KIN SHING CONSTRUCTION CO LTD v. CONSTRUCTION INDUSTRY COUNCIL

DCMP 962/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 962 OF 2008

Industrial Training (Construction Industry) Appeal No. 962 of 2008

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Decision

1.  This is the an appeal against the decision notified to the Appellant by the Respondent under the Respondent’s letter ref.: (26) in A/ACCT/LY (1) dated 14 March 2008 in respect of the assessment of a levy under the Industrial Training (Construction Industry) Ordinance (“the Ordinance”), for the contract (“the Contract”) under reference no. DC/95/08 entered into between the Appellant and the Drainage Services Department of the HKSAR in September, 1998.

2.   The Respondent assessed the amount of levy payable under the Contract in the sum of $445,316 by referring to the aggregate value of all the works orders issued under the Contract, and the Appellant paid the sum of $445,316.  The Appellant opined that the levy ought to be assessed on the basis of the value of each individual works order.  No levy should be imposed on those work orders the value of which were below $1,000,000 in accordance with the Resolution of the Legislative Council, Cap. 317A, which stipulated that “any construction works the value of which does not exceed $1,000,000 be not liable to the levy.”  According to this assessment method the levy payable by the Appellant is $117,199.24.  Hence the Respondent overcharged the levy payable by the Appellant by $328,116.76 ($445,316 - $117,199.24).

3.  The Appellant received the Respondent’s assessment of levy in the sum of $445,316 on 18 June 2004.  The Appellant disagreed to the assessment and served a notice of objection on 15 October 2004 on the Respondent.  On 3 December 2004, the Respondent received a letter from the Respondent in reply to this objection.  The reply contained therein was rendered by the “Accounting Manager”, and not the “appropriate committee of the Authority”.  The Appellant opined that this reply letter did not constitute a proper reply according to section 29(4) of the Ordinance.  Therefore it issued another notice of objection to the Respondent on 31 December 2007 (“2^nd Notice of Objection”).  Subsequently it received a letter dated 14 March 2008 from the Respondent in reply to the 2^nd Notice of Objection.  The reply contained in this letter was again rendered by the “Accounting Manager”, and not the “appropriate committee of the Authority”.

4.  This issue I have to decide is whether this Court has the jurisdiction to deal with this appeal.  Sections 29 and 30 of the Ordinances provide:-

“29. (1) Any person who is notified under section 26(8) of an assessment of levy, or imposition of surcharge may, by notice in writing served on the Authority within 21 days after the receipt of the notice, object to the levy or surcharge.

(2)     …….

(3)     An objection under subsection (1) shall be considered by the appropriate committee of the Authority which may confirm, cancel or reduce the levy or surcharge.

(4)     The Authority shall notify the objector of the decision of the committee under subsection (3) within 28 days after the receipt by the Authority of the notice of objection under subsection (1). … … … … …

30. (1) An objector who is aggrieved with a decision notified to him under section 29(4) may appeal to the District Court against that decision.”

(Underlines provided)

5.  On this jurisdictional issue, the Appellant submits:-

‘31. The Respondent now seeks to argue that the decision contained in the Respondent’s letter dated 14 March 2008 was not a decision of the “appropriate committee” of the CITA and therefore there was no decision to appeal against pursuant to Section 30 of the repealed Ordinance.

32.  Such argument, it is submitted, is misconceived.  The Appellant had a statutory right to object to the decision of the CITA.  The CITA should have referred the 2004 Notice of Objection before the Committee on Levy, who may confirm, cancel or reduce the levy. ……………..  But the right has been taken away by the CITA when its Accounting Manager decided to confirm his own decision on the Levy without referring it to the Committee on Levy.

34.  As an objector to the assessment of Levy, the Appellant is entitled to have its objection considered by the “appropriate Committee” who may confirm, cancel or reduce the Levy: Section 29(3).  The “appropriate committee” is one of the committees set up by the CITA: Section 11(2).  An objector who is aggrieved with such decision may take up the matter up with this Court by way of appeal: Section 30(1).  On hearing the appeal, this Court may confirm, cancel or reduce the Levy: Section 30(4)(a).  Placed in context, the decision to be appealed against is, ultimately, a decision of the CIC.’

                        (Underlines added)

6.  The appellant submits that the decision to be appealed against is a decision of the Construction Industry Council  (which took the place of the Construction Industry Training Authority (“the Authority”) in the exercise of the statutory function of imposing levies on construct work).  But such a decision is not a decision included in the stautory framework of sections 29 and 30 of the Ordinance.  It is not a decision made by the appropriate committee of the Authority under section 29(3) and notified to the Appellant under section 29(4).  Under section 30(1) the Appellant can only appeal against a decision notified to him under section 29(4).  The decision embodied in the Respondent’s letter dated 14 March 2008 is a decision of the Authority; it is not a decision made by the appropriate Committee of the Authority as required under section 29(4).  This Court only has the power to hear appeal from a decision notified to the Appellant under section 29(4).  Since the appeal is on a decision not made in accordance with section 29(4), this Court has no power to hear it.  I therefore dismiss the appeal.

Costs

7.  I make an order nisi for costs, to be made absolute in 14 days’ time, that the Appellant do pay costs of this application to the Respondent, to be taxed, if not agreed, with certificate for Counsel.