Wong Yu Cho Rolly t/a Marco Polo and China Oversea Technical Development v. Ho Chi Sum and Another

HCA 2132/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2132 OF 2005

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BETWEEN

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Coram : Before Mr. Registrar C. Chan in Chambers

Date of Hearing: 12 May 2006

Date of Judgment: 30 June 2006

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J U D G M E N T

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This is an application by the Defendants to strike out the Plaintiff’s claim and dismiss the action.  It is one of those cases which I regard as unfortunate, where plaintiffs acting in person pursuing various claims, institute one action after another and incur more and more legal costs leading to a path of no return.  There are bound to be duplication of facts and issues.  The other side will almost invariably take the step which the Defendants in this case are now doing --- to strike out the Plaintiff’s claim.

Background

2.The Plaintiff is a very enterprising businessman who embarked upon different trades and carried on different businesses, among which are Marco Polo and China Oversea Technical Development.  He also operated a private museum called Hong Kong Museum of Stone Sculpture & Asian Art.

3.For some reasons on 24 August 2001 three tax inspectors of the 2^nd Defendant visited the Plaintiff’s premises known as Marco Polo Villa in Tai Po.  Subsequently, Notices of Assessment were issued in respect of two years of assessment on the profits of the following firms with taxes payable as follows:

(a) China Oversea Technical Development

(i)	$173,250.00	(1996/1997)
(ii)	$28,350.00	(1997/1998)
	$201,600.00

(b) Marco Polo

(i)	$346,500.00	(1996/1997)
(ii)	$283,500.00	(1997/1998)
	$630,000.00

4.The Plaintiff did not pay the taxes assessed.  On 16 August 2004, a Notice of Recovery was issued to different banks with the Plaintiff’s accounts frozen.  On 24 August 2004, the 2^nd Defendant by its Commissioner wrote to the banks requesting them not to take action upon the Notice on the ground that the 2^nd Defendant was considering the Plaintiff’s claims or objections to the assessments.

DCCJ Action No. 4492 of 2004

5.Two days after, on 26 August 2004 the Plaintiff commenced a District Court action under DCCJ Action No. 4492 of 2004 against the Inland Revenue Department, the 2^nd Defendant herein.  The 2^nd Defendant filed a Defence and Counterclaim on 24 September 2004.  On 20 October 2004, the Plaintiff took out a summons to request for extension of time of 14 days.

6.The summons was heard before Master Ko on 27 October 2004.  The Plaintiff alleged that the 1^st Defendant herein, Mr. Ho Chi Sum, Senior Government Counsel for the 2^nd Defendant had agreed to a stay of proceeding while the 1^st Defendant denied he had such agreement with the Plaintiff.  The 1^st Defendant maintained that after considering the special circumstances of the Plaintiff at that time he agreed to an extension of 28 days only and accordingly the order was made by Master Ko.

7.The Plaintiff alleged that because he was under the impression that the proceeding was stayed he did not file any defence to counterclaim.  Because of the default, the 2^nd Defendant entered judgment on the counterclaim i.e. the amount of tax assessed i.e. $831,600.00.

8.The Plaintiff applied to set aside the judgment before H.H. Judge Chow but was not successful.  He applied for leave to appeal which was refused on 9 September 2005.  He made further attempt to obtain leave from the Court of Appeal.  Again it was refused on 7 March 2006.

DCCJ Action No. 5016 of 2005

9.About a month after leave to appeal was refused by Judge Chow, he commenced two further actions, one in District Court DCCJ Action No. 5016 of 2005 and the other in High Court i.e. the present proceedings.

10.In the District Court action he claimed against the Inland Revenue Department and the 3 inspectors for trespass, invasion of privacy and wrongful entry to the Plaintiff’s residence.  The Defendants in that action have filed their defence and the action is still pending.  The Plaintiff states that the claim in that action is totally different from the present one and the cause of action is also different.  I make no comment thereon and for the purpose of the present proceeding I assume it is the case as the Defendants herein take no issue therein.

High Court Action No. 2132 of 2005

11.In the Statement of Claim in the present action he made reference to the events that happened at the hearing before Master J. Ko in DCCJ Action No. 4492 of 2004 on 27 October 2004.  He also alleged that there was an agreement between him and the 1^st Defendant herein and that the 1^st Defendant as well as the 2^nd Defendant was in breach of the agreement.

12.He also alleged that the 2^nd Defendant was in violation of the Basic Law, contravened the Human Rights and was negligent.  Because of this, the Plaintiff has “suffered and continued to suffer irreparable financial damages, economic loss and special damages”.  He gave no particulars of such violation or contravention or negligence.  I do not think I need go further into those empty allegations.

Plaintiff’s submission

13.The Plaintiff gave various reasons why I should not allow the Defendants’ application to strike out the present claim.  First, there was an application for stay of execution to be heard on 22 June 2006 in respect of DCCJ Action No. 4492 of 2005.  At the time of writing this judgment I was not informed of the result.  I do not consider that the stay of execution, even if successful, would affect my decision.

14.The Plaintiff stated that he was negotiating with the representatives of the 2^nd Defendant to settle the tax assessment and the amount of tax he has to pay.  The process of investigation is still going on.  The judicial proceeding is independent of the negotiation: unless agreement is reached, I do not consider that I should take note of it.

15.He also claims that the Secretary for Justice is investigating into the conduct of the different handling officers of this case.  Again I do not consider that the result of investigation will affect my decision.  Further, I do not have any evidence that such investigation is taking place.

16.The most important point raised by the Plaintiff is that the claim in this action is different from the claim in DCCJ 4492.  In DCCJ 4492, it was a claim about assessment of tax and an investigation into its reasonableness while in the present action it is a claim against the conduct of the 1^st Defendant, a legal officer, an agent for the Inland Revenue Department, the 2^nd Defendant.  He alleged that the officer had not fully disclosed the conversation between the Plaintiff and the 1^st Defendant outside Court and reported the agreement to Master J. Ko and that the officer had also misled Judge Chow at the hearing.

17.I accept the claim is different but the claim depends upon the facts that have been considered and decided by Judge Chow and then by the Court of Appeal at different times.  I cannot re-open the issue which has been decided involving the same parties: the doctrine of res judicata or issue estoppel applies.  It is obvious the claim in the present action must fail.

18.Accordingly, I strike out the Plaintiff’s claims against both Defendants and dismiss the whole action.  Pursuant to Order 42 rule 5B(6), I make an order nisi as to costs:

(a) That the costs of this action (including the costs of the application and all costs reserved) be to the Defendants to be assessed by me, if not agreed, with the following directions:

(i) That the Defendants shall at least 21 days before the hearing of the assessment file and serve a Statement of Costs in the form as suggested by me to the Law Society contained in Circular No. 06-2;

(ii) That the Plaintiff shall within 14 days thereafter file and serve a list of objections;

and  (iii)   That a date be fixed for hearing of the assessment with an estimated length of one hour.

(b) That this order shall become absolute 14 days after the date of this Judgment unless written application has been made to vary this order within the said 14 days.

Wong Yu Cho Rolly, Plaintiff in person.

Mr. Newton Chan, Senior Government Counsel of Department of Justice for Defendants.