Commissioner of Estate Duty v. Veena Khiamal Nanwani and Another
Read the full judgment text of CACV 47/1975 on BabelCite. This Court of Appeal judgment was delivered on 16 January 1976.
2. There is no doubt that a certificate of assessment was before the judge at the time when he made his decision to strike out the Defence and the Appellant contends that that was in breach of Order 18 rule 19(2). Counsel for the Commissioner submits that the certificate was not in evidence for the purpose of the application to strike out but only for the purpose of deciding whether, once the Defence had been struck out, judgment could properly be entered for the Commissioner. If, contrary to th
Cited by 1 case
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CACV000047/1975 IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO. 47 OF 1975 (ON APPEAL FROM V.D.C. NO. 6740/74) -----------------
----------------- Coram: Briggs, C.J., Huggins & Pickering, JJ. Date of Judgment: 16th January 1976. ----------------- JUDGMENT ----------------- Huggins, J.: As I understand it there are in substance two questions to be decided: the first is whether the judge took into consideration matter which was not relevant and the second whether it is open to a tax-payer to challenge an assessment on the merits in an action for recovery of estate duty. 2. There is no doubt that a certificate of assessment was before the judge at the time when he made his decision to strike out the Defence and the Appellant contends that that was in breach of Order 18 rule 19(2). Counsel for the Commissioner submits that the certificate was not in evidence for the purpose of the application to strike out but only for the purpose of deciding whether, once the Defence had been struck out, judgment could properly be entered for the Commissioner. If, contrary to that submission, the certificate was in evidence in relation to the application to strike out, he says it was admissible in so far as the application was brought under the inherent jurisdiction. Despite its being pointed out before the hearing to the solicitors for the Appellant that the judge's notes as they appear in the record of appeal were not complete, we are still without the complete notes. Had no evidence been given in the court below (as would be usual upon an application to strike out a pleading) we should not have required them, but it was apparent that evidence had been adduced and in my view we ought to have been supplied with a note which would have indicated the circumstances in which the evidence was admitted. Mr. Lee, who appeared for the Commissioner in the court below, tells us (and of course I accept) that the certificate was handed in after he had finished his submission and at the request of the judge: counsel was not relying upon it in support of his case for striking out. Even so I think it is clear that the judge did not himself keep the issues separate in this way: from first to last he refers in his judgment to "facts" rather than to allegations. (I attach no weight to the use of the word "finding" in the final paragraph, because it was clearly a misuse in relation to a decision of law). Unless, therefore, the admission of evidence can be justified under the inherent jurisdiction of the court I think we must assume that the judge had regard to irrelevant matters in reaching his decision upon the summons before him and that he was in error. As I said in argument, I have no doubt at all that every court has an inherent jurisdiction - we have been shown authority for this in Norman v. Mathews 1916-7 All E.R. (Rep.) 696, 699-but that does not mean that all courts have the same inherent jurisdiction. What is more important in the present case is that the inherent jurisdiction of any court may be limited, expressly or impliedly, by statute. It is conceded that Order 18 rule 19 was applicable to this proceeding in the District Court and it really matters not whether that rule conferred the jurisdiction or merely prescribed the manner in which an existing jurisdiction was to be exercised: the fact remains that the court was bound by the provisions in the rule, including paragraph (2). In my view, therefore, the decision could not stand unless we thought that, on a consideration of the relevant factors, the judge would inevitably have come to the conclusion which he did. 3. The further ground raised by the Appellant is that nothing which was at before the District Court could justify striking out the Defence. The argument which found favour with the District Judge was that, as the Appellant had mot taken advantage of the procedure prescribed in s.22 of the Estate Duty Ordinance to challenge the assessment, he was bound by the assessment and could not challenge it in an action by the Commissioner for recovery of the duty so assessed. That was a view which had previously been adopted by Judge Cons (as he then was) in Estate Duty Commissioner v. CHAN Hay 1966 H.K.D.C.L.R. 129, although we cannot know whether that case was cited to Judge Jones in the present case. Judge Cons relied upon Inland Revenue Commissioners v. Pearlberg 1953 1 W.L.R. 331 and Commissioners of Income Tax v. Syed Abdul Hadi 1958 E.A.L.R. 329, which I will consider in a moment, but he also referred to the embarrassment which would arise "if the court at first instance came to a conclusion in any given circumstances different from the same court in its appellate capacity". With respect I do not think any such embarrassment would arise, because, assuming for the moment that there are concurrent jurisdictions, a decision upon an appeal under s.22 would estop the tax-payer from re-litigating the same point in the proposed action. It does not necessarily follow that, because a special form of appeal is provided, failure to pursue such an appeal will bar a party from raising in an action a matter which could have been decided under the special procedure. On the contrary, there is a presumption against the ouster of the jurisdiction of Her Majesty's courts. The jurisdiction in question here is not the jurisdiction to try the merits (which, of course, was available under s.22) but the jurisdiction to try the merits in an ordinary civil action. In Francis v. Yiewsley and West Drayton Urban District Council 1958 1 Q.B. 478 it was held that a person served with an enforcement notice under s.23 of the Town & Country Planning Act 1947 who did not avail himself of the right of appeal to a court of summary jurisdiction conferred by s.23(4) was not precluded from bringing an action for a declaration that the notice was invalid. I appreciate that in that case the relevant legislation was construed as expressly imposing a limited restriction upon the right of the person served with an enforcement notice to litigate matters which could have been made the subject of an appeal to the court of summary jurisdiction and thereby inferentially showed an intention that the restriction should not be absolute. To that extent the present case is distinguishable. 4. Mr. Lee relied upon R. v. Swansea Income Tax Commissioners 1925 K.B. 250 but that was a very different case. The tax-payer sought prohibition against the Commissioners when, the time for appeal against an assessment having expired, it discovered that (so it alleged) a loss had been incurred during the relevant period instead of the profit on which it had been assessed. The ratio decidendi was that prohibition did not lie, because in making the assessment the Commissioners did not act in excess of jurisdiction. The Lord Chief Justice cited Allen v. Sharp (1848) 2 Ex. (Welsby, H. & G.) 352, but that, too, concerned a statute which enacted that a determination of an appeal to the Commissioners should be final, subject only to a further appeal to the court. That case in its turn was based upon The Earl of Radnor v. Reeve (1801) 2 Bos. & P. 391, where the court said
With that may be compared Pyx Granite Co. Ltd. v. Ministry of Housing and Local Government 1960 A.C. 260, where the House of Lords held that the provision of a right to apply to the local planning authority for the determination of the question whether planning permission was required and of a right of appeal therefrom to the Minister, whose determination was to be final, did not by implication take away
5. The difficulty of this type of case is exemplified by Smith v. East Elloe Rural District Council 1956 A.C. 736, where it was only by a bare majority that the House of Lords held that a provision to the effect that
was sufficient to oust the jurisdiction of the courts in a case where the order was challenged on the ground that it had been made in bad faith. 6. It seems to me that the issue is narrowed to this, Does the Estate Duty Ordinance provide that the decision of the Commissioner as notified by means of this certificate shall be final? The Ordinance does not say so directly. Where an appeal is brought under s.22 it is provided by subsection (2) that
but that is not the same thing: the subsection merely limits the appeals which may be brought: it does not mean that the decision cannot be challenged otherwise than by appeal if some other avenue is open - subject to the principle of res judicata. In the present statute there is neither a general provision that an assessment which has not been appealed shall not be open to challenge nor an express restriction of any kind on the right to litigate matters which could have been made the subject of an appeal. In my view the present case is nearer to Pyx Granite Co. Ltd. v. Ministry of Housing and Local Government than it is to Earl of Radnor v. Reeve. 7. Inland Revenue Commissioners v. Pearlberg (supra) does not, in my opinion, support the Commissioner's contention. There Denning L.J. said that the proper remedy for a wrong assessment of income tax was obtainable only by appeal to the General Commissioners and that the merits of the assessment could not be raised in defence of an action to recover the tax. There were in that case two groups of properties in respect of which tax was claimed. It would seem that the defendant was sued under the Finance Act 1941 in respect of the second group as a person who had been the landlord but who was not the person named in the assessment. Paragraph 5 of Schedule 1 raised against him a conclusive presumption that he was the landlord, so that no defence that he was not the landlord was available to him. It was argued before us that, although Denning L.J. did not rely upon a like presumption in respect of the first group of properties, such a presumption did arise upon a proper construction of the statutes. I do not think that is correct: Schedule 1 applied only where the person sued was not the person named in the assessment, and the defendant was the person assessed in respect of the first group. However, the court relied upon s.169(1) of the Income Tax Act 1918, which provided that "any tax charged" under the provisions of that Act might be sued for end recovered, and there is no doubt that the tax claimed had been charged. The Estate Duty Ordinance, under which the present claim is brought, contains no equivalent provision. In Hong Kong, as in England, there is a significant distinction between the legislation relating to the taxation of the living and the taxation of the dead. The Estate Duty Ordinance contains no equivalent to s.75(4) of the Inland Revenue Ordinance and we must assume both that the omission was deliberate and that some different result was intended: I do not think it would be right to regard s.75(4) itself as mere surplusage. In England the provision comparable to our s.22 is s.10 of the Finance Act 1894, but there is also s.3 of the Administration of Justice (Miscellaneous Provisions) Act 1933, which allows a tax-payer to apply for summary determination by the High Court of his liability as to death duties. The precise words of s.3 are:
It would not appear that a person can apply under s.3 to have the amount of the duty chargeable considered. In re Park, deceased 1970 1 W.L.R. 626 is, therefore, not directly in point. There the issue between the tax-payer and the Commissioner was whether some property was liable to estate duty at all: the quantum of the assessment was, apparently, not in dispute. The tax-payer chose not to apply under s.3 but to wait until he was sued by the Commissioner. The Commissioner duly made a claim. What was decided in the litigation was that the proper procedure for the Commissioner to adopt in those circumstances was to issue a writ and not to apply by originating summons. However, in the course of his judgment Goff, J. said at page 632:
8. Inland Revenue Commissioners v. Pearlberg was relied upon by Campbell, C.J. in Commissioner of Inland Revenue v. Syed Abdul Hadi. The relevant Ordinance in the latter case provided that
The learned Chief Justice held that although there was a difference between that and paragraph (5) of Schedule 1 of the English Finance Act 1941 that did not assist the defendant, because "the Commissioner here does not have to rely on any 'conclusive presumption' in order to assess the defendant". With respect I find that reasoning hard to follow. It appears to have been assumed that there could never be concurrent jurisdictions. All the provisions of the relevant statute are not set out in the report and it may be that there was a provision similar to s.169(1) of the English Income Tax Act 1918, but nothing which does appear indicates a clear intention to limit the jurisdiction of the court when an action is brought to recover the tax. It is true that our s.14(2) is similar to s.67(3) of the Aden Ordinance, save that the certificate is to be "prima facie evidence" and not "sufficient evidence": s.14(2). In my view the distinction has no substance and I cannot accept the argument that either provision is to be interpreted as meaning "conclusive evidence". 9. Some slight support for this view is to be found in Pinson on Revenue Law (6th Edition) 486, where the learned author sets out the ways in which disputes with respect to liability to death duties may be resolved judicially in England, for he treats it as a matter of course that an action by the Crown for recovery of estate duty may be defended and indicates that there is no limitation on the issues which may then be disputed. 10. I am led to the conclusion that the Appellant was entitled to raise by way of defence matters which he could have raised, but did not raise, by way of appeal under s.22. For these reasons I think that the Defence should not have been struck out and that the appeal should be allowed. As, I understand, Pickering, J. has reached the same conclusion, it is not necessary to hear Mr. Litton in reply upon the other points which he raised in the appeal. 16th January 1976. Representation: IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO. 47 OF 1975 -----------------
Coram: Briggs, C.J., Huggins and Pickering, JJ. Date of Judgment: 16 January 1976 ----------------- JUDGMENT ----------------- Briggs, C.J.: This is an appeal from an order made by a judge of the District Court striking out the defence under Order 18 rule 19 in proceedings brought by the Commissioner of Estate Duty for the recovery of estate duty under section 14 of the Estate Duty Ordinance (Cap.111). 2. The appellants are the administrators of the estate of one Khiamal Lalchand Nanwani who died on December 18th, 1966. The Commissioner assessed the duty payable on his estate at $920,000 under the provisions of section 14(15) of the Estate Duty Ordinance and, in addition, imposed a penalty of the like amount under section 16(1) of that Ordinance. 3. The Commissioner issued a notice of assessment dated June 21st, 1974 for the amount with interest, under section 14(15) of the Ordinance. By section 14(15A) of the Ordinance, the duty was payable one month after the notice of assessment was given. 4. Section 22(1) of the Ordinance gives a specific but limited right of appeal to the Supreme Court to "any person who is aggrieved by ...... an assessment of the Commissioner under section 14(15) as the amount of estate duty payable ......". The section then mentions specific instances of possible complaints to the assessment made by the Commissioner; such as that property has been included in the assessment which should not have been so included, that property has been wrongly valued or that the wrong rate of duty has been charged. All those matters deal solely with the amount of duty that has been assessed to be payable. 5. There are further restrictions on the right of appeal confined by this section as to security and the appeal must be lodged within three months from the date of the notification of the assessment. 6. The appellants did not avail themselves of this right of appeal. Accordingly, the Commissioner instituted proceedings for the recovery of the amount payable under section 14(1) of the Ordinance:-
7. The Commissioner claimed the amount of duty assessed together with the penalty imposed. In addition, he claimed interest. The total sum claimed at the time proceedings were brought in the District Court came to $2,394,571.20. In addition, the Commissioner claimed certain fees and costs. 8. On April 28,1975, the appellants filed a defence to this claim. That the defence was ordered to be struck out under Order 18 and Order 19 on July 21st, 1975. And this is an appeal against that order. 9. The proposed defence is before this court. The first two paragraphs need not concern us as they have been abandoned. The other paragraphs of the defence deny that the Commissioner has correctly valued the estate for the purposes of assessing the duty. Examples of the manner in which this valuation was made are given and it is alleged that the estate is not liable for any estate duty at all since it was insolvent. In short, the defence relates to matters of valuation and accountability. 10. The subject matter of this defence could clearly have been raised by way of an appeal to the Supreme Court under section 22 of the Ordinance. But it was not. 11. The reasons for striking out the defence were given by the District Court Judge in a written judgment. 12. In effect, he said that he had no jurisdiction to deal with the matters contained in the defence; that the proceedings before him were proceedings brought under section 14(2) of the Ordinance which was a revenue collection section and in such proceedings it is not open to a defendant to raise questions relating to the assessment. If persons on whom a notice of assessment of duty have been served wish to challenge that assessment of duty they must do so by way of an appeal to the Supreme Court under section 22 of the Ordinance. 13. In proceedings brought under section 14(2), the defendant has a right to defend but it is a limited right and he cannot raise matters in those proceedings which he could have raised in an appeal brought under section 22 of the Ordinance. The district judge gave as an example of a possible defence a mathematical error in the calculation of the assessment. 14. In my view, the district judge was right. It has been urged by the appellant that section 22 of the Ordinance only provides for an alternative remedy: that 'a person aggrieved' need not appeal against an assessment under section 22 but can, if he so wishes, wait until the Commissioner brings proceedings under section 14 and then raise the issue of a wrong assessment 15. From the actual wording of the Ordinance, I do not think that that can be so. Section 22 of the Ordinance is perfectly clear. It gives a limited right of appeal against an assessment to the Supreme Court. Section 14(1) is quite a different matter: it is a revenue collection section and is obviously intended to apply after an assessment has been finalised. Jurisdiction is specifically given to the District Court under this section even for such an enormous sum as is being claimed here. 16. The doctrine that very clear language must be used in order to oust the jurisdiction of the Court was prayed in aid of the appellant in this case. I do not think that that doctrine is applicable here. There is no question of ouster of jurisdiction. An appellant only has such a limited right of appeal as is given to him in the Ordinance. And that is contained in section 22 of the Ordinance which deals only with the specific matters raised therein, accountability, assessment and rate of duty. Section 14 deals with the recovery of duty already assessed. And jurisdiction is given in separate courts. 17. Great reliance was placed on the use in section 14(2) of the words "the production of a certificate signed by the Commissioner stating the name and last postal address of the person sued and the particulars of the duty, interest or penalty claimed from him shall be prima facie evidence of the facts stated thereon." 18. It was suggested that these words meant that it would be open to the person sued to raise questions coming within the ambit of what is covered in section 22 of the Ordinance. I do not think that that is correct The Legislature cannot have intended to allow either the Supreme Court or the District Court to decide on the correctness of the assessment and the question of accountability. It cannot have intended that a matter for which an appeal was provided to the Supreme Court to be raised as a matter of defence in the District Court. The matters of assessment and accountability are clearly distinguished in the Ordinance from the matter of the recovery of the duty assessed. The latter being entrusted to the District Court, and the former being given to the Supreme Court. 19. There may, of course, be defences to a suit brought by the Commissioner under section 14. Various examples were given by Mr. Lee, who appeared for the Commissioner. These include a mathematical error on the face of the certificate, that an appeal under section 22 is pending or that no proper service has been effected. And this is not intended as an exhaustive list. But, in my view, what the defendant cannot raise in his defence to proceedings brought under section 14 is any point which he should have taken within the limits of the right of appeal given by section 22 of the Ordinance. Indeed, if section 14 gives the right to the defendant to raise the issues mentioned in section 22 in the District Court, why have section 22 at all? Why give jurisdiction to the Supreme Court and why limit the time of bringing the appeal? 20. Commissions were made by counsel with the wording in other enactments of a similar nature. But it is with this Ordinance, Cap. 111, which we are concerned. And I myself found such comparisons of little help, though it must be admitted that in some instances quoted to the Court the words used in other statutes made the position even more clear than it is in the present case. The Legislature has clearly prescribed the particular mode of appeal and that mode must be adhered to. (See R. v. Swansea Income Tax Commissioners(1)). 21. This same point was decided by Cons, D.J., as he then was, in the case of Estate Duty Commissioner v. Chan Hay etc.(2) and he decided it in favour of the Commissioner. I think he was right. 22. A further point was raised by Mr. Litton, Q.C. The proceedings were brought under Order 18 rule 19. Paragraph 2 of the rule states that in such an application to strike out a pleading, no evidence shall be admissible. However, in the proceedings before the District Court, the Notice of Assessment and a certificate containing the information mentioned in section 14(2) of the Ordinance appear to have been placed before the court. If this were so it clearly offends against the provisions of the rule. However, I do not think that that makes any difference in the present case. In my view, there was no jurisdiction in the District Court to deal with the proposed defence. It follows that I am of the opinion that this appeal must be dismissed.
Representation: Litton, Q.C. & K.H. Woo (P. Mo & Co.) for appellants. P.K. Lee for respondent. (1) (1925) 2 K.B. 250. (2) (1966) D.C.L.R. 129. IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO. 47 OF 1975 (ON APPEAL FROM V.D.C. NO. 6740/74) -----------------
----------------- Coram: Briggs, C.J., Huggins and Pickering, JJ. Date of Judgment: 16th January, 1976. ----------------- JUDGMENT ----------------- Pickering J.:- The Appellants' move for an order that the decision of His Honour Judge Jones, that the defence of the Appellants to the Respondent's claim herein be struck out and that the Respondent be at liberty to enter judgment in the sum of $2,394,571.20 and costs, be reversed. 2. The assessment in the above amount was made by the Respondent, upon the Appellants, as administrators of the estate of a deceased. It is the contention of the Respondent that since the Appellants did not appeal against his assessment within three months from the date of its notification, in accordance with Sec. 22(1) of the Estate Duty Ordinance, they were debarred from disputing the assessment in the proceedings in the Court below which proceedings were for recovery of the assessed amount under Sec. 14(1) of the same Ordinance. The learned judge took the view that the production to him by the Respondent of a certificate signed by the Respondent and stating the name and last known postal address of the Appellants and giving particulars of the duty claimed, debarred the Appellants from contesting the certificate upon the merits of the case. 3. It may be useful to set out the provisions of Sec. 22(1) and 14(1) & (2) of the Estate Duty Ordinance, Cap.111:
4. The application to strike out the defence was made in the Court below under O.18 r.19, sub-rule (2) of which provides that no evidence shall be admitted in an application under that rule. The first contention of the Appellants is that the judge did in fact wrongly admit evidence in the form of a copy notification of assessment and also the certificate contemplated by Sec. 14(2). These documents certainly were handed up to the learned judge but Mr. Lee, for the Crown, draws a distinction between the process involved in having a defence struck out and in that of entering judgment thereafter. He states, very fairly, that he cannot remember if he handed these documents up to the judge before or after the judge had ordered the defence to be struck out, but makes the point that the two documents were unnecessary for the judge to reach the decision as to striking out though they were necessary for the purpose of giving leave to enter judgment. Certainly, in the course of his written decision the learned judge found certain facts as to the amount of the duty, penalty and interest assessed upon the Appellants. That written decision, however, was dated some six days after the hearing, and it is entirely possible that the findings of fact were incorporated by the learned judge days after the hearing and upon the basis of documents which had been handed to him only in connection with the application for leave to enter judgment. On such evidence as is before us we are unable to say that the learned judge did improperly admit evidence upon that part of the summons before him which related to the striking out of the defence. 5. The second point made by Mr. Litton, for the Appellants, is that the learned judge was incorrect, having ordered the defence to be struck out, to go on immediately to give leave to sign judgment. Mr. Litton contends that he has a perfectly viable defence based on the Commissioner's powers or lack of them. Unfortunately for the Appellants, however, that defence was never before the learned judge and the matters which were before him in the written defence of the Appellants all related to the accountability of the Appellants, or the valuation of estate so that, having ruled that he had no jurisdiction to hear arguments on the merits of these matters, the learned judge was correct in giving leave to enter judgment for he had ordered to be struck out, the only defence then within sight and the summons before him also asked for leave to enter judgment. If Mr. Litton has indeed a viable defence not confined to the three matters mentioned in Sec.22, i.e., accountability, valuation and rate of duty, that defence was not made known to the learned judge and, having ordered the only defence then extant to be struck out, he could not be expected to hold his hand in case some, as then unrevealed grounds of defence, should subsequently be thought of. 6. We were referred to various decided cases under the Income Tax Legislation in England and to one under the Revenue laws of Aden but I am far from sure that these assist us. It was Mr. Lee's contention that although the English legislation contains no equivalent of Sec. 75(4) of our Inland Revenue Ordinance, the Courts had nonetheless found themselves unable, at the stage when the Commissioner of Inland Revenue had issued a writ for recovery of the tax alleged to be due, to enter into the merits of the defence where the avenue provided for appeal against the assessment had not been pursued. Sec. 75(4) reads:
It will be seen that this sub-section is in far more express terms than is Sec.14(2) of the Estate Duty Ordinance, but we are here concerned with estate duty and more significant, to my mind, than the fact that the English legislation contains no equivalent of Sec. 75(4) of the Inland Revenue Ordinance is the fact that the legislation contains no equivalent of Sec. 14(2) of our Estate Duty Ordinance. That is to say there is no provision in the English legislation which provides for the production by the Commissioner of a certificate which will be "prima facie" evidence of the correctness of his assessment. The Courts in England have not been bedevilled by this concept of a certificate constituting prima facie evidence. 7. It is significant that Sec.22 of the Estate Duty Ordinance does not say that "a person aggrieved" shall be debarred from defending under Sec. 14 unless he has appealed under Sec. 22. What then, do the words "prima facie" in Sec. 14(2) mean? They cannot, with respect to the learned trial judge, bear the meaning which he ascribes to them for, having ruled that he could not consider any defence on the merits, he went on to say, "If a mathematical calculation is obviously wrong it can be challenged. Subject to limitations of this nature it (Sec. 14(2)) does not enable the defendants to raise arguments upon wider issues as is envisaged in the defence that has been filed." But if no defence upon the merits is possible, what is the justification for interfering with the Commissioner's mathematical calculations and what is embraced by the term "limitations of this nature"? What precisely is the field within which the Court can interfere with the Commissioner's certificate? If the learned judge be correct that there can be no defence upon the merits, there can be no such field and any attempt to create one is an attempt to legislate. What then is the meaning to be ascribed to the words "prima facie evidence"? Clearly some meaning has to be attributed to the phrase. 8. Prima facie, "prima facie" means prima facie and, if that be a blinding glimpse of the obvious, I make no apology for it. Certainly nothing that has been urged before us persuades me that in the context of Sec.14, "prima facie" means "conclusive". The expression used is "prima facie evidence", but prima facie evidence is not the same thing as proof; rather is it evidence which, if uncontradicted and believed, would establish the Commissioner's claim. Conclusive evidence, on the other hand, is that which excludes the possibility of the truth of any other hypothesis than the one attempted to be established. 9. If the taxpayer is to be given no opportunity to contradict the prima facie evidence because the Court has no jurisdiction to hear him, it is no longer prima facie evidence; it is conclusive provided only that it is believed. Quite apart from the fact that if jurisdiction is to be whittled down that process can only be effected by the clearest language, it is precisely because the certificate is described as "prima facie evidence" that the Court must logically have jurisdiction to entertain an attempted contradiction of that evidence. If the intention was to oust the jurisdiction of the Court, why not say so? The use of the expression "prima facie evidence" is deliberate and I see no warrant for according to the phrase any meaning other than its ordinary meaning. 10. If it were the intention of the Legislature that the scheme of the act was to be assessment, appeal under Sec.22 or, if no appeal, absolute liability, followed, if necessary, by collection under Sec.14, it would have been simple to say so. The inability of the taxpayer to contest the Commissioner's assessment, except upon such matters as identity at the stage of an action for collection has been made perfectly clear in the Inland Revenue Ordinance by Sec.75(4) of that Ordinance. Had the same intention existed in regard to the Estate Duty Ordinance it could and should have been made manifest. 11. If it were the intention that no defence upon the merits was to be possible in an action taken by the Commissioner under Sec.14 of the Ordinance, the Legislature had at least three opportunities of making that clear. First, Sec.22 could have provided in terms that failure to appeal to the Supreme Court (or the District Court as applicable), within three months from the date of the notification of the decision or assessment, would result in liability becoming absolute. Secondly, it would have been possible, in Sec.14, to have stated that the production of the Commissioner's certificate was to be not merely "prima facie" evidence but "conclusive" evidence. Lastly, the Estate Duty Ordinance could have incorporated a provision similar to Sec.75(4) of the Inland Revenue Ordinance. None of these opportunities was taken and the Crown are left to rely upon the expression "prima facie evidence" in Sec.14. The statute, however, is a taxing statute and, as such, falls to be interpreted in favour of the taxpayer. 12. I would allow the appeal, reverse the decision of the learned trial judge and remit the case to the District Court for trial with costs in this Court to the Appellants. The costs of the action in the District Court to be dealt with by the trial judge.
Representation: Litton, Q.C. & K.H. Woo (P. Mo & Co.) for Appellant. P.K. Lee, C.C. for Respondent. |
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