RE DAVID GERARD GOLDBERG QC

HCMP 3016/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3016 OF 2014

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REASONS FOR JUDGMENT

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1.  This was an application for the ad hoc admission of Mr David Goldberg QC for the purposes of advising and appearing on behalf of Mr Koo Ming Kown and Mr Tadao Murakami in two related tax appeals fixed for 26 to 30 January 2015 before the Inland Revenue Board of Review (BR 16/13 and BR 17/13).

2.  The tax appeals raise a number of issues, including an issue of construction of section 82A of the Inland Revenue Ordinance (Cap 112), and another issue concerning the source of revenue.

3.  Section 82A empowers the Commissioner to assess additional tax against a director of a company personally who has, without reasonable excuse, made an incorrect return by omitting or understating anything in respect of which he was required by the Ordinance to make a return “either on his behalf or on behalf of another person [ie the company]”.

4.  Mr Russell Coleman SC, who has been briefed to appear for the two appellants in the tax appeals, submitted in support of the admission application that the case is of unusual difficulty and complexity as regards the two issues; those issues arise in the context of a specialist area of tax law, an area in which Mr Goldberg, a London tax specialist well known in this jurisdiction, is in a position to add a significant dimension to the case; the proper construction of section 82A has never been addressed directly by the local courts such that its determination would make a significant contribution to local jurisprudence and there is a strong likelihood that the case may end up in the Court of Final Appeal; local senior counsel has been instructed; and in all the circumstances, it is in the public interest to grant the admission.

5.  The application for admission was opposed both by the Bar and by the Secretary for Justice.  In short, they disputed the points raised by Mr Coleman.  On behalf of the Bar, Mr CY Li SC (Mr Martin Kok with him) also pointed out in their written submissions that there had been a delay of more than one year in the making of the application for admission.  For the Secretary, Mr Mike Lui reminded the court that there was no evidence of any genuine efforts to approach local senior counsel specialised in tax matters to advise and represent the appellants in the tax appeals.

6.  The general principles relating to this type of admission are well established: Re Flesch QC [1999] 1 HKLRD 506; Re McGregor QC [2003] 3 HKLRD 585.  The parties have also helpfully referred to a number of more recent cases decided by this court which elaborated on some aspects of the court’s discretion on admission and how that discretion should be exercised in terms of the public interest.  There is no need to recite any of these principles.

7.  The question of construction concerning section 82A will shortly be before the Board of Review, and I will not say anything unnecessarily relating to the proper interpretation of the section which might have the effect of interfering with the Board’s determination of that issue, or give any such appearance.  I have been given, in the written submissions, an outline of the arguments or questions that, counsel submitted, might arise in the determination of the construction issue.  I am not convinced, as presently advised, that the issue is an unusually difficult or complex one. No doubt, the Board will have to construe section 82A in the light of the relevant purpose and context of the provision and the Ordinance as a whole, bearing in mind the actual language used.  Undoubtedly, the Board will have to take into account, where relevant, principles of company law and the law of agency.  However, it was not suggested that section 82A was based on any English legislation, and that, therefore, a tax specialist from the United Kingdom would stand in a better position than a local silk in assisting the Board to resolve the construction issue.  Obviously, a good knowledge of the local tax regime would be an advantage in assisting the Board to arrive at the correct interpretation.  But then it was not suggested that experienced senior counsel like Mr Coleman himself (and besides him, there are, of course, tax specialists in Hong Kong) could not render the necessary assistance to the Board competently and skilfully.

8.  Judging from the intended arguments outlined to me, I believe the construction issue is one which suitable local senior counsel is fully capable of handling before the Board of Review.

9.  As for the possible wider significance of the issue, it has to be borne in mind that it is now only before the Board of Review, whose decision, although widely respected, is not the same as that of the High Court or the Court of Final Appeal.  Whether, if the matter should go further, it would merit the admission of an overseas specialist to assist the court, is a matter for another day.  At this stage, without knowing what the decision and reasons of the Board will be, it is simply premature to say whether the issue involved might ultimately justify the involvement of overseas counsel.

10.  I echo Mr Li’s concern about the delay.  There has been no explanation for the lengthy delay. The court was told that Mr Goldberg became involved in the background of this matter at an early stage, but there was no explanation as to why his admission application was not made earlier.

11.  The question of cross‑fertilisation does not really arise here, for, as I have explained, Mr Coleman, with respect, is more than capable to handle the construction issue before the Board.

12.  As for the source of revenue issue, it was a very late addition, which had not even been mentioned in the counsel’s certificate.  No doubt, “source” can be a very complicated and difficult issue in some cases, but it all depends on the facts.  Very little in relation to this point in the present case has been made known to the court.  The burden being on the part of the applicant to satisfy the court that it was in the public interest to grant the admission, this last minute addition simply did not help.

13.  For all these reasons, the application for admission was dismissed at the conclusion of the hearing.