(ON AN INTENDED APPEAL FROM HCED NO 1 OF 2013)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.This is an application for leave to appeal against the judgment of Au-Yeung J of 23 October 2017 in HCED 1/2013. HCED 1/2013 is an appeal brought by the appellants as executors of the estate of Tang Wing Cheung, deceased [“the Estate”] against the determination of the Commissioner of Estate Duty on the estate duty payable in respect of the Estate. The Deceased passed away in April 1997.

2.A substantial part of the Estate was converted into a Promissory Note before the death of the Deceased.  Initially, the disagreement between the executors and the Commissioner revolved around the location of the Promissory Note.  In February 2011, the executors claimed for the first time that the interest in the Promissory Note had indeed been assigned to a person called Silas Githinji in consideration of an investment in a mining project in Kenya.

3.After trial, the judge rejected the executors’ case on the assignment. In the judgment, she found that the assignment was inherently improbable, the witnesses called by the executors to be unreliable in terms of proof of the alleged assignment and she was not satisfied that the assignment had been duly executed and effective.  The judge also held that the assignment (even assuming it did exist and was executed by the Deceased) did not take effect in the absence of the signature or other acts of acceptance by the counter-party, Silas Githinji.

4.By reason of section 22(2) of the Estate Duty Ordinance, there cannot be any appeal from the judge unless leave is obtained.

5.The executors applied for leave before the judge.  The judge refused to grant leave in a decision of 24 November 2017.

6.By a summons of 8 December 2017, the executors renewed the application for leave in this Court.

7.We heard the application on 20 March 2018.

8.Though three broad grounds of appeal were included in the draft Notice of Appeal, we can focus on the first ground in this judgment.  If the executors failed on the first ground (which challenge the judge’s finding that the executors failed to prove that a valid assignment existed as alleged), the intended appeal must fail.

9.The first ground is basically an attack on the assessment of evidence by the judge.

10.Such finding can only be successfully challenged on appeal if the judge is plainly wrong.  As this Court has repeatedly reiterated, an appellant borne an onerous burden and the threshold is high, see Pang Ketian Sally v Tam Yuk Hung AnnieCACV 147/2013, 25 April 2014; China Gold Finance v CIL Holdings LtdCACV 11/2015, 27 November 2015; ZJW v SY CACV 10/2017, 1 December 2017.

11.Mr Chen relied on the old case of Benmax v Austin Motor Co Ltd[1955] AC 370 to draw a distinction between the finding of facts based on credibility or bearing of a witness and findings based on inference.  With respect, it should be recognized that the modern authorities have witnessed a change in appellate approach.  In view of the complexity of modern litigation and the heavy demand for appellate resources (with corresponding much lesser time allocated to an appellate court to hear an appeal as compared with the first instance hearing), the courts have come to recognize that though there is a distinction between assessment of credibility and fact finding by way of inference, the latest approach is the one set out in the authorities cited above.  In particular, in ZJW v SY, supra, after reviewing the modern authorities (including those in the UK), Poon JA concluded at [34]:

“ Facts are commonly found on inferences. An inference can be made from primary facts or after a process of evaluation : Bessant’s case [2002] EWCA Civ 763, per Walker LJ at [24]. If the former, the Court of Appeal approaches them in the same way as discussed in Part D1.1 : Beacon Insurance Company Limited v Maharaj Bookstore Limited, supra, Lord Hodge at [17]; China Gold Finance Ltd v CIL Holdings Ltd, supra, per Lam VP at [22]; DBS Bank (Hong Kong) Limited v Sit Pan Jit, supra, per Poon JA at [111] – [117]. If the latter, the Court of Appeal adopts the same approach as per Part D1.2 above.”

12.In the present case, as far as the first ground is concerned, the judge’s finding is partly based on her assessment on the reliability of the witnesses and the documents put forward by the executors and partly based on her assessment of the inherent probability of the executors’ case on assignment. 

13.We are of the view that the plainly wrong test must be fulfilled in order for the executors to succeed.

14.Notwithstanding the efforts of Mr Chen, we are not satisfied that the executors have a reasonable prospect of success in showing that the judge was plainly wrong.  We are in agreement with the judge in her decision refusing leave in finding lack of merit in the attempt to overturn the findings of the judge.

15.We do not see any other basis for leave to be granted in the interest of justice.

16.For these reasons, we dismiss the summons of 8 December 2017.

Mr Vincent Chen, instructed by Cheung, Chan & Chung, for the appellants

Mr Paul H M Leung, instructed by Department of Justice, for the respondent