HONG KONG FLOUR MILLS LTD v. COMMISSIONER OF INLAND REVENUE

HCAL707/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO.707 OF 2001

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J U D G M E N T

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Introduction

1. The applicant in this matter is a company incorporated in Hong Kong and carrying on business here. As its name implies, its principal activity is the production and distribution of flour products. The applicant is one company within a group of companies. More particularly, it is a wholly owned subsidiary of Lam Soon Food Industries (BVI) Limited, this BVI company being itself a wholly owned subsidiary of Lam Soon Food Industries Limited, a company incorporated in Bermuda and listed on the Hong Kong Stock Exchange.

2. Another company in the group, also a wholly owned subsidiary of Lam Soon Food Industries (BVI) Limited, is Lam Soon Trademark Limited. It is incorporated in the Cook Islands. As its name implies, its principal business is the ownership of trademarks and the granting of licences to third parties for the commercial exploitation of those trademarks.

3. In 1992, an agreement was entered into between the applicant and Lam Soon Trademark Limited. In terms of that agreement, the applicant agreed to pay royalties to Lam Soon Trademark Limited in return for the right to use certain of its trademarks.

4. Although Lam Soon Trademark Limited has not at any material time carried on business in Hong Kong, it has nevertheless been liable to pay tax on royalties received by it for the use of its trademarks within this jurisdiction. This is pursuant to s. 20A, as read with s. 15(1), of the Inland Revenue Ordinance, Cap. 112 ('the Ordinance').

5. So that such tax may be collected at source, the applicant has been liable to deduct what is due from the royalties payable to Lam Soon Trademark Limited and to hold those funds for payment of tax. This is pursuant to s. 20B of the Ordinance, subsections (2) and (3) of which read :

" (2) .... the non-resident person is chargeable to tax .... in the name of any person in Hong Kong who paid or credited those sums to that or any other non-resident person, and the tax so charged shall be recoverable by all means provided in this Ordinance from that person in Hong Kong.

(3) Where a person in Hong Kong from whom tax is recoverable by virtue of this section pays or credits to a non-resident person .... he shall, at the time he makes the payment or credit, deduct from those sums so much thereof as is sufficient to produce the amount of such tax, and he is hereby indemnified against any person in respect of his deduction of such sum."

6. The non-resident person (in this case, Lam Soon Trademark Limited) is chargeable to tax therefore but is chargeable in the name of the Hong Kong person responsible for payment of royalties to it (in this case, the applicant).

7. On 17 November 1994, the Commissioner of the Inland Revenue Department ('the Commissioner') sent notice to the applicant that it should submit a tax return, this being a final assessment for the 1993/1994 tax year, together with a provisional assessment for the 1994/1995 tax year. The notice was headed : 'Profits tax return - in respect of non-resident persons' and commenced in the following terms :

" In the matter of Lam Soon Trademark.

Pursuant to section 20A/20B of the Inland Revenue Ordinance (Cap. 112), the above named non-resident person is chargeable to profits tax in your name in respect of the non-resident person's assessable profits arising from or derived from a trade, profession or business carried on in Hong Kong.

By virtue of section 15(1) of the Ordinance (Cap. 112), you are hereby required to make on this form a true and correct return of the assessable profits made by the above named non-resident person ...."

8. It will be seen that in identifying the non-resident person chargeable to tax, the Inland Revenue Department omitted the word 'Limited' from the name Lam Soon Trademark Limited.

9. On 16 January 1995, the applicant completed the return, giving a statement of assessable profits. At the time, those representing the applicant clearly believed that the return was required in respect of Lam Soon Trademark Limited arising out of that company's 1992 licensing agreement with the applicant. Accordingly, in completing the return, the full title of the non-resident together with its address was given; namely :

"Lam Soon Trademark Limited

Equitor House, Tutakimoa Road

Rarotonga, Cook Islands".

10. On 13 March 1995, the Commissioner issued a notice of assessment. That notice was addressed as follows :

"Hong Kong Flour Mills Ltd for Lam Soon Trademark".

11. The tax assessed for the 1993/1994 tax year was $1,484,333 while the provisional tax assessed for the 1994/1005 tax year was $1,399,608, the total sum being $2,884,041.  I am told that the tax was assessed at the corporate rate.

12. Despite the tax chargeable to the non-resident person being assessed at a corporate rate, for a second time - this time on the assessment document itself - the Commissioner omitted the word 'Limited' from the name of Lam Soon Trademark Limited. However, no objection to the assessment was taken and the tax was duly paid. It must follow, in my view, that at the time the applicant's authorized officers, in paying the tax, understood that the tax had been assessed and was payable in respect of Lam Soon Trademark Limited, the company with which it had entered into a licensing agreement.

13. Some five years later, the omission of the word 'Limited' from the notice of assessment was noted and action taken in regard to that omission. On 31 March 2000, the applicant's accountants, Ernst & Young, wrote to the Commissioner to the following effect :

".... On behalf of our abovementioned client, we apply under Section 79 of the Inland Revenue Ordinance for refund of all the profits tax and provisional profits tax paid under the notice of assessment for 1993/94 and notice for payment of provisional profits tax for 1994/95 ....

Our client advised that during the year of assessment 1993/94 our client did not act for any entity the name of which is 'Lam Soon Trademark'. Our client therefore paid the profits tax and provisional profits tax by error. Our client is therefore entitled to refund of all the taxes paid under Section 79 of the Ordinance." [my emphasis]

14. On 22 June 2000, the Commissioner replied :

" It may seem that there is an error of form in the Profits Tax Returns and assessments issued as they only showed the name of Lam Soon Trademark [LST] and NOT Lam Soon Trademark Limited [LSTL]. The assessments were issued with the common intent and understanding that LST was equivalent to LSTL. Besides, the assessments were in substance and effect in accordance with the intent and meaning of the Ordinance to assess the royalty paid by your client to LSTL. Such assessments should, pursuant to the provision of Section 63 of the Inland Revenue Ordinance (Chapter 112), not be void by reason of want of form or be affected by mistake or omission therein. ...."

15. Further correspondence ensued, Ernst & Young pressing for a final decision of its application made under s. 79 of the Ordinance. That decision was given on behalf of the Commissioner on 31 January 2001 in terms of a letter which read :

" Please be confirmed that the Commissioner is not satisfied that your client has paid tax in excess of the amount with which it was properly chargeable for the year of assessment 1993/94. Specifically, he is of the view that the omission of the word 'Ltd.' from the name of Lam Soon Trademark Ltd. is an error of form and that by virtue of section 63 of the Ordinance such error would not have affected the validity of the notice of assessment dated 13 March 1995 for the year of assessment 1993/94. Accordingly there is no excess tax paid by your client to be refunded under section 79 of the Ordinance." [my emphasis]

16. The section of the Ordinance upon which the Commissioner relied, s. 63, reads :

" No notice, assessment, certificate, or other proceeding purporting to be in accordance with the provisions of this Ordinance shall be quashed, or deemed to be void or voidable, for want of form, or be affected by reason of a mistake, defect, or omission therein, if the same is in substance and effect in conformity with or according to the intent and meaning of this Ordinance, and if the person assessed or intended to be assessed or affected thereby is designated therein according to common intent and understanding."

17. It is the decision of the Commissioner contained in the letter of 31 January which is challenged by the applicant.

The grounds of challenge

18. Fundamental to the applicant's challenge is the contention that the omission of the word 'Limited' from the name of Lam Soon Trademark Limited, the non-resident chargeable to tax, was not, as the Commissioner would have it, an 'error of form' but was an error which went to the validity of the notice of assessment and, as such, could not be cured by the provisions of s. 63. It is the applicant's case that omission of the word 'Limited' meant that the notice of assessment was addressed to and demanded payment of tax from a non-existent entity. As such, the notice meant nothing. It was void ab initio.

19. The applicant further submits that, if the notice of assessment was of no validity, it follows that no tax was payable pursuant to that assessment. Accordingly, any tax that was paid was in excess of the amount properly chargeable. On this basis, the applicant contends that it was entitled to make an application under s. 79 of the Ordinance for a refund of all tax paid under the invalid notice. This is despite the fact that its other rights under the Ordinance to lodge objections or appeal had been barred by effluxion of time. In so far as it is relevant, s. 79 of the Ordinance reads :

" (1) If it is proved to the satisfaction of the Commissioner by claim duly made in writing within 6 years of the end of a year of assessment or within 6 months after the date on which the relevant notice of assessment was served, whichever is the later, that any person has paid tax in excess of the amount with which he was properly chargeable for the year, such person shall be entitled to have refunded the amount so paid in excess:

Provided that nothing in this section shall operate to extend or reduce any time limit for objection, appeal or repayment specified in any other section or to validate any objection or appeal which is otherwise invalid, or to authorize the revision of any assessment or other matter which has become final and conclusive."

20. It is the applicant's case that the decision of the Commissioner to reject its application made under s. 79 was not simply wrong on the merits (not a matter for judicial review) but was wrong in law and therefore, in public law terms, a decision subject to review.

21. Accordingly, although such relief has not been specifically claimed, it is clear that, in substance, the applicant seeks, first, an order of certiorari to quash the Commissioner's decision of 31 January 2001 and consequent upon that, the relief which it has claimed, namely :

"A declaration that the notice of assessment for profits tax for the year of assessment 1993/94 and demand for provisional profits tax for the year of assessment 1994/95 issued on 13th March 1995 and addressed to 'Hong Kong Flour Mills Ltd for Lam Soon Trademark' was invalid."

and :

"An order of mandamus requiring the Commissioner of Inland Revenue to refund the profits tax for 1993/94 and provisional profits tax for 1994/95 in the total sum of HK$2,884,041 charged under the aforesaid notice of assessment and demand for provisional profits tax to the Applicant."

Omission of the word 'Limited' : error of form or substance?

22. As an underlying principle, taxing statutes are to be interpreted strictly. This does not mean that they are to be interpreted restrictively against the tax collector. It means only that in a taxing statute clear words are necessary to bring a person into the ambit of liability. It has been said that there is no equity in taxing statutes. They are essentially penal in nature. Often quoted as a summary of this principle are the words of Cairns LC in Partington v. Attorney General (1869) LR 4 HL 100 (at 122) :

"If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be. In other words, if there be admissible, in any statute, what is called an equitable construction, certainly such a construction is not admissible in a taxing statute, where you can simply adhere to the words of the statute." [my emphasis]

23. As to the letter of the Ordinance itself, in respect of notices of assessment, s. 62(1) provides that, having calculated the tax due :

"The Commissioner shall give a notice of assessment to each person who has been assessed stating the amount assessed, the amount of tax charged, and such due date for payment thereof as may be fixed by the Commissioner." [my emphasis]

24. Section 63H(7) makes the same provision in respect of provisional tax :

" When an assessor has assessed or estimated the amount of provisional profits tax which a person is liable to pay, the Commissioner shall give a notice to that person stating the amount of provisional profits tax to be paid, and such due date for payment thereof as may be fixed by the Commissioner." [my emphasis]

25. Once a notice of assessment is received, s. 71(1) provides that the tax assessed :

".... shall be paid in the manner directed in the notice of assessment on or before a date specified in such notice. Any tax not so paid shall be deemed to be in default, and the person by whom such tax is payable, or where any tax is payable by more than one person or by a partnership then each of such persons or each partner in the partnership, shall be deemed to be a defaulter for the purposes of this Ordinance." [my emphasis]

26. As to the recovery of tax not paid, s. 75 provides that :

" (2) Whenever any person makes default in payment of tax the Commissioner may recover the same by action in the District Court notwithstanding that the amount is in excess of the sum mentioned in section 33 of the District Court Ordinance (Cap. 336).

(3) In proceedings under this section for the recovery of tax the production of a certificate signed by the Commissioner stating the name and last known postal address of the defaulter and particulars of the tax due by him shall be sufficient evidence of the amount so due and sufficient authority for a District Court to give judgment for the said amount." [my emphasis]

27. It is clear that the statutory scheme for the charging and collection of tax requires that the Commissioner designates in clear terms the person chargeable to tax. The scheme would otherwise be unworkable. But must that designation, in each and every instance, be stated with exact accuracy? In my judgment, there is nothing in the Ordinance, even on the strictest reading, to suggest such an absolute test. If an absolute test of this kind was imposed then, for example, if Lam Soon Trademark Limited had been described in the notice of assessment as Lam Soon Trademarks Limited, the accidental change of the word 'Trademark' from the singular to the plural would render the notice invalid. Such an error patently, in my view, would be one of form. It would not be an error of such substance that, as Cairns LC put it, it would remove the intended taxpayer from 'the letter of the law'.

28. If there can be no absolute test then the nature and extent of the error must be considered to determine whether, within the context of the statute, the error is one of form, and therefore saved by the provisions of s. 63, or whether the error so offends the integrity of the notice, assessment or other proceeding that it renders it not merely defective but invalid; that is, void ab initio : a nullity.

29. Craven v. White (C.A.) [1987] WLR 660 is, in my opinion, a case which states the principle that there is no absolute test; what must be considered are the circumstances of the error viewed in the context of the wording of the statute. The issue was whether a notice of assessment stating the incorrect year within which the tax was assessed remained valid despite the defect or whether the error rendered it invalid so that it could give rise to no legal liability on the part of the taxpayer. The tax in issue was capital gains tax. The headnote reads (in part) :

".... that in relation to capital gains tax the year of assessment was of critical importance and the revenue when issuing an assessment had to get the fiscal year to which it related correct and neither section 114(1) nor any other provision of the Act of 1970 enabled an assessment specified to be for one year to take effect as an assessment for another; it followed that the assessment raised on the trustees was to be treated as a valid assessment for 1974-75 and not for 1975-76 and accordingly did not give rise to any liability to charge against them ...."

30. In his judgment, Slade LJ considered the various sections of the relevant statute and, as the headnote records, came to the view that the year of assessment is of 'critical importance' in relation to capital gains tax. He said :

".... All these matters illustrate that the year of assessment is an essential element of the assessment itself. .... Section 114 apart, I find it is impossible to say that an assessment for one specified fiscal year can ever be or take effect as an assessment for another fiscal year. Section 114 apart, the fact that the taxpayer may have appreciated that a mistake has been made on receiving the notice of assessment is, to my mind, irrelevant in this context."

He then turned his attention to s. 114 of the Taxes Management Act 1970, which is equivalent to s. 63 (supra) of the Ordinance, s. 114 reading :

"(1) An assessment, warrant or other proceeding which purports to be made in pursuance of any provision of the Taxes Acts shall not be quashed, or deemed to be void or voidable, for want of form, or be affected by reason of a mistake, defect or omission therein, if the same is in substance and effect in conformity with or according to the intent and meaning of the Taxes Acts, and if the person or property charged or intended to be charged or affected thereby is designated therein according to common intent and understanding. (2) An assessment shall not be impeached or affected-(a) by reason of a mistake therein as to-(i) the name or surname of a person liable, or (ii) the description of any profits or property, or (iii) the amount of the tax charged, or (b) by reason of any variance between the notice and the assessment."

Slade LJ continued :

".... The judge took the view that section 114 will enable an assessment expressed to be for one year to be treated and take effect as an assessment for another year provided that the Crown can show that there was a genuine mistake and that in all the circumstances there was no real possibility that the taxpayer was in any way misled. While I again have some sympathy with this view, .... I do not find myself able to concur in it, since I do not think it is warranted by the wording of the section. Subsection (2) has no application to the facts of this case. The only words of subsection (1) which can possibly be relied on by the Crown are the following:

'An assessment .... which purports to be made in pursuance of any provision of the Taxes Acts shall not .... be affected by reason of a mistake .... if the same is in substance and effect in conformity with or according to the intent and meaning of the Taxes Acts ....'

The assessment in the present case, which the Crown asserts 'is not to be affected,' is an assessment for 1974-75. Mr. Flesch accepted and contended that, as an assessment for that fiscal year, it would not be affected by reason of a mistake if the other conditions specified in section 114(1) were satisfied. However, as he pointed out, the subsection does not provide for rectification of an assessment; it is not the equivalent of the 'slip rule.' The relevant fiscal year of assessment is an integral, fundamental part of the assessment itself. I, for my part, find it impossible to read the wording of section 114(1), wide though it is, as justifying in any circumstances the treatment of an assessment made for one fiscal year as an assessment made for another fiscal year. ...." [my emphasis]

31. More generally (and obiter), in respect of the curative powers of s. 114, Slade LJ said :

".... As I am sure the judge appreciated, section 114, where it applies, does not strictly confer a 'dispensing power.' .... If, contrary to my view, this statutory right has any relevance in relation to an assessment which has been made for the wrong year, I think it unlikely that the legislature would have intended that it would be exercisable where the error was a gross one-as in the present case I think it must have been. ...." [my emphasis]

32. It has been recognized in this jurisdiction too that s. 63 of the Ordinance (like s. 114 of the Taxes Management Act 1970) does not provide what Megarry J (in Fleming v. London Produce Co. Ltd [1968] 1 WLR 1013) described as 'an impervious coverlet for gross errors'. In Commissioner of Inland Revenue v. Chan Tin Chu HKTC 284, a 1965 judgment of the District Court, the defendant objected to payment of tax charged under a notice of assessment on the basis that, contrary to a statutory requirement of special authorization, the assessment had been issued in the name of an officer who was not authorized. It was argued that s. 63 of the Ordinance saved the assessment. Pickering DJ, however, rejected that submission :

" Mr. Hobson, for the defendant, urged that the making of an assessment by a person not within the class of persons empowered by the legislature to make it, went to substance and not to form and this appears to me to be the correct view. Assessments to tax are serious matters. They affect vitally every person assessed and the legislature has very properly circumscribed the class of persons who may make assessments. Once we step outside that class where is the line to be drawn? If it be said that an assistant commissioner not generally or specifically authorised to do so can make a valid assessment, then why not the next senior grade of official? And if this official why not a senior clerk? And if a senior clerk why not a junior clerk? The questions could be pushed to absurdity but nobody would suggest that an assessment made mischievously by the office boy or maliciously by a stranger gaining access to the offices of the Commissioner and to blank forms of assessment could be saved as to its validity by Section 63. I am satisfied that once the line drawn by the legislature in this respect is overstepped, we are dealing with a matter of substance and not of form and in my view Section 63 of the principal Ordinance cannot avail the plaintiff."

33. Pickering DJ's judgment was taken on appeal but his findings in this regard were not contested.

34. Slade LJ, in Craven v. White (supra), was of the view that the year of assessment was of 'critical importance' in relation to the charging of capital gains tax and that the citation of an entirely wrong year therefore invalidated the assessment. Pickering DJ, in Commissioner of Inland Revenue v. Chan Tin Chu (supra) was of the view that the legislature had properly circumscribed persons authorized to charge tax and that public policy demanded that tax charged by an unauthorized person should be of no effect. In neither case was there an absolute test defined. In each case, the nature and extent of the error had to be considered to determine whether it went to substance or was merely an error that went to form. In determining that issue, authorities suggest that one issue that may be considered is the likelihood of confusion arising from the error; another issue - sensibly, in my view - may be whether the error can be described as gross.

35. I accept that if an error goes to substance, a payment by the person chargeable to tax does not make valid the invalid. Nevertheless, in deciding the issue of validity, in my view, it is entirely legitimate to look to the error in context and to determine the likelihood of that error being misleading.

36. With the nature of the test being stated, I turn now to a consideration of the error which is the subject of the applicant's challenge, namely, the omission of the word 'Limited' from the name of Lam Soon Trademark Limited.

37. The inclusion of the word 'Limited' in the name of a company incorporated in Hong Kong with limited liability is invariably a requirement of law. Section 5(1) of the Companies Ordinance, Cap. 32, requires that the memorandum of every company limited by shares or by guarantee must state the name of the company and, if the name is in English, have 'Limited' as the last word of the name. If the name is in Chinese, then characters to the same effect must appear. Similar provisions apply to companies incorporated in the Cook Islands. A digest of the law relevant to companies registered in the Cook Islands - Lam Soon Trademark Limited being one - states that s. 22 of that jurisdiction's International Companies Act provides that :

"....shall have as part of and at the end of its name one of the following words or abbreviations: Corporation, Corp, Incorporation, Inc, Limited, Ltd, Berhad, Bhd, Public Limited Company, PLC, Societe Anonyme, Sociedad Anomina, SA, Naamloze Vennootschap, NV, Besloten Vennootschap, BV, Aktiengesellschaft or AG. In addition, the Registrar may approve some other word or abbreviation connoting corporate existence in lieu of the specified words and abbreviations."

38. The Companies Ordinance directs that companies must publish their names to those with whom they deal; effectively indeed to the world at large. By way of illustration, s. 93 provides that :

"(1) Every company-

....

(c) shall have its name mentioned in legible characters in all business letters of the company and in all notices and other official publications of the company, and in all contracts, deeds, bills of exchange, promissory notices, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and in all consignment notes, invoices, receipts and letters of credit of the company;

(d) shall mention in legible characters in all documents in which the company is required under paragraph (c) to have its name mentioned-

(i) in the case of a limited company exempt from obligation to use the word 'Limited' as part of its name, the fact that it is incorporated with limited liability;

(ii) in the case of an unlimited company, the fact that it is incorporated without limited liability."

39. On behalf of the applicant, Mr Ho has submitted that these provisions make it plain that the appendage 'Limited' defines Lam Soon Trademark Limited as a limited liability company and therefore goes to the root of its commercial nature. It distinguishes it from a private individual or association of individuals. I do not contest these submissions. The Ordinance demands the inclusion of the word 'Limited' so that all those dealing with a company registered under the statute should be aware of the fact that, in law, its liability is limited. It is to that extent a warning sign. But strip away the sign and, in my view, the entity still remains; it does not cease to exist.

40. Mr Ho has argued that, by leaving off the word 'Limited' - even if tax was assessed at the corporate rate - the Commissioner did not merely incorrectly describe an otherwise clearly identifiable person, a person, despite the omission, designated according to common intent and understanding, but charged tax to a non-existent entity. I do not agree. In my judgment, quite plainly, having assessed tax at the corporate rate, the Commissioner did no more than make an error in stating the name of the person chargeable to tax with full precision. It did not charge tax to a non-existent entity, it charged tax to a known entity and did so in clear terms, that I am satisfied - to the knowledge of all involved at the time - identified a corporation with limited liability called Lam Soon Trademark Limited. Yes, the citation of the name was defective, it was not fully precise. But no argument has been placed before me to suggest that there were (no matter how remote) any grounds for confusion.

41. As I understand it, Mr Ho's submissions have been predicated on the basis that, as a general rule - indeed, as an absolute rule - if the Commissioner, in charging tax to a company with limited liability, omits in error the word 'Limited' from the title of that company, then the notice, assessment or proceeding is, in every instance, vitiated and that this applies even when, to all reasonable on-lookers, there cannot be the slightest possibility of deception or confusion. In my view, in light of the saving provisions of s. 63, merely to state the proposition refutes it.

42. If there had been a more fundamental error in the citation of the name, that may have been judged as being of such substance as to render the notice of assessment invalid. As Megarry J noted (at page 598) in Fleming v. London Produce Co. Ltd (supra), when considering an error in a notice of assessment describing the person chargeable to tax as an agent rather than a principal, any such error in description must be considered in context :

".... One may ask whether an assessment of ?80,000 on L.P. as agents for Kaiapoi is so gross and misleading an error as to be incapable of cure under s. 514 merely because the income assessable is described as 'Agents'. In my judgment, one has only to ask the question for it an answer itself. The Commissioners rightly gave short shrift to L.P.'s contention on this point ...."

43. It is, of course, a requirement of law that the word 'Limited' be included in the name of a limited liability company. But it does not follow from that, in my judgment, that the word is so integral, so essential to the identification of a limited liability company that its omission from the name will mean that a non-existent entity is now referred to. Indeed, in exceptional cases, the Registrar is given the power to exempt companies from use of the word 'Limited' in their names. In this regard, s. 21 of the Companies Ordinance states :

" (1) Where it is proved to the satisfaction of the Registrar that an association about to be formed as a limited company is to be formed for promoting commerce, art, science, religion, charity or any other useful object, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Registrar may by licence direct that the association may be registered as a company with limited liability, without the addition of-

(a) if the name of the association is in English, the word 'Limited' to its name .....

....

(4) A body to which a licence is granted under this section shall be exempted from the provisions of this Ordinance relating to the use of the word 'Limited' .... as any part of its name, the publishing of its name and the sending of lists of members to the Registrar."

The digest of Cook Islands law to which I have referred (International Offshore Financial Centres by Horwarth International) is silent on the matter of such exemptions.

44. What has been argued on behalf of the applicant is that the omission of the word 'Limited' is so fundamental that it will mean, in each and every instance, that an entity is named which has no legal existence. But there are a number of authorities against that proposition. They are not authorities which concern taxing statutes but I believe that they clearly state the principle and I can find no reason why the principle should not apply in taxing cases, provided it is not deflected by the wording of the individual statutory instrument.

45. In Whittam v. W.J. Daniel & Co. Ltd [1962] 1 QB 271, a case in which the plaintiff issued a writ claiming damages against 'W.J. Daniels & Co. (a firm)', Donovan LJ, in the Court of Appeal, said (at 282) :

".... the mere omission of the word 'Limited' is not fatal, in the sense that no person is described at all. I think one can have a case where the misdescription of a defendant corporation, whether it be by the omission of the word 'Limited' or by calling it a firm or by a combination of both, as it happened here, can be a mere misnomer. .... Each case depends upon its own facts. In this case I think there is a mere misnomer; and I do not know of any rule of law which compels us to hold that the mere omission of the word 'Limited' means that no person is sued at all, and that until that is corrected there is no defendant to the proceedings. ...."

Danckwerts LJ concurred, saying :

".... [The] argument is that it is a description which describes nothing and therefore is an action against nobody, and therefore it would be improper and against the rules to put in the defendant company in place of a person which did not exist. But I cannot accept that argument. It seems to me that this is a case in which the description could only refer to the defendant company and would not be taken by any reasonable person to refer to anybody but the defendant company. In the words which were approved by Cohen L.J. in Alexander Mountain & Co. (suing as a firm) v. Rumere Ltd. [1961] 1 WLR 170 there is no magic in the name of a corporation. ...."

46. In the later case of F. Goldsmith (Sicklesmere) Ltd v. Baxter [1970] 1 Ch. 85, Stamp J (at 92) said :

".... Unlike a natural person, who can be recognised and identified by physical characteristics, a limited company, it is submitted, can only be recognised and identified by its registered name, and unless you find the correct registered name of a company in a document purporting to be a contract, or at least a name so nearly correct that you can see merely by looking at it that the correct name of a particular company is intended, there is no contract.

....

In the absence of authority constraining me to do so-and none has been cited-I would find it impossible to hold that a company incorporated under the Companies Acts has no identity but by reference to its correct name .... A limited company has, in my judgment, characteristics other than its name by reference to which it can be identified: for example, a particular business, a particular place or places where it carries on business, particular shareholders and particular directors. If there are two limited companies having the same characteristics, then it is hardly to be supposed that each of them was incorporated on the same day, and owns the same property. ...."

47. In the field of criminal law, in R. v. Yeung Lee Transportation & Engineering Limited [1995] HKCLR 144, Keith J (as he then was) followed the same line of reasoning. In this case, the company against whom an information had been laid was originally cited as Yeung Lee Transportation Company Limited, the word 'Company' being incorrectly inserted into the name. It was argued that the information named an entity which had no legal existence and was therefore invalid and was incapable of amendment. The argument was rejected; Keith J saying :

"..... The basis for [the] assertion that this information was so defective that an amendment could not cure it was that the information named an entity which had no legal existence. There was no legal entity which had the name of the original Defendant.

In my view, the fact that the information named an entity which had no legal existence did not make the information so defective that an amendment could not cure it. .... The name of the registered owner of the vehicle was simply misstated on the information. That is what the magistrate himself found. I simply do not see how a mistake in the name of the company which it was proposed to lay the information against can be described as a defect which is incapable of being cured by amendment, simply because the mistake meant that the name of the Defendant appearing on the information was the name of a company which did not exist."

Conclusion

48. For the reasons given in the body of this judgment, I am unable to find that the omission of the word 'Limited' was, in the context of the Commissioner's assessment, a gross or misleading error. Nor was evidence put before me of any likelihood of the applicant being misled. The name 'Lam Soon Trademark' was not, for example, cited as 'Lam Soon Trading', on its face an entirely different entity. Apart from the omission of 'Limited', the name was otherwise correctly stated. The applicant at all material times knew that it was making payment in respect of a limited company. Indeed, it described Lam Soon Trademark Limited as such in its returns to the Commissioner. In all the circumstances, I am satisfied that the omission of the word 'Limited' was an error of form only and therefore covered by the broad wording of s. 63 of the Ordinance. Read in context, I cannot see how it can be interpreted otherwise.

49. That being the case, I see no need to go into the other wide-ranging matters canvassed by counsel, matters going to appeal and objection procedures within the broader constitution of the Ordinance and to the appropriateness in this case of judicial review. The matter, I am satisfied, can be dealt with by going directly to the heart of the issue.

50. The decision of the Commissioner dated 31 January 2001 was not, in my judgment, wrong in law nor can it be said to be 'unreasonable' as that term is understood in matters of administrative law.

51. The application for judicial review is dismissed. There will be an order nisi awarding costs to the respondent, that order to be made final within 30 days of the date of handing down this judgment unless an application to set the matter down for argument is made within that time.