SUEN HUNG SHAN v. COMMISSIONER OF INLAND REVENUE

CACV 147/2020, [2023] HKCA 690

On appeal from [2020] HKCFI 1065

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 147 OF 2020

(ON APPEAL FROM HCIA NO 3 OF 2017)

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J U D G M E N T

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Hon Kwan VP (giving the Judgment of the Court):

1.  On 31 December 2020, we handed down our judgment (“CA Judgment”)[1] allowing the appeal brought by the Commissioner of Inland Revenue (“the Commissioner”) against the decision of G Lam J (as he then was) handed down on 11 March 2020 (“CFI Decision”)[2]. The taxpayer, Suen Hung Shan (“the Taxpayer”), who acted in person throughout, filed a notice of motion on 3 April 2023 seeking leave to appeal against the CA Judgment to the Court of Final Appeal. There is a very substantial delay of more than two years in taking out this application.

2.  The background to the litigation is set out in the CA Judgment at §§4 to 15.

3.  In short, the Board of Review (“the Board”) gave a decision that the Taxpayer’s notice of appeal was not given within time and no extension of time should be given (“the Board’s Decision”). The Taxpayer issued a summons in the Court of First Instance seeking leave to appeal against the Board’s Decision. The Commissioner issued a summons to strike out the Taxpayer’s summons and the grounds of appeal. By the CFI Decision, the Commissioner’s striking out summons was dismissed.

4.  The Commissioner’s appeal to the Court of Appeal raised the question whether the procedure for leave to appeal to the Court of First Instance against a decision of the Board would apply to a decision by the Board that a notice of appeal was not given within time and no extension of time should be given. The crux of the appeal was whether the leave to appeal procedure in section 69(1) of the Inland Revenue Ordinance, Cap 112 was engaged in the Taxpayer’s appeal against the Board’s Decision. The CA Judgment answered that question in the negative and ordered the Taxpayer’s summons and the grounds of appeal be struck out under the inherent jurisdiction of the court on the basis that there is no jurisdiction to give leave to appeal against the Board’s Decision on the proper construction of section 69(1).

5.  Pursuant to section 24(2) of the Hong Kong Court of Final Appeal Ordinance, Cap 484, an application for leave to appeal to the Court of Final Appeal should be made within 28 days from the date of the judgment to be appealed from. Under section 24(5), there is a discretion to extend time to apply for leave to appeal.

6.  The principles for granting extension of time for leave to appeal to the Court of Final Appeal are well established. The court would extend time only if good and sufficient grounds are shown by the applicant. In deciding whether there are good and sufficient grounds, the court is entitled to take into account: (a) the length of the delay; (b) the reasons for the delay; (c) the chances of the appeal succeeding if an extension of time is granted; and (d) the degree of prejudice to the other party if the application is granted[3].

7.  The Taxpayer filed an affidavit on 3 April 2023 seeking to explain his delay. The affidavit consists of three numbered paragraphs. The first two paragraphs mention the background. The remaining paragraphs read as follows:

“3. When furnished with CIR’s bill of costs, the applicant noticed that CIR charged him huge sum of costs (approx. HK$400,000). He heard from CIR’s taxing clerk Mr Tam that the sum is huge due to this is a novel case law “never in history” (史無前例) in the outcome of future legal proceedings. By checking recent Decisions from BOR [Board of Review], the applicant found that BOR stated in Case No D8/21, D10/21[4] which was published by BOR on Nov 2022 on BOR website, “This Board would not deal with the merits of the appeal at this hearing.” Realizing a permanent damage has been done to the legal system and This new case law will seriously affect all taxpayer in the coming future that BOR will not entertain any case which are not factually late.

The applicant took the risk to rectify the situation and now apply for a leave to appeal to the CFA. On 31 March 2023, the applicant issued a motion seeking leave from the Court of Appeal to vary the order it had made on the basis of the matters by reason of its great general or public importance under s 22(1)(b) of the Court of Final Appeal Ordinance, Cap 484.”

8.  We do not consider the above to be valid reasons for the very substantial delay of the Taxpayer in taking out this application.

9.  As for the proposed grounds of appeal in the Taxpayer’s submissions, we do not think they are reasonably arguable. We reject his contention that the CA Judgment had erred in deciding difficult points of law in a summary manner without going through a ‘full trial’ in the Court of First Instance or that inherent jurisdiction to strike out should not be invoked in these circumstances. He has not sought to engage the reasoning in the CA Judgment on the proper construction of the relevant provisions in Cap 112, nor has he identified any specific error in the CA Judgment with particulars. He merely repeated the contentions which have been rejected in the CA Judgment at §§68 to 73.

10.  For the above reasons, we refuse to exercise our discretion to grant an extension of time to appeal to the Court of Final Appeal. The notice of motion issued by the Taxpayer on 3 April 2023 is dismissed.

11.  We see no reason why costs of the application should not follow the event. The Commissioner seeks costs on an indemnity basis in view of the substantial delay and total lack of merits. It seems to us appropriate to award indemnity costs in the circumstances.

12.  The Taxpayer referred to a letter dated 5 January 2018 marked “without prejudice save as to costs”, stating that it “will be submitted in case there will be a cost issue”.

13.  In light of this submission, we will make an order nisi in respect of the costs order of this application and summary assessment. We order the Taxpayer to pay the Commissioner’s costs, summarily assessed on an indemnity basis at $24,887. If there is no application to vary the order nisi within 14 days of the handing down of this judgment, it will be made absolute.