Barend Ltd v. The Collector of Stamp Revenue

DCSA 14/2024

[2025] HKDC 1777

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

STAMP APPEAL NO. 14 OF 2024

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DECISION

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1.This is the Appellant’s Summons dated 25 September 2025 for an order, inter alia, that:

a)  The Notice of Appeal dated 20 December 2024 (the “Initial Notice of Appeal”) be withdrawn;

b)  The Appellant’s Summons dated 23 May 2025 for leave to set down for stamp duty appeal hearing (the “Application for Leave to Set Down”) be withdrawn; and

c)  The Appellant be granted leave to appeal out of time against the Notice of Stamp Duty Assessment & Demand for Payment dated 29 November 2024, and be granted leave to accordingly file a new Notice of Appeal within 14 days of the Order (the “Leave Application”).

Background

2.The Appellant, having received the Notice of Stamp Duty from the Respondent, filed the Initial Notice of Appeal and a postponement of payment of stamp duty application (the “Postponement Application”) on 20 December 2024.

3.On a hearing on 6 January 2025, the court dismissed the Postponement Application.

4.The Appellant paid the Stamp Duty on 17 April 2025.

5.On 23 May 2025, the Appellant took out the Application for Leave to Set Down.

6.The Appellant took out the current Summons, including the Leave Application, on 25 September 2025.

Legal Principles

7.Section 14 of the Stamp Duty Ordinance, Cap 117 (“SDO”) provides:

“(1) Any person who is dissatisfied with the assessment of the Collector under section 13 or 47L may—

(a) within a period of 1 month from the date on which the assessment is made or within such further period as the court may allow under subsection (5B);

(b) subject to any order of the court under subsection (1B), on payment of the stamp duty in conformity therewith or, where payment of the stamp duty or any part thereof is allowed to be postponed under subsection (1A), on payment of the part (if any) of the stamp duty the payment of which is not thus allowed to be postponed…

…

(1B) Where the court, on an application made by the person intending to serve a notice under subsection (1), is satisfied that it would impose hardship on the person to require him to pay the stamp duty or the part of the stamp duty, as the case may be, under subsection (1)(b), it may by order allow the appeal to which the notice relates to be brought—

(a) without payment of the stamp duty or the part of the stamp duty, as the case may be, under subsection (1)(b), or only on payment of such part of the stamp duty or the part of the stamp duty, as the case may be, as the court may consider reasonable in the circumstances of the case…

…

(5B) Where the court, on an application made by a person who is dissatisfied with an assessment of the Collector under section 13 or 47L, is satisfied that the person was prevented by illness or absence from Hong Kong or other reasonable cause from bringing an appeal within a period of 1 month from the date on which the assessment is made in accordance with subsection (1), the court may by order allow the appeal to be brought within such further period as it may consider appropriate.”

8.In other words, it is clear that the stamp duty as assessed has to be paid before an appeal can be made unless the court ordered a postponement under subsection (1B).

9.And when an application to postpone payment is made under subsection (1B), if the court “is satisfied that” payment of such “would impose hardship…”, it “may by order allow the appeal…to be brought…without payment of the stamp duty…”.

Considerations

10.When the Court dismissed the Postponement Application on 6 January 2025, the court in effect also did not “allow the appeal to be brought”.

11.More importantly, it should be very clear to the Appellant at this point of time that the Stamp Duty was immediately owing.

12.However, the Appellant did not pay Stamp Duty until more than 3 months later on 17 April 2025. He then made the Application for Leave to Set Down on 23 May 2025, claiming that he did not have legal advice at the time and thought that the Initial Notice of Appeal was still effective.

13.Even without legal advice, it should be obvious that this could not be the correct law. Otherwise, anyone who was required to pay Stamp Duty could simply file a notice of appeal and an application to postpone payment, and even when the latter failed, one could delay payment for any length of time whilst retaining the right for the appeal upon eventual payment. This would have made a mockery of the intention of the right to appeal under section 14(1).

14.Irrespective of any legal knowledge, the Appellant should have paid the Stamp Duty without delay after the dismissal of the Postponement Application. If it then applied under subsection (5B) for leave to bring an appeal out of time, it might be able to provide “failed Postponement Application” as a “reasonable cause” why the appeal was not brought “within 1 month from the date the assessment is made in accordance with subsection (1)”.

15.Of course, if all that was done, the court might consider whether all the circumstances amount to a “reasonable cause” and make whatever order “considered appropriate”.

16.As it happens, the Appellant only instructed solicitors in June 2025 and upon advice of counsel in September 2025, took out the present Summons, including the Leave Application under subsection (5B).

17.The legal principles for an application under subsection (5B) is trite: it is a 3 stage test (Re Wan Wah Shing [2005] 4 HKLRD 674):

a)  The court has to be satisfied that the intended appellant suffers from illness, has been absent from Hong Kong or has other reasonable cause.

b)  The intended appellant has to show that one or more than one of the above three factors prevented him from bringing an appeal within the statutory time limit.

c)  Even if 1 and 2 are satisfied, the court still has a residual discretion on whether to grant a time extension.

18.The Appellant is relying on “reasonable cause” as the first two factors clearly do not apply.

19.The Appellant submits that it has filed the Initial Notice of Appeal in time, but the delay of the current Summons was because of a misunderstanding of the law and some miscommunication (with a judiciary staff). Such has caused the Appellant to believe that the Initial Notice of Appeal was still effective after the dismissal of the Postponement Application.

20.First of all, any misunderstanding or ignorance of the law (regarding the effectiveness of the Initial Notice of Appeal after the failed Postponement Application) can only explain the delay of the Leave Application from April to September 2025.

21.Of course, ignorance of the law, by itself, cannot be an excuse for non-compliance: Hongkong Yeewotong Venturepharm Technology Groups Limited v China Beijing Tong Ren Tang Group Co., Ltd & Anor [2025] HKCFI 2977.

22.In any case, the more important consideration is the delay in payment of Stamp Duty. As stated above, it must be clear to the Appellant that, having failed to apply to postpone the payment, it must pay without delay.

23.The Appellant claimed that it was a shelf company and did not have a bank account nor its own funds / bank account to pay the Stamp Duty.

24.This appears to be the same argument advanced by the Appellant during the Postponement Application. It was clearly against common sense that merely being “a shelf company having no bank account” could satisfy the court as a reason for “hardship” for an application of postponement under subsection (1B). I see no reason why the Stamp Duty could not be paid by anyone else on behalf of the Appellant. Indeed, the Stamp Duty was eventually paid by a “Clubdining International Limited” (as a loan to the Appellant) which happened to be the same company which provided funds for the transaction of the subject property in the first place.

25.Given that the Postponement Application was dismissed on this basis, I cannot see how the same line of argument can now be regurgitated as a “reasonable cause” under the current Leave Application.

26.Further, it is trite that “the time limit in section 14(1) must be strictly adhered to and the statutory allowance for extension of time under subsection (5B) should be strictly construed” (Diamond Dragon Finance Company v The Collector of Stamp Revenue (unrep., DCSA No 4 of 2004) and the Wan Wah Shing case above).

27.The Appellant has not provided any reasonable explanation nor evidence to show what has “prevented” payment without the delay of more than 3 months after the failed Postponement Application so that it was “prevented from bringing an appeal within the statutory time limit”.

28.Thus, even if the Appellant has brought the Leave Application immediately after payment of the Stamp Duty in April 2025 (instead of September 2025 in this case), the court would still not likely be satisfied that there was any “reasonable cause” for the failure to bring the appeal within the statutory time limit.

29.As such, the Leave Application must be dismissed.

30.As stated above, the Initial Notice of Appeal is ineffective so the application to withdraw it should be allowed. Similarly, the withdrawal of the Application for Leave to Set Down should be allowed.

Order

31.Accordingly, I will give Order in terms of paragraphs 1 and 2, and dismiss paragraph 3 of the Appellant’s Summons dated 25 September 2025.

32.The Appellant shall pay the Respondent’s costs of the Summons to be assessed by summary assessment if not agreed. The Respondent shall lodge and serve a summary bill of costs within 21 days of this Decision and the Appellant shall lodge and serve a summary list of objections 21 days thereafter. The court will assess costs summarily by way of paper disposal.

Mr Kevin Leung, instructed by Messrs Ko & Co., for the appellant

Ms Sanyi Shum, Government Counsel of Department of Justice, for the respondent