Commissioner of Estate Duty v. Veena Khiamal Nanwani and Another

DCCJ006740/1974

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 6740 OF 1974

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Coram: Judge Jones, D.J. in Chambers.

Date of Judgment: 21st July 1975 9.30 a.m.

Mr. William Lee (Legal Dept.) for Plaintiff.

Mr. Cheung of (Peter Mo & Co.) for both Defendants.

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DECISION

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1. This is an application by the Commissioner of Estate Duty for an order that the defence be struck out under Order 18 Rule 19 of the Rules of Supreme Court and under the inherent jurisdiction of the Court on the ground that it discloses no reasonable defence.

2. The defendants are the administrators of the estate of Khiamal Lalchand Nanwani alias Kheomal Lalchand alias L. Khiamal alias Lalchand Khiamal who died on the 18th December 1966. Letters of Administration were granted to the defendants on the 8th August 1972.

3. Duty payable on the estate was assessed at $920,000.00. Under S.16(1) of the Estate Duty Ordinance a penalty of $920,000.00 was imposed and together with interest the total sum claimed is $2,394,571.20.

4. A defence was filed on the 29th April 1975 and the present summons was issued on the 4th July 1975.

5. Mr. Lee for the Commissioner submits that Section 14 of the Estate Duty Ordinance provides the machinery for the recovery of estate duty. By S.14(1) all duty, interest and penalties payable shall be recoverable in the District Court notwithstanding that the amount exceeds the Court's jurisdiction of $20,000. Sub-Section 2 provides that a certificate signed by the Commissioner is prima facie evidence of the facts stated therein. These facts include the amount of duty, interest or penalty claimed.

6. Pursuant to Section 14(15) of the Estate Duty Ordinsnce a notice of assessment dated the 21/6/74 was issued by the Commissioner. The duty was payable one month after the giving of the notice. Section 22(1) of the Estate Duty Ordinance provides that anyone who is aggrieved by a decision of the Commissioner under Sub Section 15 of Section 14 may subject to certain conditions appeal to the Supreme Court within three months from the date of notification of the decision or assessment.

7. No appeal was lodged by the defendants within the time limit allowed with the result that the present proceedings for recovery were instituted by the Commissioner under Section 14.

8. Mr. Cheung for the defendants submits that Section 22 only provides an alternative remedy, and does not exhaust all the remedies of an aggrieved tax payer. He therefore contends that although Section 14 is primarily available for the recovery of duty payable it is still nevertheless open to the defendants to file a defence and to argue the case upon the merits.

9. In construing the words "prima facie evidence" in Section 14(2) of the Estate Duty Ordinance Mr. Cheung drew my attention to the similar provision for recovery of tax under the Inland Revenue Ordinance viz Section 75(3). The words used in this section are "sufficient evidence".

10. I do not attach any significance to this difference in respect of this application. So far as S.14(2) is concerned in my judgment it means prima facie evidence of the facts mentioned e.g. if a mathematical calculation is obviously wrong it can be challenged. Subject to limitations of this nature it does not enable the defendants to raise arguments upon wider issues as is envisaged in the defence that has been filed.

11. For these matters to be considered the defendants are obliged to follow the procedure that is set out in Section 22 by way of appeal to the Supreme Court. I agree with Mr. Lee that the function of Section 14 is to provide the Commissioner with machinery for the recovery of duty payable and it does not permit a defence to be filed for issues to be tried. The District Court clearly has no jurisdiction to determine such matters except where the amount in dispute does not exceed $100,000 when an appeal would lie under Section 22(1B). However, this point is not relevant for the determination of the summons before me.

12. Having regard to my finding it is unnecessary for me to comment upon the merits of the defence. As a result the defence will be struck out, and the Plaintiff is given leave to enter judgment for the amount of the claim together with costs and the costs of this application to be taxed on the upper scale.

Representation:

Mr. William Lee (Legal Dept.) for Plaintiff.

Mr. Cheung of (Peter Mo & Co.) for both Defendants.