John Wiley & Sons Uk2 Llp and Another v. The Collector of Stamp Revenue

HCMP 954/2021

[2021] HKCFI 3060

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS No 823 OF 2018

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Before: Hon Au-Yeung J in Chambers

Closing Date for Representation: 3 September 2021

Date of Decision: 12 October 2021

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D E C I S I O N

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Background

1.The issue in this case is whether the Court of First Instance has jurisdiction to hear an appeal against the assessments of stamp duty.

2.On 9 December 2020, the respondent (“Collector”) assessed the appellants to stamp duty under section 4 and Head 2(1) of the First Schedule to the Stamp Duty Ordinance, Cap 117 (“SDO”).

3.On 7 January 2021, the appellants launched an appeal in the District Court (DCSA 2/2021) against the assessments of stamp duty pursuant to section 14 of the SDO.

4.Upon the appellants’ application, with the Collector remaining neutral, the case was transferred from the District Court to the Court of First Instance on 20 April 2021 on the grounds that the appeal: (1) disclosed an important matter of law turning on the proper construction of section 45 of the SDO and that the disposal of this appeal was likely to have material fiscal consequences for duty-payers holding stocks and immovable property in Hong Kong; and (2) related to disputed tax materially in excess of the ordinary jurisdiction of the District Court in civil matters.

5.On 15 July 2021, the appellants took out a case management summons.

6.Registrar Kwang directed the parties to explain whether the Court of First Instance had jurisdiction to hear the present proceedings and asked the Collector to ascertain if there were any previous stamp duty appeals that had been transferred from the District Court to the Court of First Instance.  As the matter involved a question of jurisdiction, the matter was referred to a judge for determination.

The parties’ respective contention

7.Deacons, representing the appellants, contend that section 14 of the SDO vests original jurisdiction to hear stamp duty appeals in the District Court.  Once the notice of appeal is filed, the appeal is subject to the Rules of the District Court (“RDC”) and the District Court Ordinance (“DCO”) to the extent that they are not expressly excluded or modified by the Ordinance.  That is consistent with the ordinary principle of statutory construction that the particular law overrides the general law.

8.There are express modifications to the jurisdiction of the District Court in hearing a stamp duty appeal as regards, for example, the obligation of the Collector to draft a case stated (section 14 (2)), limited remedies available to a successful appellant (section 14 (4)), and the nature of the order that the District Court may make in the event of a finding in favour of the Collector (Section 14 (5)).  

9.Deacons submits that the SDO does not expressly exclude section 42 of the DCO or Order 4 of the RDC that govern the transfer of proceedings.  There is no express indication in the SDO that the District Court is conferred exclusive jurisdiction to hear stamp duty appeals.  Had it been otherwise, the Legislature would have said so in the SDO.  Accordingly, it is open to the District Court to transfer a stamp duty appeal to the Court of First Instance.

10.Deacons also submit that stamp duty appeals often engage complex matters of law, with potentially extensive implications for the general public.  Complexity and public interest are criteria that may be taken into account by the District Court in deciding whether to grant leave to transfer proceedings to the Court of First Instance.  It would be inconsistent with the underlying objectives and first principles of civil procedure for the District Court to be treated as having exclusive jurisdiction in stamp duty appeals, irrespective of the complexity of the matter, the amount of duty at stake and the broader fiscal implications of the Court’s decision.

11.The Collector, who originally took a neutral stance, now submits that the Court of First Instance does not have jurisdiction in the absence of legislation conferring power to hear such appeals.  The collector can only find one authority on stamp duty appeal.

Legal principles on appellate jurisdiction

12.The principles on appellate jurisdiction have been succinctly set out in the skeleton submission of Ms Elizabeth Cheung, counsel for the Collector, and I respectively adopt the same.

13.Courts do not have inherent appellate jurisdiction.  Appeals are creatures of statutes, whether they are appeals from statutory tribunals to the courts or appeals from lower courts to higher courts: Solicitor v Law Society of Hong Kong (2003) 6 HKCFAR 570, §31, Li CJ.

14.This principle was cited by CJ Ma in Mok Charles v Tam Wai Ho (2010) 13 HKCFAR 762, §36.

15.Similarly, in So Wing Keung v Sing Tao Ltd [2005] 2 HKLRD 11, the Court of Appeal held that it had no jurisdiction to hear an appeal not falling within the ambit of section 13 of the High Court Ordinance, Cap 4 (“HCO”). At §31, Ma CJHC (as he then was) held that:

“(1) The jurisdiction of the Court of Appeal to hear both civil and criminal appeals is circumscribed by the provisions of section 13 HCO. There is no inherent jurisdiction to hear appeals outside of what is prescribed by statute. This is by no means a startling proposition. In George Tan Soon-gin, Silke VP said at 177, ‘We are a creature of statute and we are bound within the confines of the appropriate legislation’. …

(2)  … Here, there is no room for a court to exercise any jurisdiction to hear a case when its jurisdiction has already been defined by statute.  In other words, where a statutory provision delineates the jurisdiction of a court, that court cannot assume a jurisdiction that is outside the statutory scheme.”

Application of the legal principles on appellate jurisdiction

16.It is necessary to consider the primary statute, ie section 14 of SDO, which confers the right of appeal. 

“(1) Any person who is dissatisfied with the assessment of the Collector under section 13 or 47L may … appeal against the assessment to the court and may for that purpose require the Collector to state and sign a case setting forth the question upon which his opinion was required and the assessment made by him.

…

(6) In this section—

court ( 法庭 ) means the District Court;

Registrar (司法常務官) means the Registrar of the District Court.”

17.It is thus clear that the SDO only confers jurisdiction on the District Court and no other courts to hear such appeals.  Outside of the Ordinance, there is no avenue for appeal.  That right to appeal invokes the appellate and not original jurisdiction of the District Court.

18.The Collector agrees, rightly, that once the District Court is seized of jurisdiction, the proceedings shall be governed the by the DCO and RDC.

19.Under section 42 of the DCO:

“The Court may, either of its own motion or on the application of any party, order at any stage the transfer to the Court of First Instance or the Lands Tribunal of all or part of any action or proceedings before it which are within the jurisdiction of the Court of First Instance or the Lands Tribunal, as the case may be.” (emphasis added)

20.It is therefore plain that the court to which a case is transferred must itself have jurisdiction in the first place.  Parties cannot (by consent), or a court cannot (by transfer) confer jurisdiction on another court which does not have the jurisdiction in the first place.

21.Does the Court of First Instance have jurisdiction to hear stamp duty appeals?

22.Firstly, section 12 of the HCO does not confer such jurisdiction:

“(1) The Court of First Instance shall be a superior court of record.

(2) The civil jurisdiction of the Court of First Instance shall consist of—

(a) original jurisdiction and authority of a like nature and extent as that held and exercised by the Chancery, Family and Queen’s Bench Divisions of the High Court of Justice in England; and

(b)     any other jurisdiction, whether original or appellate jurisdiction, conferred on it by any law.” 

(emphasis added)

23.Deacons has not shown that the Court of First Instance has jurisdiction and authority of the kind described in section 12(2)(a) of the HCO.  Insofar as it is sought to invoke “any other jurisdiction” under section 12(2)(b) including “appellate” jurisdiction of the Court of First Instance, there is no statutory provision conferring such jurisdiction on the Court of First Instance. Applying the principles in paragraphs 12-15 above, it is plain that the Court of First Instance does not have jurisdiction to hear stamp duty appeals.

24.Secondly, whilst an Ordinance should not be interpreted so as to take away the jurisdiction of a superior court of record unless it does so by express words or necessary implication, various statutory provisions do take away the jurisdiction of the Court of First Instance.

25.In Lee Kwok Tung Albert v Chiyu Banking Corp Ltd [2018] HKCA 123, the Court of Appeal stated that the “presumption of jurisdiction” applies to superior courts.  In dealing with a claim under the Personal Data (Privacy) Ordinance, Cap 486 (“PDPO”), the Court of Appeal held that PDPO did not confer exclusive jurisdiction on the District Court.  Cheung JA held at §4.15:

“It needs to be emphasised that the High Court which comprises of the Court of Appeal and the Court of First Instance is a court of unlimited civil jurisdiction. The Court of First Instance is expressly stated to be a superior court of record. As Ms Law for the plaintiff correctly pointed out, the significance of the Court of First Instance as a ‘superior’ (as opposed to an ‘inferior’) court of record is that the ‘presumption of jurisdiction’ applies. This means, prima facie, no matter is deemed to be beyond the jurisdiction of a superior court unless it is expressly shown to be so …” (emphasis added)

26.Lee Kwok Tung Albert referred (in paragraph 4.17) to the holding of the Court of Appeal in Wong Hing Cheong v Wah E Investment Ltd & another [2002] HKLRD 175 which held that section 10 of the Building Management Ordinance (Cap 344) did not confer exclusive jurisdiction on the Lands Tribunal.  Wong Hing Cheong,in turn, followed the approach of Findlay J in Ngan Chor Ying v Year Trend Development Ltd [1995] 1 HKC 605, 607G:

“My understanding of the law in this area is that where an Ordinance creates a right or remedy; that is, the right or remedy has no existence independently of the Ordinance creating it, and, at the same time, the Ordinance lays down a particular method of pursuing it in a particular court or tribunal, the courts will, without more, tend to confine a person in pursuit of that right or remedy to that particular court or tribunal. But an Ordinance should not be interpreted so as to take away the jurisdiction of the superior courts unless it does so by express words or necessary implication.” (emphasis added)

27.It is noteworthy that the cases of Lee Kwok Tung, Wong Hing Cheong and Ngan Chor Ying were all dealing with the original jurisdiction of the District Court, Lands Tribunal and Court of First Instance respectively. 

28.Here, the appellants are invoking the appellate jurisdiction of the court. The express words of section 14 of the SDO confers express jurisdiction on the District Court.  By necessary implication, in view of the principles in paragraphs 12-15 above and section 12 of the HCO, a similar jurisdiction is not conferred on the Court of First Instance.  The fact that section 14 of the SDO does not use the term “exclusive jurisdiction” or that “only” the District Court has jurisdiction does not undermine my conclusion.

29.Accordingly, I hold that the District Court has exclusive jurisdiction to hear a stamp duty appeal under section 14 of the SDO and it cannot transfer the appeal to the Court of First Instance.

Past instance of a stamp duty appeal

30.The Collector can only find one case decided in 1969 when a stamp duty appeal was heard by the Full Court of the then Supreme Court: World Magnate Shipping Ltd v The Collector of Stamp Revenue [1969] HKLR 67. 

31.As Deacons rightly points out, World Magnate Shipping is substantially similar to the present circumstances.  That case also involved a stamp duty appeal.  The appeal was brought under section 18(1) of the then Stamp Ordinance and originally in the District Court under section 18(6).  The statutory provision for transfer was under section 10(2) of the District Court (Civil Jurisdiction and Procedure) Ordinance, Cap 336, which was later modified to become section 42 of the current DCO. 

32.Because of the practical importance (at p.69), the appeal was transferred to the Supreme Court on the appellant’s application with the concurrence of the then Collector.  The appeal was further transferred from the Supreme Court to a Full Court of the Supreme Court (with a panel of 3 judges, including the then Chief Justice).  It was upon the direction of the Chief Justice under section 28 of the Supreme Court Ordinance that the matter be heard, in the first instance, before the Full Court without the necessity of being first tried and determined by a Supreme Court judge sitting alone.  Deacons submit thatthe Supreme Court was evidently satisfied that it had jurisdiction to hear the appeal. 

33.Further, in Johnson Stokes and Master v Roucher [1989] 1 HKLR 219, 222 G-H, DHCJ Cruden held that, “As a matter of stare decisis I hold that the Full Court, as constituted in 1972, was exercising the equivalent jurisdiction of the present Court of Appeal.  This Court is therefore bound by the Full Court’s judgment.”

34.Accordingly, Deacons submits that World Magnate Shipping is binding on this Court, being the successor of the Supreme Court.

35.With respect, I am unable to agree for the following reasons:

(1)  The issues of jurisdiction and whether the District Court had the power to transfer the case to the Supreme Court did not appear to have been argued in World Magnate Shipping. 

(2)  Section 28 of the Supreme Court Ordinance was akin to a “leap-frogging” approach which bypassed the single judge court and had a case directly heard by the equivalent of the Court of Appeal.  Such a provision does not exist under the current HCO.

(3)  Since World Magnate Shipping, the Court of Final Appeal has laid down the principle in Solicitor v The Law Society in Hong Kong cited above.  That principle is binding on this Court.

36.For all the reasons given above, I hold that the Court of First Instance does not have jurisdiction to hear this stamp duty appeal.

Other Matters

37.Deacons points out that despite lapse of 8 months since the appeal was first filed in the District Court, the Collector has not stated a case in discharge of his statutory duty under section 14(2) of the SDO.  The appellants would be prejudiced in that if they were to succeed in the appeal, they could not get interest on the stamp duty already paid.  Deacons also points out the change of stance of the Collector from one of neutral stance to now contesting jurisdiction, indicating that the Collector is playing self-serving delaying tactics.

38.With respect to Deacons, if a Court lacks jurisdiction, it is inappropriate for the Court to comment on or punish any party’s conduct.  Any delay on the part of the Collector cannot confer on this Court a jurisdiction that it does not have.

Conclusion

39.For the reasons given, this Court declines jurisdiction.  On a nisi basis, costs shall be paid by the appellants to the Collector, to be summarily assessed and disposed of on the papers.  The Collector shall file and serve a costs statement by 18 October 2021.  The appellant shall file and serve the grounds in objection by 25 October 2021.

40.I thank Ms Cheung and Deacons for their assistance.

Written Submission by Deacons, for the appellants

Written Submission by Ms Elizabeth Cheung, instructed by the Department of Justice, for the respondent