Suen Hung Shan v. Commissioner of Inland Revenue

CAMP 144/2020

[2020] HKCA 1010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 144 OF 2020

(ON AN INTENDED APPEAL FROM HCIA NO 1 OF 2020)

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BETWEEN      

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JUDGMENT

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Hon Yuen JA:

1.1.On 26 August 2020, Mr Suen Hung Shan (“the Taxpayer”) filed a summons in this court for leave to appeal against the Decision of the Inland Revenue Board of Review (“BoR”) given on 16 March 2020 in B/R48/18 (“the BoR Decision”) regarding salaries tax payable for the year of assessment 2013-2014 (“Y/A 2013-2014").

1.2.In HCIA1/2020, Godfrey Lam, J (“the Judge”) in the Court of First Instance (“CFI”) dismissed the application for leave to appeal on the ground that it was out of time¹.

Relevant dates

2.It is important to note the dates when important procedural steps were taken. 

3.According to the Taxpayer, the BoR Decision was communicated to him on 19 March 2020².

4.1.The Taxpayer then applied to the CFI for leave to appeal by a summons filed on 7 May 2020 (“the CFI application”) which was served on the Commissioner of Inland Revenue (“the Commissioner”) on 11 May 2020.

4.2.On 26 June 2020, the Judge dismissed the CFI application (“the June Decision”) on the ground that it was not lodged or served within the statutory time limit stipulated in the Inland Revenue Ordinance Cap. 112 (“IRO”) as “extended” pursuant to the Interpretation and General Clauses Ordinance Cap.1 (“IGCO”). 

4.3.As the Judge had determined the CFI application on the basis of written submissions only, the Taxpayer (pursuant to s.63(3)(g) IRO) requested the Judge to reconsider the determination at a hearing inter partes.

4.4.The inter partes hearing took place on 24 July 2020. On the same day, the Judge ordered that his Decision of 26 June 2020 be maintained (“the July Decision”). 

5.As noted earlier, on 26 August 2020 the Taxpayer applied to this court for leave to appeal. 

Procedural steps for applying for leave to appeal

6.1.Section 69(1) IRO provides that where the BoR has made a decision, either party may appeal to the CFI against the BoR’s decision on an appeal under s.68 IRO³ on a ground involving only a point of law. 

6.2.However, s.69(2) and s.69(3) (where material) provide as follows:

“(2) No appeal may be made ... unless leave to appeal has been granted, on the application of the appellant [i.e. the Taxpayer] or the Commissioner –

(a) by the [CFI]; or

(b) if a further application is made under subsection (4), by the Court of Appeal.

(3) For the purposes of an application to the [CFI] under subsection (2)(a) for leave to appeal –

(a) the application –

(i) must be lodged with the Registrar of the High Court, and served on the other party, within 1 month after the following date –

...

(B) if the Board’s decision is notified to the appellant by notice in writing, the date of the communication by which the decision is notified ...”.

(Emphasis added).

6.3.Since, on the Taxpayer’s own case, the date of the communication of the BoR Decision was 19 March 2020, the period of one month elapsed on 19 April 2020.

6.4.However, the High Court Registry was closed due to public health considerations from 23 March 2020 to 5 May 2020.  It re-opened on 6 May 2020. 

6.5.Sections 71(1A)(a) and (2) IGCO provide that if an act is allowed to be done within a period of time (in this case, within 1 month after 19 March 2020), and the last day of the period (in this case, 19 April 2020) was a closure day for the Registry, the period includes the next working day.  The next working day after the closure was 6 May 2020, so that became the day when he must lodge and serve the application for leave to appeal. 

6.6.Unfortunately for the Taxpayer, he lodged the application for leave to appeal only on 7 May 2020, i.e. one day late. 

7.1.In the June Decision, the Judge considered whether he had power to extend time in favour of the Taxpayer.  After examining a number of authorities, he concluded that the court had no power to do so⁵.  Accordingly, the Judge dismissed the application for leave to appeal.

7.2.As the Judge had determined the application on the basis of written submissions only, on 2 July 2020 the Taxpayer sent to the court a document entitled “Request for Hearing under Cap.112 S.69(3)(g) regarding the Written Decision issued on 26 June 2020 without hearing”.

7.3.The Judge held an inter partes hearing on 24 July 2020 at which the Taxpayer was present.  After hearing the Taxpayer’s submissions, the Judge orally delivered the July Decision in which he maintained the June Decision and refused to grant leave to appeal.

8.1.Section 69(4) IRO provides that if the CFI refuses to grant leave to appeal, the applicant may make a further application to the Court of Appeal for leave to appeal against the Board’s decision.

8.2.However, s.69(5) provides:

“(5) For the purposes of an application to the Court of Appeal under subsection (4) for leave to appeal –

(a) the application –

(i) must be lodged with the Registrar of the High Court, and served on the other party, within 14 days after the date on which the [CFI] refuses to grant leave ...”.

(Emphasis added).

8.3.As the Judge refused to grant leave in the July Decision on 24 July 2020, an application to this court for leave to appeal must be lodged and served by 7 August 2020 (being 14 days after the date on which the CFI refused to grant leave).

8.4.Unfortunately for the Taxpayer, again he did not file the summons in time.  He did not file the application in this court until 26 August 2020.  In his “Notice of Appeal (Statement of Grounds)” dated 25 August 2020, he wrote:

“4. Further, take notice of the late receipt of the Sealed Order of HCIA1/2020, HKCFI1972/2020 decided on 24 July 2020, filed by CIR on 14 Aug, mailed by CIR on 17 Aug 2020 and received on 21 Aug 2020 by ordinary mail. The appellant hereby request the Court of Appeal’s discretion to grant extension of time in this special instance.

5. If above reason not acceptable to CA, the appellant hereby request the Court of Appeal’s discretion to grant extension of time in this special instance for the appeal out of time decision of the refusal in granting of leave to appeal by HKCFI on 24 July 2020 due to the GAP from the covid-19 pandemic in consideration to the relief sought would be unlikely to cause substantial hardship to, or substantially prejudice the rights of CIR or would be detrimental to good administration”. (Emphasis added).

Discussion

9.First of all, by asking for an extension of time, it is clear that the Taxpayer accepts that he was late in making the application to this court.  It is not argued (nor can it be validly argued) that time started to run only on the filing of the sealed order, or service thereof, or receipt thereof.  The Taxpayer has requested this court to exercise a discretion to extend time. 

10.1.However, the court has no such discretion, as it has no power to grant an extension of time at all. 

10.2.The time limit for an application for leave to appeal was imposed by statute in the IRO and there is no provision in that statute empowering the court to extend time.  The use of the word “must” in s.69(5)(a)(i), together with the absence of a provision granting power to extend time, make it clear that the legislative intention was to hold an applicant party (whether the Taxpayer or the Commissioner) to the specific time limit in the statute.  Obviously a provision stipulating a time limit is a substantive requirement which is necessary, and it cannot be said that the limit is unreasonable.    

11.1.The only power that this court has to extend time is in the Rules of the High Court and it has been held in a number of well-established authorities that these Rules cannot override strict time limits imposed in statutes themselves (being primary legislation). 

11.2.Thus in Bangkok Capital Antique Co Ltd v The Collector of Stamp Revenue⁶, this court⁷ held that the power of the court to extend time in IGCO s.72 and in Order 3 rule 5 of the Rules of the High Court could not override the express words of a statute (in that case, the Stamp Duty Ordinance, Cap.117)⁸, and that “a court has no power to extend a period of time limited by statute for doing an act unless the statute so provided”⁹.  (Emphasis added).

11.3.In Mita Kogyo Kabushiki Kaisha v Mitac Inc¹⁰, this court¹¹ also held that specific provisions of primary legislation (in that case, the then Trade Marks Ordinance, Cap.43) overrode general provisions in the Rules of the High Court regulating time for appeals¹².     

11.4.In other words, there is simply no power under which this court can extend time, so it cannot even begin to exercise discretion. 

Orders

12.1.That being the case, there is no competent application to this court for leave to appeal, and it must be dismissed as it is totally without merit. 

12.2.Pursuant to s.69(5)(f) IRO, an order is made that no party may make a request under s.69(5)(e) IRO for a hearing inter partes.  

12.3.There shall be the usual order nisi that the Taxpayer pay the Commissioner’s costs.  Unless an application to vary the costs order nisi is made by summons within 14 days after the date of this Judgment, the costs order will become absolute upon the expiry of that period.   

12.4.If no such summons is filed, the Commissioner may, within 28 days after the date of this Judgment, file a statement of costs for gross sum assessment, copied to the Taxpayer.  Should the Taxpayer dispute any item therein, he should, within 14 days after service, file a statement of opposition, copied to the Commissioner.  This court will then undertake an assessment of costs on paper.     

Hon Barma JA:

13.I agree with the judgment of Yuen JA.

The appellant was not represented

Ms Katherine Chan GC, of the Department of Justice, for the respondent